Water ministers meeting in Brisbane have agreed there are real risks in delivering water in the southern Murray-Darling Basin.
Ministers accepted an independent report, prepared by Victoria and NSW, on Murray-Darling Basin constraints modelling.
The panel, headed by former Murray Darling Basin Authority board member George Warne, called for an end to predetermined flow rates.
Panel members agreed with the Productivity Commission's Murray-Darling Basin Plan five year-assessment that meeting the 2024 deadline was highly ambitious, if not unrealistic.
Victorian Water Minister Lisa Neville said from the state's perspective there had been some "good wins" from the meeting.
"Finally, there has been an acknowledgement from the MDBA and the ministerial council that we have real deliverability issues along the southern Basin," Ms Neville said.
"Right now, Victoria has had to put in place an extraction licence limitation to manage those shortfall risks, and we now have agreement we've got deliverability issues."
There was also acknowledgment there were serious issues with Constraints Measures Projects and a plan would now be developed to provide a more realistic timeframe, appropriate milestones and greater buy-in from local communities.
NSW and Victoria had made it very clear there would be a great deal of difficulty in delivering the constraints measures strategy, involving projects, critical to delivering the Murray Darling Basin Plan.
The plan sets an ambitious target of recovering 2750 gigalitres of water recovery, although that could be bolstered to 3200GL if there are no negative socio-economic impacts.
The CMS looks at lifting flow impediments, such as increasing the outlet capacity of dams, raising man-made structures, such as roads, bridges and levies and flooding private land.
"We can't just have constraints projects that are about delivering a super highway of water," Ms Neville said.
"We need to work with communities on where we flood, where we don't flood, and take those communities with us, in developing these projects."
Ms Neville said ministers had acknowledged the independent panel's report.
"We have asked officials from each of the states to come back and reflect on how we deal with those challenges on those projects, allowing us potentially additional time to deliver those, and make sure we take those communities with us," she said.
"NSW and South Australia will look at further measures in order to ensure we can deliver, not only for the environment, but all our existing irrigators along the southern Basin," she said.
In the report, the independent panel cast doubt on attempts to go ahead with notified flows, without the co-design process necessary to win community support and the confidence of landholders.
"It is likely that this approach will fail because the necessary landholder agreements will not be achieved, and river operators will not be prepared to release overbank flows unless they are indemnified for the liability arising for inundating private land," the report said.
"Nothing will be achieved and opportunities to get better local environmental outcomes from the water that has already been recovered will be lost."
The panel found river operators could not deliver 80GL/day flows at the South Australian border.
The commonwealth was already struggling with constraints, in trying to deliver environmental water.
Ms Neville said ministers also agreed to write to the Australian Competition and Consumer Commission, asking it to look at overseas ownership of water, as part of its water market review.
"Is it appropriate in our market to have overseas companies owning our water?" Ms Neville said.
The ACCC would also be asked to look at monopoly arrangements, and whether they were distorting the market "and do we need to anything about it?".
Ministers also agreed to look at a national scheme to register water brokers, "to give surety and confidence" to irrigators.
Ms Neville said there was also agreement from NSW and SA to look at market rules, similar to what had been put in place in Victoria.
MinCo also agreed to look at permament plantings, along the Murray River.
But Ms Neville said there were issues ministers could not agree about.
She reiterated the Victorian government's opposition to a review of state water sharing arrangements, which predate the Murray Darling Basin Plan.
Ms Lisa Neville said the decision to ask interim Murray-Darling Basin Water Resources interim Inspector-General Mick Keelty was made by federal Water Resources Minister David Littleproud, after meeting with NSW irrigators, in Camberra.
"I don't think a water share review, given most of the other states won't participating. is going to be worthwhile," Ms Neville said.
"I think it creates an expectation for people, who are doing it really tough, that there is water available, and it just isn't there."
While she acknowledged the drought in NSW, she said Victoria ran its system in a different way.
"We work within the rules, and our message is, what are we trying to fix?" Ms Neville said.
"There is no misuse of water, in our system, people are not getting an unfair share of water."
She said there appeared to be a perception that "we are going to find a whole lot of water, that doesn't exist, while throwing out the rules that had served us well, in the past.
"Victoria doesn't want to be in a position where we are penalised, because we run our system in a very conservative way, so we make sure we have always got some high security allocations.
"We don't want it said we have too much water, while NSW is on zero."
Ms Neville said all states, aside from NSW, were reluctant to participate in a review of water sharing rules.
"Those rules were in place well before the MDBA came into place."
Ms Neville said the rules operated very well, to ensure each state had its fair share of water.
Victoria used the rules to ensure irrigators had their share of high reliability water, and to minimise zero allocations.
"We won't be penalised because we manage our water system well, and we won't be participating in that review by the Inspector General, nor will some of the other states," she said.
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