Buyback cap backed by budget

13 May, 2015 10:56 AM
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The River Murray.
The government may need to spend more money on water infrastructure measures
The River Murray.

THE Coalition’s commitment to capping environmental water buybacks at 1500 gigalitres in the Murray-Darling Basin Plan features in the 2015 federal budget.

The budget’s section on fiscal risks refers to the 1500GL cap, which was a key commitment of the Coalition from opposition but is yet to be legislated.

The risk statement warns the government may need to spend more money on water infrastructure measures to meet the Basin Plan’s 2750GL target for environmental water flows, rather than the revert to the cheaper but non-preferred method of water buybacks.

“The introduction of a 1500-gigalitre cap on Australian government water buybacks comes with a potential, but currently unquantifiable, fiscal risk for the government,” the budget papers said.

“If there is a substantial shortfall in sustainable diversion limit (SDL) adjustments from supply measures, then the cap on water buybacks will be reached and other potentially more expensive means of water recovery will need to be used to meet SDLs.

“It will not be possible to identify whether this risk will be realised and what the financial implications are, until the SDL adjustment mechanism operates in 2016.”

The Commonwealth government has promised to deliver the Basin Plan “in full and on time” and also introduce legislation on a 1500GL cap.

This constitutes a commitment of $4.5 billion on the Basin Plan’s implementation – or about $3m million per day to 2019 - which includes $3.856b for water savings infrastructure projects, including on-farm.

However, Parliamentary Secretary to the Environment Minister Bob Baldwin has urged the Labor government – which oversaw the Basin Plan passing into law in late 2012 – to provide bipartisan support for the cap.

FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media

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