Commonwealth to spend $205 million on first water buybacks in Murray-Darling Basin under Albanese government

Tanya Plibersek has led the Commonwealth to buy $205 million of water entitlement from the Murray-Darling Basin. (ABC News: Nick Haggarty.)

Australia’s Water Minister Tanya Plibersek has completed the first Commonwealth water buybacks in the Murray-Darling Basin since 2020.

The buybacks mean more than 26 gigalitres of water that typically would be used for farming will now stay in the rivers and be used to boost the environment at an estimated cost of $205 million.

It is not clear how many farmers, or water licence holders, have successfully sold water to the Commonwealth or at what price.

The cost of each buyback is likely to vary according to several factors including the water reliability and location.

The buybacks were agreed to via a tender, opened last March, to recover 43 gigalitres of water from Queensland and New South Wales, toward what is known as the Bridging the Gap target.

Ms Plibersek said the “contractual processes are still underway” and the government would continue to work with the Queensland and New South Wales governments to find the remaining 18.05 gigalitres to meet that target.

The buybacks are voluntary and represent a one-time payment by the Commonwealth to access 26.25 gigalitres of water each year, which the government says is the equivalent of 10,500 Olympic-size swimming pools each year.

In a statement, Ms Plibersek said the tender result showed an “appetite from local communities to participate in voluntary water purchase, especially in the southern Murray-Darling Basin, where the bulk of remaining water recovery is needed”.

“In fact, in some areas more than double the offers were received than what was required,” she said.

“Through these willing sellers, we will return water that is desperately needed to restore our rivers and support the plants, animals and communities that rely on it.”

Over the past decade, more than 2,100 gigalitres of water each year throughout the basin, has been committed to the environment, most of it from farming.

Much more water has been promised to the environment and farm groups and regional councils fear widespread buybacks could leave communities and agricultural industries worse off.

Under legislation that was updated late last year, another 450 gigalitres of water must be found for the environment by 2027.

The same legislation extended the 2024 deadline for state-managed water-saving projects that are to recover 605 gigalitres for the environment by two years.

These projects are currently falling short by more than 300 gigalitres.

In her statement on Thursday, Ms Plibersek reiterated that buybacks are just “one tool in the box to recover water”.

Coalition seeking answers

Government officials are expected to face questions about water recovery across the basin when Senate estimates resume in Canberra on Friday.

The opposition, which opposed the legislation last year, has been seeking details about the cost of water buybacks to the Commonwealth.

A statutory review in 2022 reported that it could cost more than $10 billion to purchase the 450 gigalitres of water promised for the environment, assuming the original 2024 deadline was removed.

That same year, a secret sum was set aside in the federal budget for water recovery with the government arguing it did not want to jeopardise potential buybacks by declaring how much money it had allocated.

Since it was initially legislated in 2012, $13 billion has been committed to the Murray-Darling Basin Plan, which sets out how water in Australia’s largest river network is shared.