4613.0 - Australia's Environment: Issues and Trends, 2007  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 11/01/2008   
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Water availability - counting the drops
Water consumption - conflicting demands, balancing needs
How healthy are our rivers?
Water management - making every drop count
Case study: The Murray - Darling Basin


Water is a valuable resource. Apart from drinking water and household use, Australians rely on water as an input to almost every industry in the nation’s economy, particularly agriculture.

In the past, Australians have generally thought of water as a free resource. However, drought and water restrictions in many areas of Australia since 2002, together with increasing evidence of the adverse effects of increased water use on river health, is changing the way we regard water. It is now widely recognised that taking too much water out of Australia’s rivers and groundwater systems can have detrimental economic and environmental consequences. These can include declines in native animal and plant populations (and possible extinctions) and reduced agricultural production (e.g. caused by reduced availability of water or salinity).

To address these water availability issues, there is a need to balance the different demands. The states and territories, along with the Australian Government, officially recognised the need to improve the efficiency of water use and the health of Australia’s river and groundwater systems, with the signing of the National Water Initiative (NWI) in 2004, which was built on the Council of Australian Governments (COAG) framework for water reform signed in 1994. The NWI involves a range of reforms to the water industry, including water trading. To provide a baseline of conditions at the start of the NWI reform process, the National Water Commission (NWC) commissioned an assessment of water resources, Australian Water Resources 2005 (AWR 2005).

There is a lack of accurate, nationwide environmental data on which to base a clear national picture of the state of Australia’s water resources. (Endnote 1). The Water Act 2007, is a key mechanism for implementing elements of the Australian Government’s National Plan for Water Security including increasing the availability and quality of information on water at the national level. Within existing data limitations, this article looks at some of the nation’s major water issues.
  • Availability: The volume of water available is determined mainly by rainfall, which affects run-off and groundwater supplies. Rainfall is variable and in recent times many parts of Australia have experienced prolonged periods of drought. Population growth also contributes to pressure on water supplies. Water storage in dams and aquifers (underground storage) is important to secure water supplies for human use. However, storage is also an environmental issue, for example, dams disrupt and deplete environmental flows. This can adversely affect flora and fauna downstream.
  • Consumption: Water consumed for drinking and in our homes and gardens is only a small part of the total water use in Australia (11% of total water consumed in 2004-05). Most of the water consumed in Australia is by the agriculture industry, which accounted for nearly two-thirds (65%) of total water consumed in 2004-05.
  • River health: Water quality is directly related to river and wetland health. Human activities can exacerbate river health problems such as salinity, turbidity and blue-green algae outbreaks. Reduced water quality and flows can affect the agricultural and tourism industries and damage the plants and animals that rely on the water for food and habitat.
  • Management and conservation: The recent drought has firmly focused attention on the need to conserve water. One-third of farmers reported water-related management activities in 2004-05. For households, mandatory water restrictions apply in many parts of Australia to limit outdoor water use, and many Australians have been voluntarily conserving water by adopting water saving practices and installing water saving devices.
Oceans and estuaries are outside the scope of the article.


The availability of water determines the quantity of water that society can use for agriculture, recreation, industrial and domestic purposes. Water availability is also critical for ecological processes, which are in turn fundamental for the wellbeing of society.

Water is ultimately a renewable resource. Water is constantly exchanged between the oceans, the land and the atmosphere (the hydrologic cycle). For example, water evaporates from oceans and rivers into the atmosphere and then falls as rain, snow, etc. The amount of rain, as well as the rate at which it evaporates, is transpired by plants, or runs off land to fill rivers and aquifers, determines how much water is available.

Water is a scarce resource in many parts of Australia. To secure water supplies, water is stored above ground (for example, in dams) and below ground in aquifers. This is important in Australia because of variable rainfall, both across the continent and from year-to-year.

In recent years, low rainfall in many parts of Australia has led to low water storage levels, causing concern about the adequacy of water supplies.

Population increase, especially in coastal urban areas, is placing further pressure on water supplies.

Population projections
Graph: Population projections
Source: ABS, Population Projections, Australia, 2004 to 2101 (cat. no. 3222.0).

Over the decade to June 2006, Australia’s population has grown by 2.2 million people or about 12%. Future projections indicate that Australia’s population could range between 25 and 33 million people by the year 2051 (depending on various assumptions about future levels of fertility, mortality and overseas migration), thereby placing further pressure on water resources. Predictions are for higher growth rates in all capital cities, compared to regional and rural areas. This will see further concentration of the population in capital cities.

Population growth - 1788 to 2006
Graph: Population growth
Source: ABS, Australian Historical Population Statistics, 2006 (cat. no. 3105.0.65.001); Australian
Demographic Statistics, March 2007 (cat. no. 3101.0).

From drought to flooding rains

The major driver of water availability in Australia is rainfall. Australia’s long-term annual average rainfall is 472 millimetres (mm), the lowest of all the continents (except Antarctica) (Endnote 2).

A notable feature of Australia's climate is the high variability of its rainfall. Australia's climatic zones range from high rainfall tropical regions in the north through desert regions in the interior to the temperate regions of the south. Rainfall in Australia varies not only from region-to-region but also from year-to-year and from season-to-season.




1 276.5
1 194.0
1 847.1
Alice Springs

Averages are for the standard climate normal period (1971 - 2000) except for Adelaide (1977-2000). Brisbane, Perth, Darwin and Canberra averages are for observations taken at airports, others are at locations in or near the central city.
Source: Bureau of Meteorology, http://www.bom.gov.au, last viewed 3 September 2007.

The average total rainfall throughout Australia for 2006 was 493 mm, slightly more than the long-term average of 472 mm. However, this average was a combination of well-above average totals across the more sparsely populated areas of northern and inland Western Australia, and well-below average totals recorded in the south-east and far south-west where the majority of Australia’s population and agricultural production is concentrated.

The well-below average totals continued into 2007, particularly in the agriculturally important Murray-Darling Basin. October 2007 marked the sixth anniversary of lower-than-average rainfall totals - the November 2001 to October 2007 period was the Basin’s equal driest six-year period on record. Accompanying high temperatures exacerbated the impact of this low rainfall (Endnote 3).

El Niño

The variability in seasonal and yearly rainfall experienced on the Australian continent is related to the climate phenomenon known as El Niño-Southern Oscillation (ENSO). El Niño is well known in Australia since it is often associated with reduced winter and spring rainfall, especially in eastern Australia, which can lead to drought conditions and increased bushfire risk. It was also the dominant cause of the drought experienced throughout south-eastern Australia in 2006 (Endnote 4).

El Niño refers to a warming of surface water over the central and eastern tropical Pacific Ocean. Associated with this warming are changes in the atmosphere (measured by the Southern Oscillation Index which measures the air pressure difference between Tahiti and Darwin) that affect weather patterns across much of the Pacific Basin, including Australia.

La Niña, the opposite of El Niño, is often associated with above-average rainfall and flooding. By continuously measuring changes in air pressure, sea surface temperatures, and other variables, meteorologists are able to predict El Niño and La Niña events.

El Niño events have been affecting the Pacific Basin for thousands of years, usually occurring about every four to seven years and lasting for about 12-18 months. However, in recent years El Niño events have been happening more frequently, occurring in 1986-87, 1991-1992, 1994, 1997-98, 2002-03 and 2006 (Endnote 5).


In most parts of Australia, only a small proportion of rainfall finds its way into rivers, lakes, dams and aquifers. Australia's Murray-Darling Basin, for example, is one of the largest catchments in the world, but it is also one of the driest. The average annual flow of the Murray-Darling would pass through the Amazon River in less than a day (Endnote 6).

Variable rainfall, high evaporation (especially in inland Australia) and mountains that are not high by world standards, have led to low surface water flows. Consequently, discharge of Australia's rivers into the sea is by far the lowest of any of the continents, excluding Antarctica (Endnote 7).

However, where annual rainfall is relatively high, including parts of Tasmania and northern Australia, run-off is also high.


Dams have been built in Australia since the late-1800s to provide a reliable water resource for irrigation, urban water needs and hydro-electric power generation.

At the start of the 20th century, the combined storage capacity of all large dams was 250 GL, increasing to 9,540 GL by 1950 and to 83,853 GL in 2005.

Total storage capacity of large dams
Graph: total storage capacity of large dams
Source: ABS, Water Account, Australia, 2004-05 (cat. no. 4610.0).

Australia has about 500 large dams. A large dam is defined as having a height of greater than 15 metres (m), or as greater than 10 m but meeting other size criteria (Endnote 8).

Australia has the highest per capita water storage capacity in the world, more than 4 million litres per person (Endnote 9).

However, storage levels in many dams have continuously declined in the period from 2001 to 2006 as a result of reduced inflows due to the drought and continued water extractions.

Drought conditions were reflected in an 18% fall in the water stored in large dams between 2002 and 2005. On 1 July 2002, storage levels were at 48,683 GL, falling to 39,959 GL by 30 June 2005.

Large dam storage levels
Graph: Large dam storage levels
Source: ABS, Water Account, Australia, 2004-05 (cat. no. 4610.0).

Despite rainfall in the first half of 2007, at the end of August 2007 many dams were yet to return to their pre-drought levels according to major metropolitan water providers. Sydney’s dam storage levels had recovered to more than half full in August 2007, but those in Canberra, Melbourne and Perth remained less than half full. As a consequence, water restrictions remained in place in all capital cities (except Darwin and Hobart) and in many regional areas into the second half of 2007.

Farm dams have been estimated to hold nearly 10% of total water stored in Australia (Endnote 10). Farm dams intercept run-off before it reaches rivers and streams, which can reduce the flow of water in waterways. Estimates from Victoria suggest that up to 70% of water in farms dams is lost to evaporation (Endnote 11).


While surface water supplies in dams and reservoirs are usually the main focus when assessing water availability, Australia also has significant groundwater reserves.

Groundwater is water contained underground in geological formations, made up of porous rocks or soils, known as aquifers. Surface water (in rivers) and groundwater can be interconnected as water seeps through riverbeds and percolates down to become groundwater. They can also be interconnected as groundwater surfaces in wetlands or streams due to the removal of deep-rooted (usually native) vegetation.

About 80% of total water consumed in Australia is surface water and about 20% is groundwater. However, national estimates for the ratio of groundwater to surface water consumption have not been updated since 1996-97.

Groundwater as percentage of total water use, by state, 1996-97
Graph: Groundwater as a percentage of total water use, by state, 1996-97
Adapted from: National Land and Water Resources Audit 2001, Australian Water Resources Assessment 2000, Land and Water Australia, Canberra.

Some areas have a high dependence on groundwater, such as Western Australia and the Northern Territory, where well over half of the consumption is supplied from groundwater sources. Groundwater quality can vary considerably, particularly with regard to the amount of dissolved salt (salinity) that affects its suitability for human consumption and agricultural use.

The Great Artesian Basin is Australia's biggest source of groundwater. It extends for 1.7 million km2 under Australia including parts of South Australia, New South Wales, Queensland and the Northern Territory. It contains 64.9 million GL of water and is the world's largest artesian groundwater basin (Endnote 12).

Aquifer storage and recovery

Aquifer storage has many potential advantages over surface water storages such as dams and reservoirs. Aquifers can store large quantities of water without losses from evaporation and with reduced risk of contamination, both of which are problems associated with surface water storages.

Aquifer storage and recovery (ASR) is a human modification of the groundwater recharge system that has been occurring naturally for millions of years. Natural groundwater recharge occurs by filtration of rainwater through the soil profile, past the vegetation root zone and down to permeable rocks known as aquifers. ASR involves gravity feeding or injecting water into a suitable underground aquifer for storage and later reuse.

ASR can be a way to artificially recharge depleted underground water supplies. For example, during high rainfall periods, excess stormwater, filtered and cleaned (by the wetlands) can be pumped into the aquifer. During dry periods, the water is recovered from the aquifer, when needed to irrigate sporting fields and turf areas.

In South Australia, ASR trials have used stormwater filtered and cleansed at the Kaurna Park wetlands and stored in aquifers, for use in irrigation. In Western Australia, an ASR project for a groundwater aquifer in Cottesloe will filter stormwater to replenish the aquifer.

ASR avoids the impacts that dams have on ecological systems (such as disruption and depletion of environmental flows and restricting movements of fish along waterways). However, if it involves depleting groundwater reserves, it can be as ecologically damaging as the depletion of surface water in rivers, through reducing the supply or quality of water to wetlands and surface waters on which large numbers of species rely.


Desalination is seen by some as the way to drought-proof Australia’s cities, at least those in coastal areas. Desalination plants remove the salt from seawater or brackish water to make it suitable for drinking. Worldwide, more than 23 GL of desalinated water is produced each day (Endnote 13). Most of this is in the Middle East and North Africa, with 100% of the water in Kuwait and Qatar sourced from desalination plants.

At Kwinana, near Perth, a desalination plant started production in late 2006, providing 130 ML a day, about one-fifth of Perth’s water use. This plant uses the reverse osmosis method that has a synthetic membrane that allows water molecules to pass through, but not salts.

Desalination is a relatively expensive way to produce drinking water. However, over the past decade improved technologies have reduced the cost of desalination from between $3.00 to $5.00 a cubic metre (m3) to between $0.46 to $0.80/m3, depending on local conditions (Endnote 14).

Water supply option
Energy use in kilowatt hours per kilolitre (kWh/kL)

Reverse osmosis of seawater (seawater desalination)
Brackish reverse osmosis (stillwater desalination)
Municipal wastewater reclamation
Conventional water treatment

Source: Issues encountered in advancing Australia's water recycling schemes, viewed September 2007. <http://www.aph.gov.au/library/pubs/rb/2005-06/06rb02.pdf>.

It is also relatively expensive in terms of energy use and has associated environmental costs such as greenhouse gas emissions. The process also produces a brine waste product that has potentially hazardous effects on the marine environment.

Controversy surrounds the use of renewable energy (such as wind or solar power) to reduce the greenhouse gas emissions associated with desalination, particularly if the desalination plant draws power from the electricity grid. If renewable energy feeds into the electricity grid, the network effectively combines all electricity from all generators so it is not possible to direct the renewable energy flows to a particular user, such as a desalination plant. Further, if the renewable energy would otherwise have been used to supply other users, then for any new desalination plant to meaningfully claim it is powered by renewable energy, additional renewable energy must be generated, equal to the electricity consumption of the plant over time (Endnote 15).

Urban centre
Population (mill.)
    Desalination status

    Planned desalination plant to provide up to 250 ML a day by 2010
    Study into planned desalination plant near Wonthaggi, to provide 150 GL a year by 2012 (a third of Melbourne’s water)
Brisbane & Gold Coast
    Approval for desalination plant at Tugan in south-east Qld to provide 120 ML a day
    Desalination plant at Kwinana providing 130 ML a day, with another 130 ML a day plant proposed
    Planned desalination plant to provide 50 GL a year by 2012

Adapted from: Knights et al, 2006, viewed September 2007, <http://www.ceem.unsw.edu.au/content/userDocs/OzWaterpaperIMRP_000.pdf>. ABS, Regional Population Growth, 2005-06 (cat. no. 3218.0).


Recycling water is regarded as a less expensive and more environmentally friendly alternative to desalination. Recycled water is used overseas and the scientific evidence overwhelmingly shows it is safe to drink. However, there is a perception that the Australian public is reluctant to allow recycled water directly into the drinking water system because of health concerns. This perception was reinforced when, in 2006, 62% of Toowoomba residents voted against a proposal to source 25% of the city's water from recycled effluent.


The most recent data on water consumption in Australia shows a fall of 14% between 2000-01 and 2004-05 to 18,767 GL, largely due to the effects of the recent drought in many parts of the country.

The graph below shows the biggest fall in water consumption was in agriculture. Reduced rainfall meant less water available for irrigation, prompting farmers to reduce their area of planting. The table opposite shows that agriculture was the highest water consumer in every state and territory.

Western Australia saw relatively high water consumption by the mining industry reflecting the high level of mining in that state. Tasmania saw high consumption by the manufacturing industry mainly due to wood and paper manufacturing.

For most industries, water use and water consumption are the same, however, consumption will be different for some industries, specifically the Water supply, sewerage and drainage service industry, and Mining and Manufacturing industries where in-stream water use and water supply volumes are high.

Water consumption is equal to the sum of distributed water from water suppliers and self-extracted water use and reuse water, less in-stream use and distributed water to the environment.

Percentage of total

4 134
Water Suppliers
3 281
Water Suppliers
2 916
Water Suppliers
1 020
Other Industries

Note: 'Water Suppliers' include sewerage and drainage services.
Source: ABS, Water Account Australia, 2004-05, (cat.. no. 4610.0).

Water consumption, Australia
Graph: Water consumption, Australia
(a) Includes services to agriculture, hunting and trapping
(b) Includes sewerage and drainage services
(c) Includes water losses
Source: ABS, Water Account Australia, 2004-05 (cat. no. 4610.0).

Water consumption - agriculture

Agriculture accounts for nearly two-thirds (65%) of Australia’s total water consumption. The amount of water consumed by agriculture was 12,191 GL in 2004-05, nearly one-fifth less (19%) than in 2000-01 when it was 14,989 GL.

Within the agriculture industry, the category “livestock, pasture, grains and other agriculture” had the highest water consumption, 4,374 GL (36%). This can be broken down into livestock (1,035 GL), pasture (1,928 GL) and grains (1,162 GL). Dairy farming consumed 2,276 GL or 19% of total water consumption, cotton consumed 1,822 GL (or 15%) and sugar 1,269 GL (or 10%).

Agriculture water consumption, by activity
Graph: Agricultural water consumption, by activity

(a) Includes livestock, pasture, grains and other agriculture (excluding dairy farming).
Source: ABS, Water Account Australia, 2004-05 (cat. no. 4610.0).

The largest percentage fall in water consumption from 2000-01 to 2004-05 was in rice (72%) from 2,222 GL to 631 GL. Cotton fell 37% in the period from 2,896 GL to 1,822 GL. This was a result of dry conditions in New South Wales and a reduction in the irrigated area of these crops because of reduced water allocations due to the drought.

Consumption of water by agriculture was greatest in New South Wales, which accounted for more than a third (34%) of total agricultural water consumption. Next was Victoria (27%) and then Queensland (24%). New South Wales combined with the Australian Capital Territory (ACT) had the largest fall in agricultural water consumption from 2000-01 to 2004-05 (6,795 GL to 4,134 GL). Of this, the ACT accounted for only about 1 GL.

Water consumption - agriculture
Graph: Water consumption - agriculture
Note: NT values too small to show.
Source: ABS, Water Account Australia, 2004-05 (cat. no. 4610.0).

Irrigation on Australian farms

Nearly all of the water used for agricultural production in 2004-05 (91%) was for irrigation of crops and pastures. The rest was for other agricultural uses, such as drinking water for stock and dairy/piggery cleaning.

More than a quarter (27%) of Australian farms use irrigation. In 2004-05, a total of 35,244 farms applied a total of 10,085 GL of water to 2.4 million hectares. This area represents less than 1% of agricultural land used for pasture and crops in Australia.

Farms that irrigated generated, on average, 55% more output per farm in 2003-04 than farms that did not irrigate - although the average land area of irrigated farms was less than that of non-irrigated farms.

The gross value of irrigated production (GVIP) in Australia was estimated at $9.1 billion in 2004-05, around one-quarter (23%) of the gross value of all agricultural production. GVIP is measured as the volume of irrigated commodities produced, valued at wholesale prices.

Data from 2003-04 show that more than half (52%) of GVIP came from irrigated horticulture, with irrigated pastures and irrigated broadacre crops each contributing around one-quarter. Horticultural crops include fruit trees, nut trees, berries, vegetables and grape vines.

In 2003-04, irrigated broadacre crops accounted for nearly half (45%) of Australia’s irrigation water use and 42% of the irrigated area. Broadacre includes mainly annual crops such as rice, cereals, sugar and cotton.

Within the irrigated broadacre crops group, cereal crops was the largest cropping activity in terms of irrigated area, however the activities that have increased most since the early 1980s, both in terms of irrigation water use and area cultivated, are cotton, rice and sugar.


Percentage of agricultural establishments irrigating
Volume applied (GL)
10 442
10 085
Application rate (ML/ha) (a)

(a) Averaged across all irrigated pastures and crops.
Source: ABS, Water Use on Australian Farms, 2004-05 (cat. no. 4618.0).

The value of irrigated broadacre production was lower in 2003-04 than in earlier years, primarily reflecting lower income from rice and cotton growing. The drought contributed to a sharp reduction in the area harvested of both cotton and rice in 2002-03 and 2003-04.

Nationally, the most common source of irrigation water was surface water, such as rivers and dams, reported by three-quarters of irrigating farm establishments. Recycled or re-used water from off-farm sources accounted for about 2% of water used by agriculture.

Farms undertaking
this activity
Farms irrigating
this activity
Farms irrigating this
activity as a
percentage of
all farms with
this activity
Farms with this
activity as the
main irrigated
activity as a
percentage of
all farms with
this activity (b)

103 364
16 943
Broadacre crops
55 656
12 507
Horticultural crops
20 480
17 032
Total (a)
130 526
40 400

(a) The total number of farms is less than the sum of the number of farms engaged in each activity because many farms have more than one activity.
(b) The main irrigated activity is defined as that irrigated activity which occupied the largest area of irrigated land on the farm.
Sources: ABS, Characteristics of Australia’s Irrigated Farms, 2000-01 to 2003-04 (cat. no. 4623.0).

Water consumption - manufacturing

In 2004-05, the manufacturing industry consumed 589 GL (or 3% of Australia’s total water consumption). This was 7% higher than the water consumed by manufacturing in 2000-01 (549 GL).

All states and territories, except Tasmania and the Northern Territory, increased their total manufacturing water consumption from 2000-01 to 2004-05. The state or territory with the highest manufacturing water consumption was Queensland (158 GL), followed by New South Wales and the Australian Capital Territory combined (127 GL), and then Victoria (114 GL). Within the manufacturing sector, the largest volume of water was used by manufacturers of Food, beverage and tobacco (215 GL), followed by Metal products (146 GL) and then Wood and paper products (99 GL).

Water consumption - manufacturing, by state
Graph: Water consumption - manufacturing, by state
Source: ABS, Water Account, Australia, 2004-05 (cat. no. 4610.0).

Water consumption - manufacturing, by activity
Graph: Water consumption - manufacturing, by activity
Source: ABS, Water Account Australia, 2004-05, (cat. no. 4610.0)

Water consumption - mining

Water consumption by the mining industry rose by nearly one-third (29%) from 2000-01 to 2004-05, reflecting increased activity in the resources sector (the “mining boom”). In 2004-05, total water consumption by the mining industry was 413 GL (or 2% of total water use in Australia) compared to 321 GL in 2000-01. Western Australia had the highest mining water consumption (183 GL), followed by Queensland (83 GL). New South Wales (combined with the Australian Capital Territory) consumed 63 GL.

Water consumption - mining, by state
.Graph: Water consumption - mining, by state
Source: ABS, Water Account Australia, 2004-05 (cat. no. 4610.0)

Water consumption, mining activity
Graph:Water consumption, mining activity
Source: ABS, Water Account Australia, 2004-05, (cat. no. 4610.0)

Water consumption - households

Household water consumption fell by 7% from 2000-01 to 2004-05. Water consumption by Australian households was 2,108 GL in 2004-05, accounting for 11% of total water consumed. This compares with 2,278 GL in 2000-01, which was 10% of total consumption.

The decrease may be attributed, in part, to mandatory water restrictions in most states and territories since 2002, which have mostly focussed on the use of water outside the house. During this period, many Australians also have been voluntarily conserving water by adopting water saving practices and installing water saving devices, such as dual flush toilets.

Water consumption - households, by state
Graph: Water consumption - households, by state
Source: ABS, Water Account Australia, 2004-05 (cat. no. 4610.0).


Water use for agriculture, industry and households has had a significant effect on the nation's rivers. Water resource development, such as dams and weirs, have altered the availability and quality of water in many rivers and led to an overall decline in river health.

Australia has the highest per capita water storage capacity in the world, with most of this water used for irrigation. Most of the water is held in a few very large dams, the 10 largest comprising about half the total capacity. As a result, many Australian river systems suffer from substantial reductions in the volume of river flows and altered flow patterns (Endnote 16).

This can cause damage to plant and animal communities that rely on the river for their food and habitat. In addition, river health problems such as salinity, blue-green algae outbreaks and turbidity, which all occur naturally, are exacerbated by human activities that alter the river flow and water quality. Excessive nutrients have contributed to severe algal bloom outbreaks. Irrigation and clearing for agriculture have worsened salinity problems on land and in inland waters, and turbidity and sedimentation in waterways. They have also contributed to the reduction in the quality of water by removing the water storage capacity of the surrounding vegetation and the bank stability provided by its roots.

Altered river flows can have serious implications for the plants and animals that rely on the water for their food and habitat. To give just a few examples:
  • dams and weirs prevent some native fish species from moving between spawning, nursery and adult habitats, thereby reducing their reproduction and growth leading to population declines. For example, natural populations of golden perch have disappeared from the River Murray above the Hume Dam due to river fragmentation (Endnote 17).
  • floods and high flows are important parts of a river's natural flow pattern, but dams trap a proportion of natural high flows, which reduces or eliminates downstream flooding. The Barmah-Millewa Forest is the world’s largest river red gum forest and is recognised as a Ramsar wetland of international importance. River red gums require frequent flooding to regenerate and grow. Without adequate flooding in the near future, the result is likely to be a significant loss of river red gum communities on the lower River Murray floodplain (Endnote 18).
  • releases of very cold water from the bottom of dams can depress water temperatures to the level at which some large native fish species are unable to breed.

Reduced water quality, in turn, affects the wider community, including agricultural producers and people involved in the recreation and tourism industries (e.g. boating, fishing, swimming) who rely on healthy rivers for their livelihood.

Water quality and river health

Water quality is directly related to river and wetland health. Many factors are involved in water quality, which can vary from place-to-place and from time-to-time, even within a particular river system. There is no single, national, widely-accepted method used to assess river health.

Current approaches rely either on assessments of individual biota groups (e.g. invertebrates, fish and algae), on assessments of physical river condition, or combinations of various biological, physical and chemical assessments.

The Australian Water Resources 2005 (AWR 2005) assessment included a Framework for the Assessment of River and Wetland Health (FARWH) based on six key components that represent ecological integrity and function, including water quality and soils, catchment and hydrological disturbance, aquatic biota, fringing vegetation and physical form. For more information about FARWH, see the Water Trends section.

IndicatorPotential impacts from changes

  • Increased water surface temperature due to changes in light penetration
  • Increased sedimentation can cause changes in breeding patterns of bottom gravel dwelling organisms
  • Suspended particles can cause suffocation in some fish, adversely affect fishing, aquaculture and tourism
  • Increased cost of treating affected water
  • Excess leads to excessive plant growth which chokes waterways
  • Increased nitrogen increases algal growth and 'nuisance plants'
  • Reduction in light penetration smothers habitats of bottom gravel dwelling animals
  • Decreased dissolved oxygen due to weed mat die off
  • Increased occurrence of blue-green algal blooms
  • An increase or decrease affects fish breeding (spawning)
  • Changes in algae occurrences
  • Increased physiological stress on organisms leading to population declines in native aquatic animals
  • Growth inhibition of aquatic plants
  • Adverse effects on riverbank vegetation, bank erosion
  • Reduced suitability of river water for irrigation
  • Increased costs for treating drinking water

Source: National Land and Water Resources Audit, Australian Catchment, River and Estuary Assessment, 2002.

In order to assess water quality, it is necessary to know the intended use of the water. Water used for hydro-electric power generation or industrial uses does not require high standards of purity. However, water for drinking, fishing and animal and plant habitat does need to be of high quality. The maintenance of estuarine and marine water quality is equally important but is beyond the scope of this article.

The most common chemical indicators used to assess water quality in rivers are salinity, turbidity, nutrients (nitrogen and phosphorus) and acidity/alkalinity (pH). Potential impacts of such indicators are shown in the table above.

Significant gaps in the coverage of water quality monitoring preclude a comprehensive assessment of all Australia's river systems.


Salinity occurs naturally in Australia, but the clearing of native vegetation and use of water for irrigated agriculture, domestic and other uses, has caused the salt stored beneath the ground to come to the surface in many areas.

There are two forms of salinity, dryland and irrigation salinity. Dryland salinity is the predominant type and occurs when salts are brought to the soil surface, primarily through the replacement of deep-rooted native vegetation with shallow-rooted annual crops and pastures that use less water, causing the water table to rise, bringing salt with it. Irrigation salinity is associated with excessive irrigation.

Estimated current annual costs of salinity include $130 million in lost agricultural production, $100 million infrastructure damage and at least $40 million in loss of environmental assets (Endnote 19). Rising salinity also threatens biodiversity.

The area of land affected by salinity in Australia, according to two different surveys (PMSEIC and ABS shown in the table below), shows results varying from a minimum of 1,969,000 hectares (ha) to a maximum of 2,476,000 ha. Up to 5,658,000 ha was assessed by the NLWRA as being at risk of salinity. Salinity is also a major water quality issue in 24 (32%) of 74 assessed river basins (NLWRA).

AREA AFFECTED BY DRYLAND AND IRRIGATION SALINITY, comparison of ABS survey results with other estimates
NLWRA 2001
ABS 2002
Area of salinity
affected land (a)
Area at risk
of salinity (b)
Areas showing signs
of salinity (c)
‘000 ha
‘000 ha
‘000 ha

1 802
4 363
1 241
2 476
5 658
1 969

* denotes relative standard error (RSE) of this estimate is greater than 25% but less than 50%, therefore use with caution.
(a) Determined by experts - Prime Minister’s Science, Engineering and Innovation Council (PMSEIC) 1999 - includes non-agricultural land.
(b) Estimated from water table heights by the National Land and Water Resources Audit (NLWRA) 2001.
(c) Reported by farmers.
Source: ABS, Salinity on Australian Farms, 2002 (cat. no. 4615.0).

Restoring flows

In the interest of maintaining the health of rivers, a number of states and territories have begun to plan to allocate and provide water to the environment - generally known as “environmental flows”.

Environmental flows recognise the needs of rivers for an amount of water to maintain ecological health for the protection of the environment and sustainability of water resources.

The ABS Water Account Australia, 2004-05 presented information on water released for the purpose of the environment in accordance with specific environmental regulations. This has been termed environmental provisions, in recognition that it does not represent all environmental flows, but only the volume of water released by water suppliers. Other methods of providing water to the environment include placing limits and rules on licences for water extraction and strategic management of flows and water quality.

In 2004-05, 1,005 GL of water was supplied to the environment by water providers. This is an increase of 119% across Australia since 2000-01. States with large increases were Queensland, Victoria and Tasmania.


1 005.3

- Nil or rounded to zero (including null cells)
Source: ABS, Water Account Australia, 2004-05 (cat. no. 4610.0).

Farms identifying water issues and water activities, 2004-05
Graph: Farms identifying water issues and water activities, 2004-05
Source: ABS, Natural Resource Management on Australian Farms, 2004-05 (cat. no. 4620.0).


Total expenditure ($million)
Average expenditure per farm ($)
9 474
5 189
9 241
4 836
5 095
3 833
18 474
3 405
7 351

Source: ABS, Natural Resource Management on Australian Farms, 2004-05 (cat. no. 4620.0).


Agricultural water management practices

In 2004-05, a third of all farms carried out water-related management activities, spending a total of $314 million in that year.

The most commonly reported water management activities were: earthworks, drains and water pumping; tree and shrub maintenance; and removing stock from waterways.

Water issues included surface and groundwater availability, excess nutrients, clarity, toxicity and other water issues. Of these, water availability was the most frequently reported water issue by farmers.

The drought affecting south-eastern Australia during 2004-05 was especially evident in New South Wales and Queensland where nearly three-quarters (73%) of farmers reported surface water availability as a major issue. This compares with 63.1% for Australia as a whole.

In Queensland, groundwater availability was also a major issue (45.5%).

Water trading - managing the resource

Until the 1990s, supplies of irrigation water were considered to be plentiful, and expansion of irrigated agriculture was encouraged through large-scale developments such as the Murrumbidgee and Murray Irrigation Schemes in the 1930s and the Snowy Mountains Scheme in the 1970s. However, the last decade has seen increased demand for water associated with general population and economic growth and concerns about the environmental impacts of higher consumptive water use. Together with six years of widespread drought in southern and eastern Australia, this has prompted significant developments in the use and management of Australia’s irrigation water resources.

In response to concerns about water scarcity, Australia is one of a small number of countries that has instituted markets for trading water. The NWC regards water trading as fundamental to water reform because it will help governments, water users and communities to better value and use the nation’s water resources (Endnote 20).

If farmers have sufficient water entitlements, they can choose to sell their water or use it on their crops. Being able to buy and sell water, assists agricultural producers in obtaining sufficient water for their crops. Water trade has directly facilitated at least some of the change over recent decades in the activity mix of irrigated agriculture. For example, in Victoria, water has been traded on a permanent basis away from sheep and cattle grazing towards dairy farming (Endnote 21).

Permanent water trades
Temporary water trades

2 042
9 323
1 874
1 802
13 456
1 052.8

- nil or rounded to zero (including null cells)
Note: Total for Australia cannot be calculated by taking the sum of the states and territories as this would double count interstate trades.
Source: ABS, Water Account, 2004-05 (cat. no. 4610.0).

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.

The advantage of temporary transfers includes the ability to increase and decrease water allocations as needed, rather than the significant financial investment usually involved in buying on a permanent basis. In 2004-05, there were 1,802 permanent and 13,456 temporary water trades involving 247.6 GL of water traded permanently and 1,052.8 GL traded temporarily.

Water trading, 2004-05
Graph Water trading, 2004-05
Note: WA and Tas. temporary trade figures too small to show.
Source: ABS, Water Account, 2004-05 (cat. no. 4610.0).

Victoria had the highest number of permanent and temporary water trades (702 and 9,323 respectively). Victoria also had the largest volume of water temporarily traded in Australia (444.3 GL). Western Australia had the highest volume of water traded permanently (62.8 GL).

As the data show, water trading is far from being a well-utilised and fully functioning mechanism for ensuring more efficient water use (Endnote 22). However, with the drought conditions that have affected many parts of Australia over the past six years, water trading has allowed many farms to survive despite low seasonal water allocations. Although water trading is not a panacea, the persistent dry conditions have highlighted the importance of an effective water market (Endnote 23).

Limiting the extent of water trading and water reform is the complexity of current water property rights. States and territories largely have the responsibility for water and catchment management, but each one has different approaches to defining environmental needs and acceptable levels of river and wetland health. This is further complicated when a river crosses state boundaries, such as in the Murray-Darling Basin which includes New South Wales, Victoria, Queensland, South Australia and the Australian Capital Territory, impeding progress in the development of a national water market. Australia’s experience with trying to establish and implement a uniform rail gauge, which took more than a century after Federation, highlights the difficulties that can be involved in achieving national consistency (Endnote 24).

Water trading on irrigated farms

While farms of all sizes engaged in trading irrigation water, trade has not been a frequent event for most farms.

Around 43% of irrigated pasture farms, 36% of irrigated broadacre farms and 27% of irrigated horticulture farms participated in some form of trade, temporary or permanent over the three years to 1 July 2003.

Broadacre activities include mainly annual crops such as rice, cereals, sugar, cotton, and soybeans. Horticulture includes fruit and nut trees, berries, vegetables and grape vines. However, few farms engaged in trade on a regular basis. Only 13% of irrigated pasture farms, 11% of irrigated broadacre farms and 10% of irrigated horticulture farms traded water in every year.

Most trade in irrigation water was on a temporary basis. In 2002-03, horticultural establishments were the main sellers, while farms with irrigated pastures and irrigated broadacre activities were the main buyers.

Following the drought in 2002-03, the temporary water market comprised a comparatively high number of small irrigated pasture farms selling relatively low quantities of irrigation water. Overall, temporary purchases were highest for large farms with pastures, cereals (excluding rice) or cotton as their main irrigated activity. Temporary trade by irrigated horticultural farms in 2002-03 was characterised by net sales of water by fruit and grape growers and large vegetable farms.

Consistent with earlier years of water trade in Australia, comparatively little trade on a permanent basis occurred in 2002-03. The largest net purchases on a permanent basis were by larger farms with irrigated sugar, cotton or pastures.

Balance of water trade, by irrigated activity, 2002-03 (a)
Graph: Balance of water trade, by irrigated activity, 2002-03
(a) Net trades do not add to zero due to sampling errors and unaccounted trades with non-irrigated agricultural establishments and with non-agricultural water users and suppliers and within sectors.
Sources: ABS, Characteristics of Australia’s Irrigated Farms, 2000-01 to 2003-04 (cat. no. 4623.0).

Household water conservation

Over the period 2000-01 to 2004-05, household water use per person decreased everywhere in Australia, except in Tasmania. Household water use includes water used for human consumption, such as drinking or cooking, and for cleaning or outdoors, such as for gardens and in swimming pools.

The decrease reflects in part, water restrictions in most states and territories since 2002 as well as voluntary conservation of water by households.

Household water consumption per person
Graph: Household water consumption per person
(a) Includes unlicensed water use from garden bores.
Source: ABS, Water Account Australia, 2004-05 (cat. no. 4610.0).

To encourage reductions in household water use, a number of state and territory governments offer incentives to households to conserve water. This has involved schemes that require or reward the installation of water-saving devices such as dual flush toilets.

Australia also introduced the first scheme of its kind in the world for water efficiency labelling of appliances. The Water Efficiency Labelling Scheme requires mandatory water efficiency labels on all shower heads, washing machines, toilets, dishwashers, urinals and some types of taps.

In 2007, more than three-quarters of all households (81%) had at least one dual flush toilet. Water-efficient shower heads were installed in more than half (55%) of households in 2007 (up from 22% in 1994).

Sources of water for households
Graph: Sources of water for households
Note: Grey water as a source of water not collected before 2007.
Source: ABS, Environmental Issues: People’s Views and Practices, March 2007, (cat. no.4602.0).

While mains/town water was overwhelmingly the main source of water for Australian households, with 93% connected in March 2007, grey water was the second most common source. Grey water is water re-used from waste water sourced from the shower/bath, laundry and kitchen.

More than half (55%) of all households reported grey water as a source in 2007. Grey water was more common as a source of water outside capital cities than within them, in every state except Queensland. In Queensland, 63% of households in Brisbane reported grey water as a source of water, but only 46% of households outside of Brisbane reported it as a source.

Rainwater tanks

In 2007, nearly one-fifth (19%) of all households sourced water from a rainwater tank, up from 16% in 2001.

In capital cities, more than one in ten households (11%) sourced water from a rainwater tank. This compared with more than more than one-third of households (34%) outside capital cities. In the capital cities, the most commonly reported reason for installing a rainwater tank was to save water. In areas outside the capital cities, the most commonly reported reason was that the dwelling was not connected to mains/town water.


The Murray-Darling Basin dominates irrigation in Australia, accounting for more than 70% of irrigation water use in Australia.

The Basin covers approximately one-seventh (14%) of the total area of Australia. It extends over three-quarters of New South Wales, more than half of Victoria, significant portions of Queensland and South Australia, and the whole of the Australian Capital Territory. The major rivers are the Darling River in the north of the Basin and the River Murray in the south. The Murrumbidgee and Goulburn rivers are major tributaries of the River Murray that support large irrigation schemes.

Key features of the Basin are its high evaporation rate and large annual variability in rainfall. The Murray-Darling Basin receives only 6% of Australia's annual
run-off. In the last 100 years, construction of major water storages on the River Murray and Darling River and their tributaries has supported large irrigation developments. The Basin provides about 70% of all water used for agriculture across the nation and accounts for 40% of Australia’s gross value of agricultural production. It supports a quarter of the nation’s cattle herd, half of the sheep flock and half of the cropland.

The total volume of water storage capacity of large dams in the Basin is more than 24,000 GL. This comprises nearly one-third (29%) of Australia's large dam storage capacity. The water stored in these dams is predominantly used for irrigated agriculture, but also for hydro-electricity generation, households, manufacturing and mining uses.

In addition to large dams, many farm dams exist in the Murray-Darling Basin. Hillslope farm dams have been estimated to be able to store up to 2,200 GL in the Basin and can act as a significant interceptor of run-off, potentially reducing stream flow (Endnote 25).

Reduced stream flow in the rivers can affect the health of many plants and animals that live in or near the river as well as water availability to downstream users.

The AWR 2005 provided a snapshot of Australia’s river and wetland health using the key findings of the Murray-Darling Basin Assessment of River Condition, conducted in 2000 including:
  • 10% of river length was identified as severely impaired, having lost at least 50% of the types of aquatic invertebrates expected to occur there.
  • More than 95% of the river length assessed in the Murray-Darling Basin had an environmental condition that was degraded and 30% was substantially modified from the original condition.
  • All reaches and catchments in the Basin had disturbed catchments and modified water quality.
  • Many parts of the Basin were threatened by multiple stresses, principally land use changes, damaged riparian vegetation, poor water quality and modified hydrology.

Large dam storage levels in the Murray-Darling Basin

Graph: Large dam storage levels in the Murray-Darling Basin
Source: ABS, Water Account, Australia, 2004-05 (cat. no. 4610.0).