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DWE Home > Home > Water Management > Water sharing plans > Water sharing plans to commence in 2006/2007

Achieving sustainable groundwater entitlements program

Introduction by the NSW Minister for Natural Resources, Ian Macdonald

Groundwater in NSW is a precious natural resource, one that sustains our rural and regional communities, as well as our natural environment and ecosystems.

It is vital that the management of this resource is practical, equitable and sustainable.

One of the major natural resource management issues confronting NSW groundwater sources is the over-allocation of many of the groundwater systems. Usage in some of these systems also exceeds sustainable yield, and these systems require both the level of entitlement and usage to be reduced in order to achieve long-term sustainability.

In recognition of this, the NSW and Australian governments have jointly invested $110 million in a new program to ensure that the six major groundwater systems in NSW are sustainable in the long term.

The Achieving Sustainable Groundwater Entitlements (ASGE) program was announced in June 2005. The program will help water users in the Upper and Lower Namoi, Lower Macquarie, Lower Lachlan, Lower Murray, Lower Gwydir and Lower Murrumbidgee groundwater sources manage the reduction in their entitlements.

These reductions are necessary to ensure sustainable use of our groundwater resources and form part of the NSW Government’s commitment to the National Water Initiative.

However, we recognise the changes will not be easy for all licence holders.

That’s why the NSW and Australian governments are offering financial assistance to eligible licence holders to help them adjust to these changes.

A range of measures, including perpetual licences, a financial assistance package, groundwater trading, and a ten-year transition period will form part of this program.

The following information outlines how the ASGE program will work and how individual water licence holders may be affected.

We have a complex and potentially difficult task before us, but one that I believe is necessary to ensure the groundwater resources of NSW remain viable well into the future.

In the meantime, the NSW Government, through the Department of Natural Resources, will continue to work closely with Catchment Management Authorities, irrigators, farmers, communities and conservation groups to ensure the best possible outcome for all.

What is the Achieving Sustainable Groundwater Entitlements (ASGE) program all about?

The Achieving Sustainable Groundwater Entitlement (ASGE) program is about securing a healthy and sustainable groundwater irrigation industry for NSW.

The level of entitlement in some inland groundwater systems is significantly greater than what can actually be extracted each year. To protect our limited groundwater resources for future generations, this over-allocation needs to be resolved.

To assist this, the estimated annual recharge has been calculated for each of the major groundwater systems in NSW. Recharge is the total volume of water that enters the groundwater system each year.

The proportion of the recharge which can be extracted each year having considered the socio-economic, environmental factors and the long-term sustainability of the resource is the sustainable yield.

The inland groundwater systems that are included in the ASGE program are the Upper and Lower Namoi, Lower Murrumbidgee, Lower Gwydir, Lower Lachlan, Lower Macquarie and Lower Murray.

These systems are all over-allocated, and over the past few years most of these systems have also experienced over-extraction. If left unchecked, this will result in significant adverse impacts to the resource and rural communities over the long term.

The Achieving Sustainable Groundwater Entitlements program has four main components:

• the reduction of water entitlements based on historical extraction
• a financial assistance package for licence holders of up to $100 million
• a Community Development Fund of up to $9 million to help strengthen communities
• up to $1 million for the implementation of the ASGE program including the costs for completing valuations and consultation.

How does this relate to the Groundwater Sharing Plans?

The Water Sharing Plans specify the management rules that will apply to each groundwater source over ten years. The plans have been tailored for individual groundwater sources, and consider the needs of water users, local communities, and the environment.

The plans will set out the details for how entitlements in the groundwater source will be reduced to the sustainable yield.

Each Water Sharing Plan will be amended to take into account changes resulting from community consultation. However the sustainable yield currently gazetted in the Water Sharing Plans will not be amended as part of this program.

The Water Sharing Plans for the Upper and Lower Namoi, Lower Gwydir, Lower Macquarie, Lower Lachlan, and Lower Murrumbidgee have previously been gazetted. Amendments to these plans will also need to be gazetted prior to their commencement on 1 October 2006. The draft Lower Murray plan has been placed on public exhibition and will be gazetted to commence on 1 October 2006.

Within the Water Sharing Plans, and in conjunction with the ASGE program, the level of entitlements in these systems will be reduced to equal the sustainable yield. The available extraction from each system will be gradually reduced from current levels to the sustainable yield over the ten years of the Water Sharing Plan.

How will it affect me?

There are two key ways in which the program will affect you.

Firstly, your current five-year renewable groundwater licence under the Water Act 1912 will be replaced by a new licence under the Water Management Act 2000. The megalitre volume on your current licence will be amended based on the ASGE program and you will be issued with a share in the groundwater resource. This new licence will be fully tradeable and is a perpetual right to access groundwater into the future.

The key principles, agreed to by both the NSW and Australian governments, to reduce current entitlements are:

• to recognise water-dependent investment made by licence holders, and
• to recognise that all groundwater entitlements, whether extracted or not, have a ‘value’.

The reduction in entitlements based on History of Extraction replaces the approach in the current water sharing plans which reduces entitlements ‘across-the-board’ with no consideration for levels of historical extraction.

The History of Extraction for your current licence will be calculated. This amount will then form the active, or extracted, portion of your licence.

The remainder of the licence will be the inactive, or the sleeping, portion of your licence.

The reduction to current entitlement will be made by weighting the active and inactive portions of your licence. Your local Catchment Management Authority will consult with licence holders on different relative weightings.

Secondly, financial assistance is available for licence holders to adjust to the changes. The NSW and Australian governments have made available up to $100 million for licence holders across the six major inland groundwater systems.