Federal govt announces water trading plan

The Parliamentary Secretary for the Environment, Simon Birmingham, this week announced the first ever trading of Commonwealth water holdings.

The Commonwealth Environmental Water Holder (CEWH) has released the Water Trading Framework which, according to Senator Birmingham, “outlines the requirements and standards for Commonwealth activity in the water market, allowing our water portfolio to be used more effectively by better enabling the targeting of environmental priority areas from year to year”.

He says the Coalition expects water trading to “boost both environmental outcomes and agricultural production”. In particular, he said it will “open up a range of possibilities to invest the proceeds in strategic annual purchases that enhance delivery of the Murray-Darling Basin Plan”.

“The timing of the first trade to be undertaken means there will also be significant benefit to agricultural production in the region. This will be good news for irrigators who will be keen to secure more water during this period of hot and dry weather.”

Senator Birmingham noted that the Water Act 2007 has always allowed for trading to occur but does not provide any conditions as to how that trade occurs. “Developed in consultation with stakeholders and industry, the Trading Framework closes that gap by providing protections to other market participants, measures to minimise impacts on the water market and steps to address any potential CEWH access to market-sensitive information.”

But the plan has been criticised by Greens spokesperson Senator Lee Rhiannon. She claims the sale of millions of litres of Murray-Darling Basin water puts the future of river communities and farmers, their economic viability and the environmental health of the region at risk, all for the benefit of “a few irrigators”.

“When you start the sell-offs … you’re winding back the small achievements that have been made in terms of restoring health to the Murray-Darling Basin. Regardless of where you take the water from, removing it from the system will be particularly detrimental to South Australia.”

Senator Rhiannon noted, “Mr Barnaby Joyce in the election campaign committed the government to capping water buybacks at 1500 GL when the science is saying we need 4000 GL back into the system … Buying back water has been an effective way to recover water for the environment.”

Senator Birmingham has said that the framework has “an in-built review mechanism that is triggered three years from the first CEWH trade to ensure it is functioning as intended, achieving enhanced environmental, social and economic outcomes”.