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4613.0 - Australia's Environment: Issues and Trends, Jan 2010  
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Contents >> Water >> Water management

This document was added 02/05/2010.



WATER TRADING

VOLUMES OF WATER TRADED, 2008-09

Permanent trades
Temporary trades
Total volume traded (GL) (a)
Trades within state (GL)
Outgoing (interstate) trades (GL)
Total volume traded (GL) (a)

NSW
1 286
871
560
1 431
Vic.
252
344
30
374
Qld
75
248
0
248
SA
74
92
4
96
WA
8
9
0
9
Tas.
104
0
0
0
NT
0
0
0
0
ACT
0
0
0
0
Australia
1 800
1 564
594
2 158
Percentage of total volume of temporary trades
72
28
100

(a) 1 GL = 1 Gigalitre = 1,000,000,000 Litres. Total volume traded includes trades within each state/territory and outgoing interstate trades.
Source: National Water Comission, 2009, Australian Water Markets Report 2008-09.


Australia is one of a small number of water-scarce countries that has instituted markets for trading water.

The National Water Commission (NWC) considers water trading important because it allows this vital resource to be transferred for productive and environmental uses.

Trading can occur on a temporary or permanent basis. Temporary transfers, where water entitlements are leased for a specified period of time (usually one year), are the most commonly used method of trading water in Australia. This market depends mainly on how much rain has fallen and how hot the season has been.

In 2008–09, a large portion of the Murray-Darling Basin experienced below-average rainfall. Many regions also suffered from an extreme heatwave in January and February 2009, which increased evaporation and, therefore, reduced water availability. This created a strong demand for water transfers, which resulted in about $2.2 billion of water trades in 2008–09, up 75% from the previous year (while the volume traded increased by 57%).

The NWC recorded 5,766 permanent and 26,285 temporary water trades in Australia in 2008–09. These trades totalled 3,958 GL of water, of which 2,158 GL changed hands temporarily and 1,800 GL were traded permanently. Nearly three-quarters (72%) of temporary trades occurred internally (within states). Interstate trades accounted for 28% of temporary trades during 2008–09, up from 15% in 2007–08. All the water traded permanently was traded within states.

New South Wales traded the largest volume of water during 2008–09. Within the state, 1,286 GL were traded in permanent trades and 871 GL in temporary trades. New South Wales also traded 560 GL to other states in 2008–09.

Victoria was also a major water trader in 2008–09. Within the state, 252 GL of permanent trades occurred, as well as 344 GL of temporary trades. Victoria also traded 30 GL to South Australia during the year.

The Australian government also purchases water entitlements, through the Restoring the Balance in the Murray-Darling Basin program, which aims to protect or restore the environmental assets of the basin. By 30 June 2009, the program had purchased 64 GL of water, and the government had exchanged contracts for a further 382 GL.

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