Author(s)

L. Crase & S. O’Keefe

Abstract

The formulation of Australian water policy continues to be one of the most politically vexing areas of public policy. The pressing need for a national policy response stems from a variety of sources, including increasing scarcity, evidence of climate change, jurisdictional ranging amongst states and a history of generous allocations to agriculture that are now proving unsustainable. Collectively, these forces have promoted a policy stance that embodies serious contradictions. On the one hand substantial public investments are being made to upgrade irrigation infrastructure on the grounds that this will ‘save’ water that can then be allocated to satisfy environmental demands. On the other hand, governments have been actively repurchasing water rights, in the hope of striking a better balance in severely stressed systems, such as the Murray-Darling Basin. This paper traces the contradictions in this policy approach and argues that greater emphasis on the market purchase of water rights would give rise to a more efficacious outcome. Keywords: water policy, water rights, market based instruments, irrigation. 1 Introduction Until the late twentieth century, Australian governments, like many other administrations, viewed the development of water resources as a priority and saw the resource itself as a source of national prosperity [1]. Accordingly, generous allocation of water, particularly for agricultural pursuits, was seen as a precondition to food security, increasing national product and achieving social cohesion via the development of a noble yeomanry [2]. However, achieving these objectives against the backdrop of Australia’s hydrology and climate proved particularly challenging. In simple terms, the variability of Australian

Keywords

water policy, water rights, market based instruments, irrigation