Up to 10 gigalitres in annual allocations up for tender in the Gwydir valley of NSW in the first sale of licences since 2008

This article is more than 6 years old

This article is more than 6 years old

The government is to sell off water allocations to farmers who operate alongside the Murray-Darling river system for the first time since a deal that aims to end two decades of arguments on how to manage the resource.

The Commonwealth Environmental Water Holder, which manages the government’s water licences, said up to 10 gigalitres of water allocation would be available for sale in the Gwydir valley, a region of New South Wales which forms part of the Murray-Darling basin.

The government owns around 1,7000 gigalitres of water in the basin as part of a deal struck in 2012 that used public money to buy water allocations from farmers to ensure that the river system retained a healthy flow.

The Commonwealth Water Holder said it would sell a “small portion” of its annual allocations, rather than permanent water entitlements. An open tender process for the 10 gigalitres will start on Tuesday.

The government said the sale of water licences, for the first time since 2008, would help irrigators and raise funds for the purchase of future licences.

"The core test for the environmental water holder in undertaking these activities is whether it better achieves environmental outcomes, whether it aligns with the Murray-Darling basin plan, which the Coalition is committed to implementing in full and on time," Senator Simon Birmingham, parliamentary secretary for the environment, told the ABC.

"Trading will be limited and will only be a small portion of the overall entitlement held by the environmental water holder.

"But you can get these benefits because not every wetland, not every key asset would naturally receive water in every single year."

Irrigators have welcomed the move, calling it overdue and an important way to help them manage periods of hot weather without negatively impacting the environment.

But the Greens are critical of the decision, claiming that it risks the health of both the environment and the communities that rely on the Murray-Darling river system.

The Abbott government plan to support the sale of millions of litres of Murray Darling basin water put the future of river communities, their economic viability and the environmental health of the region at risk, said Senator Lee Rhiannon, the Greens water spokeswoman.

“This is a massive blow to rural Australia as a few irrigators will benefit to the detriment of river communities, the majority of farmers and the environment,” she said.

"When you start the sell-offs, particularly when it's driven by a Coalition government, 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.”

In December, conservation groups were angered by the government’s decision to remove the Murray river from a list of threatened ecological communities.

But Jonathan La Nauze, spokesman at the Australian Conservation Foundation, told Guardian Australia he wasn’t “alarmed or concerned” by the opening up of water trading.

“This is a natural maturing of the process but we do need to ensure the government provides clear information to show there will be a net environmental benefit,” he said.

“That’s important is where this water will be sold and how the proceeds will be used to create better environment outcomes.”

La Nauze said parts of the vast river system had recovered since the decade-long drought but threats to the ecosystem remained.

“At the very bottom of the system, it will take a long time to restore the damage done by the millennium drought,” he said. “We may have to intervene to restore the ecosystem even though higher flows have helped.

“River red gums have bounced back and so have some fish populations. There is evidence that the restorations of flows have helped these things, but it’s a long-term enterprise that will need continual monitoring.”

Barnaby Joyce, the agriculture minister, said the temporary trade of water was an appropriate way to aid the farming industry.

“We have a cotton crop that is a couple of waters away from delivering billions of dollars to the Australian economy," he said.

“We have plantings of grapes that need a drink or Australian farming families will lose millions in agricultural investment.

“We have the capacity to trade water to alleviate these problems and when it rains again, and it will, this water account can be replenished. In the interim, we can use the water that is available to deal with the problems of the drought that are with us right now.”