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The Murray-Darling Basin Plan Is Again Under Fire. So What’s The Deal?

The plan is again facing criticism for blowing out budgets and potentially wasting millions.

What you need to know
  • Australia’s largest water management project, the Murray-Darling River Basin Plan has been called out by the Productivity Commission.
  • This week a review warned that the $13 billion project risks all-together failing due to poor governance, “unrealistic” deadlines and budget blow-outs.
  • Failing to meet timelines could have serious implications for the environment and taxpayer dollars, the review says.
  • The review recommends the basin’s authority should be split into two bodies, and a regulator set up to measure compliance.

After years of ongoing controversy, the $13 billion Murray-Darling Basin Plan is under fire for poor governance, lagging behind schedule and potentially wasting millions of taxpayer dollars.

A five-year review by the Productivity Commission, released this week, flagged concerns that budget and timeline blow-outs could jeopardise the project entirely.

Now, the review is warning that failure to take immediate action to salvage the plan could have potentially dire consequences for the environment and risk wasting $480 million.

“Failure will be costly for the environment and tax-payers and undermine confidence that the significant investment in the Basin Plan has been worthwhile,” the Productivity Commission’s draft report says.

"If key projects fail, environmental benefits will be delayed and the additional costs to tax-payers are potentially in the order of $480 million.”
The Murray-Darling Basin Plan is plagued by poor governance, “unrealistic' deadlines and budget blow-outs, a review says.

The report acknowledged significant progress has been made in recovery of 2,075 gigalitres of water from farmers and irrigators to help the struggling river, but noted the deadline for the next phase of recovery is “unrealistic.”

The review said governments need to fundamentally change the way they manage the waterways and improve transparency with key stakeholders, while the Murray-Darling Basin Authority (MDBA) should be split into two bodies.

This is not the first time the MDBA has been under attack. In June, a Royal Commission into the MDBA was told that the authority’s failure to develop an integral water resource plan could be delaying the State Government’s deadline for the plan.

So where did the controversy start?  

The MDB is the catchment of Australia’s largest river system. Stretching from South Australia and Victoria and up to NSW and Queensland, the rivers comprising the MDB cover an area the equivalent of 14 per cent of mainland Australia.

The boundaries of the Murray-Darling Basin.

But the catchment's real significance it that it accounts for 39 per cent of Australia’s gross value in agricultural production, making it a powerhouse affectionately known as ‘Australia’s food bowl’.

To ensure the long-term sustainability of the basin, in 2010 the federal government developed the MDBP. The plan outlines how much water can be taken annually from the Basin, to balance the competing priorities of ensuring sustainable management of the water with the need for secure consumptive use.

After growing concerns about declining levels of water in the basin, criticism over the plan mounted.

Eight years on, a whopping $13 billion has been spent managing the 1 million square kilometre area. But with much money also comes much unrest. Even in the early days of the plan local stakeholders flagged concerns the MDB wasn’t being properly managed, with claims the authority was putting environmental interests over economic and social ones.

After a parliamentary inquiry in October 2010 investigated the economic impacts of the plan and the balance of environmental, economic and social interests, the plan became law in May 2012.

But years later a Four Corners report on water theft in Barwon-Darling prompted the MDBA to improve its reporting and compliance.

But these changes didn't allay the unrest, with the South Australian government in January launching a royal commission into the operations of the basin and the commission in July being told the NSW government was unlikely to meet the deadline for developing its water resource plan.

Budget and deadline blow-outs 

Now, years later, the MDBP continues to be plagued by problems. The Productivity Commission's report this week was just the latest criticism.

While the plan has made progress in returning water to the basin, a number of critical water recovery projects are unlikely to meet their deadline, the review warns.

The review says that the MDBP is unlikely to meet its current deadline for the development of the Water Resource Plan, which outlines water management rules, saying it is “unrealistic” and should be extended to 2019.

The MDBA is also unlikely to implement its “ambitious” water efficiency measures by 2024 and “gives little confidence” they would be completed in time.

"The Australian Government consequently risks bringing forward significant expenditure for an asset that cannot be effectively used for many years".

The Murray-Darling in 2007, when inflow was at an all time low.

There are also major shortcomings in the current institutional and governance arrangements and these pose a significant risk to successful implementation, according to the review.

The development of projects has “lacked transparency and candour with stakeholders who are concerned about potential impacts,” it says.

The review calls on the MDBA to be split into two authorities, saying that there is an inherent conflict in the two-fold role of the MDBA in supporting the implementation of the plan and ensuring compliance.

A new Basin Plan Regulator should be established to monitor and enforce compliance and measure the performance of key stakeholders against water targets, the review says.