Murray-Darling Basin Plan 2027 extension without Victoria & opened to environmental buybacks

The states will have until the end of 2026 to deliver their 605 gigalitres of water-saving infrastructure projects and the end of 2027 to recover 450GL of environmental water.

The extended deadlines will be paired with more funding to deliver the projects and more options to recover the environmental water, including buybacks.

Federal funding will be provided to rural communities affected by the flow-on impacts of the environmental water buybacks.

Victoria is the only basin state not to sign the agreement. Federal Water Minister Tanya Plibersek said there were significant benefits to signing and the door would remain open to the southern state.

"Reaching this agreement has not been easy," Ms Plibersek said.

"It took co-operation from basin ministers, with a shared understanding of the urgency we all face. We don't want Australians to wake up one day with a dead river system and find out their governments could've stopped it.

"Those states that have agreed will get more time to deliver the water saving projects, they'll get more money to deliver those projects and if there are social and economic impacts in their communities, those state governments will have funding to support those communities."

It's unclear why Victoria did not sign up to the new agreement and it's understood the state's water minister, Harriet Shing, has not seen its details.

Ms Shing has previously declared her government would not support buybacks.

The NSW government signed up to the agreement, despite announcing it "does not support water purchases".

"However [NSW] recognises that the obligation rests with the Commonwealth government to deliver the Basin Plan," the agreement states.

Ms Plibersek said the government would remove the 1500GL cap on buybacks, which previously restricted the how much water the federal government could purchase.

The agreement states the Commonwealth will provide funding to communities should "any negative social and economic impacts" from environmental buybacks.

"If there are any social and economic impacts, we'll work with [the states], we'll fund adjustment policies and programs in those areas that might be impacted," Ms Plibersek said.

The Albanese government will introduce legislation to amend the Water Act and enforce the changes when parliament sits next in early September.

Ms Plibersek said the legislation had "something for everyone", granting the Coalition calls Coalition to extend timelines and meeting the Greens demands to deliver the full 450GL.

Coalition water spokesperson Perin Davey "cautiously welcomed" the extended timeframes, but warned Labor to not immediately resort to buybacks. She also questioned if the new agreement was a "real Murray-Darling Basin Plan" without Victoria.

"We certainly sympathise with [Victoria's] caution in signing up," she said.

"We know from past experience there can still be losers from something sold as a win-win and the devil will be in the details."

Nationals leader David Littleproud said buying back 450GL of water would cost "tens of billions of dollars" and blasted the proposal to compensate communities impacted by the policy.

"That's a short-term fix to taking away long-term prosperity of future farmers," he said. "A sugar hit to a regional community doesn't make up for the generations of income that can be created through water."

Greens water spokeswoman Sarah Hanson-Young said the agreement did little more than "kick the can down the road yet again".

"If Minister Plibersek wants this to pass the Senate we need environmental flows guaranteed and water flowing to South Australia before the next election," she said.

"Lifting a cap on buybacks is welcome in theory, but it means little unless water is actually bought and delivered on time."

Should Victoria refuse to sign the agreement it's understood it will remain bound to the plan's original mid-2024 deadline, which triggers buybacks to recover the shortfall from incomplete water saving projects.

The state governments noted that not all water infrastructure projects would be completed by the 2026 deadline, but will continue to support the projects and their ability to contribute to water recovery, which will be considered in the Basin Plan Review.

1. The Commonwealth will use its best endeavours to amend the Commonwealth's Water Act 2007 to implement the Basin Plan in full by:

- extending time to deliver Sustainable Diversion Limit Adjustment Mechanism (SDLAM) supply and constraints projects until December 31, 2026;

- allowing for basin states to bring forward new supply projects provided they can be achieved by no later than December 31, 2026;

- a reconciliation of SDLAM project outcomes by the MDBA to be completed by December 31, 2026; and

- recovering 450GL of water for enhanced environmental outcomes.

2. The Commonwealth will extend the final deadline for SDLAM funding to basin states. In exchange, basin states will provide additional assurances and accountabilities for delivery of supply and constraints projects. The Commonwealth must be satisfied that the assurances and accountabilities provide sufficient certainty before it extends funding.

3. Basin governments note that not all constraints relaxation projects will be complete by 2026, but nevertheless support for those projects should continue. This arrangement will enable constraints projects, and their ability to contribute to water recovery, to be considered in the context of the Basin Plan Review.

4. In addition, basin states will deliver a package of 'no regrets' constraints relaxation projects that support floodplain outcomes, to be completed by December 31, 2026.

5. The Commonwealth will extend the timeline for its recovery of the 450 gigalitres of additional environmental water to December 31, 2027. This is on the basis that delivering the full 450 gigalitres is not feasible under current settings and timeframes.

6. The Commonwealth will work with communities on the design and delivery of water recovery programs towards the 450-gigalitre target with all options on the table, including water purchase.

7. The Commonwealth's approach to achieving the 450GL of additional environmental water is based on an overall assessment of value for money informed by the following principles:

- minimising the socio-economic impact on communities;

- environmental utility; and

- water market price.

8. The NSW government does not support water purchases; however it recognises that the obligation rests with the Commonwealth government to deliver the Basin Plan. Accordingly, all basin governments will work together to build public confidence in the delivery of the Basin Plan by respecting legislated obligations.

9. Should any negative social and economic impacts from delivering environmental outcomes intended under the Basin Plan be identified, the Commonwealth supports minimising these impacts on communities. This includes through:

- considering how the 450 gigalitres of additional environmental water is recovered;

- learning from the outcomes of previous water recovery and community adjustment programs; and

- in the case of water purchase towards the 450 gigalitre for the environment, providing funding for community adjustment assistance and working with Basin governments and communities in delivering this assistance.

10. Basin governments commit to ongoing sustainable diversion limit compliance and water management, through Water Resource Plans, and robust water management and compliance systems.

11. The timeframe for completion of Northern Basin Toolkit projects is extended to December 31, 2026.

12. Basin governments commit to continue strengthening arrangements to improve connectivity in the northern basin to support environmental outcomes, including protecting Commonwealth environmental water to achieve environmental outcomes throughout the basin.