Coming Season Murray Allocation Risk Reduced

 15th April 2021

Today NSW Murray growers can breathe a sigh of relief that they will not have to repay the massive Barmah Millewa environmental water borrow before receiving a 2021 general security allocation. 

In all other years the NSW Government has borrowed the Barmah Millewa Environmental Water Allowance to underpin water availability in the NSW Murray up to 30% general security allocations. This ‘borrow’ is then repaid to the environment when general security allocations reach 30%. 

To date, the only exception to this rule has been the current season whereby the repayment trigger was increased to 50% as NSW Murray irrigators had faced ‘exceptional [dry] circumstances’ in the prior three years. 

However, the 15 March allocation statement provided that after four years of “low flows” the Barmah Millewa borrow would not be automatically triggered, and consequently there was a significant risk that any outstanding borrow would need to be repaid before NSW General Security allocations could accrue. 

This situation is unprecedented and came as a complete shock to both the RGA and NSW Murray growers.

The current borrow volume is 344 gigalitres, and at 15 March only 30 GL of this ‘debt’ had been repaid. Hence, there was a real risk that up to 314 gigalitres would need to be ‘repaid’ to the environment before any NSW Murray water users would receive a 2021/22 water allocation. 

In response to this, the RGA set about lobbying the NSW Government seeking that the previous repayment triggers of either 50% or 30% be reinstated. We argued that unless this occurs: 
- total rice production in the NSW Murray would be extremely limited, challenging to the ongoing viability of the industry, especially considering the industry is only just commencing recovery from two years of unprecedented low production;
- the millions of dollars’ worth of water planning and market decisions made by growers to date in preparing for the coming season will be completely undermined; 
- growers confidence in the allocation system would be further eroded; and. 
- communication of this rule was both too late and insufficient. 

Read our most recent letter to the NSW Water Minister, Minister Pavey, and CEO of NSW Water, Mr Bentley here

Fortunately, today’s allocation statement has indicated a slight improvement to circumstances. It has confirmed that the Barmah Millewa Allowance will be borrowed at 1 July to underpin NSW water availability. However, there will be an accelerated pay-back of this borrow, rather than the usual 30% payback trigger. In other words, resource improvements leading up to October will be shared between allocation to general security entitlements and payback of the Barmah Millewa Allowance.

Nevertheless, the outlook for NSW Murray General Security allocations is still dismal, with today’s allocation statement predicting a 0% general security opening allocation at 1 July (although the NSW officials state that this prediction is conservative). 

At the same time however WaterNSW is predicting 450-650 GL to flow into the Menindee Lakes over the next few months, providing a considerable boost to NSW Murray resource. In addition, the two Murrumbidgee storages are at near full capacity (in Autumn!) and hence there is a reasonable risk of spilling and flood events in the winter/spring. Hence, who knows what the future holds.