Allocations

The amount of water in an allocation changes depending on how much water is available.

The difference between an entitlement and an allocation

Water entitlements or licenses represent the right of the holder to take up to a certain amount of water from the river system. Ownership of these rights can be permanent, or temporary via trading.

Water allocations are announced by the relevant state government and are the percentage of water that can be taken within that given water year for an entitlement.

Climatic conditions can also have an impact on the amount of an entitlement that is taken for use. In a wet year, crops are watered directly through rainfall, meaning less water is used for irrigation. In a dry year, there is less rainfall, meaning water from the river may need to be used to grow crops.

The amount of water allocated is reliant on a range of factors including:

• the amount of water held in storages
• the condition of the catchment and river system river (wet or dry)
• forecast inflows for the river system

ensuring sufficient water is kept in reserve to supply Critical Human Water Needs such as town water supplies

• the estimated volume required to run the river and provide for end of system flows,
• where relevant the amount of water that was able to be carried over by entitlement holders from the previous water year.
• the category of the licence (i.e. High, Medium, Low).

Water can be used, stored, traded or reallocated

When water is allocated to irrigators by their state authority, it is up to individuals to determine how they use their water, based on their own business needs. Irrigators can choose to:

• use their allocation on their farm
• trade all or some of their allocation to another water user
• buy an allocation off another water user and use that water for their farm to supplement their allocation
• save water for the next irrigation year – this is called carryover (some licence types limit whether water can be carried over)
• leave their water un-used, which means it stays in the dam and returns to the state’s pool for re-allocation.

When individual allocations are not enough to meet crop or environmental watering needs, entitlement holders can purchase additional allocations to make up part of all of the shortfall.

Carrying water over

Not all water allocated to an irrigator is used. Some water is saved by individuals for the next water season – this means they have water in reserve.

Carrying water over is based on individual business needs and license types. Not all licences allow for water to be carried over.

This water is considered ‘un-used’, but that doesn’t mean it is available for re-allocation. It is still owned by the irrigator.

Underuse

Depending on individuals’ water use choices, in some irrigation years not all of the water allocated by State authorities under a water entitlement is used. This means that, in some areas, less water is used than the Sustainable Diversion Limits (SDLs) allow.

SDLs are how much water can be used on average for different areas of the Basin over the long-term to ensure water use stays within environmentally sustainable levels. In any one year, depending on climatic conditions and user choices, water use may be lower or higher than the SDL. Overuse occurs when more water than the SDLs allow is used. Conversely, underuse occurs when less water than the SDLs allow is used.

There is no ‘spare’ water – the Murray-Darling Basin system is operated efficiently. Any water that isn’t used is carried over or reallocated for use in the next irrigation year.

Water use is influenced by individual decisions on production, trading, and carryover, as well as state water policies. As a result, not all allocated water is always used.

Water entitlement holders may:

• Use the water they are entitled to
• If they don’t need it, sell it to someone who does
• or keep it for next year.

The Basin Plan sets a maximum limit, the SDL, on how much water can be used. The SDL serves as a long-term check to ensure water use stays within sustainable levels.

All Basin state governments are encouraged to allocate up to the SDL.

Water recovery

Water recovery and underuse are distinct concepts, especially in the context of managing a complex system like the Murray-Darling Basin.

Water recovery aims to improve the environment by putting a set amount of water back into the river system. This is done by securing water entitlements specifically for environmental use.

Environmental water holders use their entitlements in a way similar to how irrigators use theirs, but the focus is on benefiting the environment rather than agriculture.

Water that is stored in dams as a result of underuse cannot be used for the environment.

The water recovery target is a long-term average.

The Australian Government has committed to securing the recovery of water for the environment as part of ‘bridging the gap’ target and the 450 GL/y of additional environmental water. For more information on water recovery.

Water sharing, allocations and accounts – different systems

Bulk water sharing arrangements in the southern Basin are set by the Murray–Darling Basin Agreement. The Agreement provides the rules for sharing arrangements between New South Wales, Victoria and South Australia.

Each state has developed its own set of licences and rules around how to allocate the state’s share of water to their entitlement holders. This means allocations, water orders and delivery of water all work in a different way from state to state and will continue to do so.

Find out more about water sharing arrangements.

The sustainable diversion limit (SDL) water accounting system monitors water trends over the long term. Importantly this is not the system used for allocations, water sharing between the states, or daily river operations.

The SDL water accounting system ensures states remain on-track over the long term regarding their water use and assists water managers to consider future trends and demands. The SDL accounting system does not focus on individual water users and water deliveries.

Find out more about sustainable diversion limits.