Murray-Darling Basin Plan: Five-year assessment

• The Basin Plan is a significant step change in resetting the balance between environmental and consumptive use of water and establishing a new sustainable water management system.
• The Plan is a major investment — $13 billion in total and $4.9 billion is still to be spent by 2024.
• Significant practical progress has been made.
  • Recovery of water entitlements to bridge the gap between poorly-managed historical use and the new Sustainable Diversion Limits is almost complete.
  • New management arrangements, including those for managing both environmental watering and water trading are in place and are working well.
• An immediate improvement is nevertheless required in two important elements of the Plan.
  • The development and accreditation of Water Resource Plans is behind schedule. Basin Governments should agree to extend the 2019 deadline where there is a material risk to the quality of plans.
  • Basin Governments should substantially revise the Basin Plan Evaluation Framework and develop a monitoring strategy. This will enable the impacts of the Plan to be evaluated and communicated effectively in 2020 and 2025, and the Plan to be reviewed in 2026.
• In the future, there will also be major challenges and risks to implementing the measures to adjust Sustainable Diversion Limits by 2024.
  • The agreed package of supply measures (including constraints easing projects) is ambitious. If key projects fail, environmental benefits will be delayed and the additional costs to tax-payers are potentially in the order of $480 million. Basin Governments should establish sound governance and funding arrangements and develop an integrated plan to manage delivery of the projects. The current timeframe is unrealistic and should be extended.
  • Projects to ease or remove delivery constraints and achieve enhanced environmental outcomes are unlikely to be completed by 2024. The Australian Government consequently risks bringing forward significant expenditure for an asset that cannot be effectively used for many years. It should instead align additional water recovery with progress on easing constraints and include strategies to mitigate socioeconomic impacts.
• These complex challenges are made more difficult because of the way Basin Governments have developed and agreed to the projects. The process has lacked transparency and candour with stakeholders who are concerned about potential impacts.
• There are major shortcomings in the current institutional and governance arrangements and these pose a significant risk to successful implementation. Now is the time for Basin Governments to do some heavy lifting and provide strategic direction.
  • Basin Governments should take joint responsibility for leading implementation, not leave it to the Murray-Darling Basin Authority (MDBA).
  • The Basin Officials Committee should be assigned responsibility for managing the significant risks to successful implementation, including the integrated program of projects.
• The MDBA has two main roles: supporting Basin Governments to implement the Plan; and ensuring compliance with the Plan (in its role as regulator). These roles are conflicted and the conflicts will intensify in the next five years.
  • The MDBA should be separated into two institutions — the Murray-Darling Basin Corporation and the Basin Plan Regulator.
• This is an opportunity to make important 'stitch in time' changes to ensure an effective Plan. Failure will be costly for the environment and tax-payers and undermine confidence that the significant investment in the Basin Plan has been worthwhile.

Immediate action required to keep the Murray-Darling Basin Plan on track

The Productivity Commission has today sounded a warning bell to Basin Governments, with the release of its draft report into the implementation of the Murray-Darling Basin Plan.

The Commission found that significant progress has been made with about 20% of the water that was used for agriculture now dedicated to the environment and evidence of environmental improvement. But there is still a lot of hard work ahead in key areas and success is not guaranteed.

By 2024, Governments are to deliver an ambitious suite of projects. If these succeed, they will deliver the same environmental outcomes with less water, easing the burden on farmers and Basin communities and saving taxpayers about $480 million dollars. In addition, the Plan requires that an extra 450 GL (about 20% more than water recovered to date) be acquired for the environment, so long as there are no negative socioeconomic impacts. The Commission has found that some of the timelines are unrealistic and that institutional and governance arrangements are deficient.

The Commission has proposed draft recommendations designed to give the Plan every chance of success.

"The current institutional arrangements for implementing the Plan do not give the Commission confidence that the significant risks ahead will be well managed. Basin Governments need to collectively take charge and deliver on implementation of the Plan for the benefit of the Basin as a whole, not just to their own patch. This needs to be accompanied by reform of the Murray-Darling Basin Authority to create a separate Basin Plan Regulator" Associate Commissioner for Water John Madden said.

"Now is the opportunity to make important 'stitch in time' changes to ensure delivery of an effective Plan. Without immediate action, there is a significant risk of less water for irrigation, the cost to taxpayers blowing out and, in the future, communities wondering whether it was all worthwhile." Commissioner Jane Doolan concluded.

The Commission encourages interested parties to examine the draft report and make a submission or brief comment by 10 October 2018. The draft report is available at: http://www.pc.gov.au/inquiries/current/basin-plan/draft

Basin Governments are implementing the Murray Darling Basin Plan to reset the balance between the environment and commercial use of water — an historic achievement.

We are doing an independent check, looking at how Governments are going with implementing the Plan.

Some significant progress has been made. Water has been transferred from agriculture to the environment, and some environmental improvement is evident.

But the next phase of implementing the Plan is really challenging. Planning has fallen behind and around $5 billion of tax payers money is at risk.

Over the next five years Governments have agreed to deliver complex projects that will improve the health of the environment.

These projects include:

• Managing river operations to periodically raise river levels and increase river flows so that extra water can be delivered to floodplains and wetlands.
• Striking agreements with 3000 land owners to flood parts of their properties when environmental watering is taking place.
• And infrastructure works that will deliver water to important environmental sites.

Our analysis shows the projects are ambitious and the timetable set to deliver them in is unrealistic.

There is a significant risk that some projects could fail.

For these projects to be a success, Basin Governments need to take charge. They need to change their mindset from "protecting my own patch" to "working as a team".

We’ve set out a pathway for Governments to keep the plan on track.

Failing to act will mean:

• less water for irrigation
• the cost to tax payers could blow out
• and in the future, the community might then wonder whether this has all been worthwhile.

You can read more about our proposed recommendations in our draft report on our website.

We’d like to hear your views.