Water Act 2007 and the Murray-Darling Basin Plan: SDLs and Water Resource Plans

Water Act 2007 framework

The Water Act 2007 (Cth) establishes the legal basis for managing the Murray-Darling Basin for the national interest. It provides the overarching framework for water resource management within the Basin. The Act also requires consideration of EPBC Act environment protection biodiversity matters.

A key element of the Act is the creation of the Murray-Darling Basin Authority (MDBA). The MDBA operates as an independent statutory body and is responsible for developing and implementing the Basin Plan.

Basin states—New South Wales, Victoria, Queensland, South Australia, and the Australian Capital Territory—have transferred their legislative powers relating to the Murray-Darling Basin under the Murray-Darling Basin Agreement. The Basin Plan 2012, a legislative instrument, was developed under section 33 of the Act and sets environmentally sustainable limits on water extraction.

Sustainable diversion limits

Sustainable diversion limits (SDLs) cap how much surface and groundwater can be taken from the Basin on a long-term-average basis. These limits are set for 29 surface-water resource units and 80 groundwater resource units across the Basin. EPBC Act environmental offsets policy may be relevant to projects impacting water resources.

The SDLs came into effect on 1 July 2019, replacing earlier interim cap arrangements. This marked a shift in the management of water resources within the Murray-Darling Basin.

A Sustainable Diversion Limit Adjustment Mechanism allows SDLs to move by up to 5% based on supply and efficiency measures. The Water Amendment (Restoring Our Rivers) Act 2023 extended deadlines for supply and efficiency measures to 31 December 2026.

Water resource plans

Each area managed under a Sustainable Diversion Limit (SDL) resource unit is governed by a Water Resource Plan (WRP). These plans are prepared by the relevant Basin state and are essential for implementing the Murray-Darling Basin Plan. Biosecurity Act 2015 overview

WRPs detail how the Basin Plan’s requirements are put into practice at a state level. They cover operational rules relating to planned environmental water, water allocations, and metering. Before a WRP can be used, the Murray-Darling Basin Authority (MDBA) assesses it against the requirements outlined in Basin Plan Chapter 10.

Accredited WRPs remain in effect for a period of ten years and are subject to review before renewal or amendment. Both the MDBA and state regulators have the authority to enforce compliance with these plans.

Compliance, water markets and reform

Compliance with Sustainable Diversion Limits (SDLs) is a key focus of the Murray-Darling Basin Plan. The Murray-Darling Basin Authority (MDBA) monitors this through annual SDL Water Take Reports. An independent Inspector-General of Water Compliance was established to investigate potential breaches and instances of meter-tampering. This role supports accountability in water management across the Basin, and considers impacts on EPBC environment protection biodiversity values.

Water entitlements and allocations are actively traded on Basin water markets. The Australian Competition and Consumer Commission (ACCC) regulates these markets as part of the Water Market Reform package. The Commonwealth Environmental Water Holder manages a significant volume of water entitlements, approximately 2,000 GL, to support environmental needs within the Murray-Darling Basin.

Recent legislative changes, through the 2023 Restoring Our Rivers Act, have enabled voluntary water buybacks. This approach aims to recover the remaining 450 GL of the original 3,200 GL water recovery target, contributing to the overall objectives of the Murray-Darling Basin Plan.