WATER POLITICS

A new report, released by the Australian Tax Office (ATO), will show that foreign ownership of water increased by 0.3 per cent in the year to June 2022.

It shows that Canada holds 2.1 per cent of all Australian water entitlements, the USA 1.8 per cent, with China and the United Kingdom each holding 0.8 per cent.

The top four countries remain unchanged from the ATO’s previous reporting in June 2021.

When water entitlements are owned by foreign investors, the water is typically used to grow food, or in mining operations, in Australia. It can also be traded to other water users.

According to the ATO, across the country a total of 4,503 gigalitres (GL) of water is now foreign-owned. That equates to 11.3 per cent of water entitlements issued across Australia.

More than half the overseas-owned water, or 2,320 GL, is held in Australia’s largest river network the Murray-Darling Basin.

The largest foreign-owner of Australian water is understood to be the Canadian government-owned Public Sector Pension Investment Board (PSP Investments), a pension fund for Canada’s armed forces, mounted police and other public servants.

Federal Water Minister Tanya Plibersek is seeking to amend the Water Act and will use the ATO report to argue in favour of allowing the Australian government to purchase irrigation entitlements in the Murray-Darling Basin.

Ms Plibersek wants the Commonwealth to be permitted to buy widespread irrigation entitlements from across the Murray-Darling Basin to boost the environment, a move that could cost billions of dollars.

Under Ms Plibersek’s proposal, water licences that have previously been used for farming, would instead be used for environmental flows to promote habitat for native flora and fauna.

“Of course, Labor supports foreign investment but that is in our national interest, but we believe the Australian government should be able to buy water for the environment too,” Ms Plibersek said.

During the past decade, more than 2,100 GL of water has been allocated to the environment in the Murray-Darling Basin, most of it from farming.

But another 750GL was promised for the environment by June 2024, as part of the Murray-Darling Basin plan.

The federal opposition, Victoria and New South Wales have opposed Commonwealth buybacks, arguing they leave regional communities worse-off.

Ms Plibersek is expected to introduce her proposed legislation when parliament resumes next week.

It will also include amendments to the laws guiding how water is traded, based on recommendations from a 2021 report by Australian Competition Consumer Commission.

Ms Plibersek said the changes would bring “trust and transparency to water markets”.

“It will crack down on bad faith operators in the system and make sure it’s a level playing field for those doing the right thing,” Ms Plibersek said.

The Coalition, which commissioned the ACCC study when in government, has previously supported reform to the $2 billion water market – however, it is vehemently opposed to using more Commonwealth water buybacks to meet environmental water savings targets in the Murray-Darling Basin.

The Greens favour water buybacks, but do not support extensions to the Murray-Darling Basin plan, which is also expected to be part of the proposed legislation.