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Murray-Darling Basin Plan – Regulation Impact Statement – Murray-Darling Basin Authority

On 22 November 2012, the Minister for Sustainability, Environment, Water, Population and Communities announced that the final Murray-Darling Basin Plan was signed into law. This decision means that each year some 2,750 gigalitres of surface water, which would otherwise be used for consumptive purposes (such as irrigation and industrial use), will be returned to the environment to help restore the health of the Basin. The Basin Plan sets a long-term average sustainable diversion limit on the total volume of surface water diverted for consumptive use of some 10,873 gigalitres each year.  The main benefits of the Basin Plan have been categorised into ‘use’ and ‘non-use’ benefits. Use benefits are estimated to approach $100 million per annum. These include benefits to tourism, floodplain agriculture and commercial fishing. Some costs will also be avoided, in relation to managing salinity, water quality and preventing erosion. Significant ‘non-use’ values also arise from a healthier Basin, but these benefits are difficult to estimate reliably. Some studies suggest that in today’s dollars these benefits could be in the order of $3 to $8 billion. The main economic costs of the Basin Plan are measured as foregone profits for agricultural industries, estimated at $160 million each year. There will also be net additional administrative costs for Basin states and the Commonwealth estimated to be in the order of $100 million each year. The Basin Plan will also have broader social and economic impacts on Basin communities; these impacts will be greater in some communities (or on families and individuals) than others. The water-sharing arrangements in the Basin Plan take effect from 2019. In the meantime, the Government has committed to recovering all of the additional water the Basin Plan provides for the environment. This water is being recovered through purchasing water entitlements and through investment in improved irrigation infrastructure. A Regulation Impact Statement was prepared by the Murray-Darling Basin Authority and was assessed as adequate by the Office of Best Practice Regulation.