The federal government has announced it will start a new round of water buybacks to help it achieve a key target under the $13 billion Murray-Darling Basin Plan.

Buybacks were limited by the former Coalition government in 2015 amid growing complaints from farmers.

Water Minister Tanya Plibersek has told 7.30 her government will strategically purchase water in six catchments across Queensland and New South Wales through an open, competitive and transparent tender.

"We are prepared to purchase water to fulfil the Murray-Darling Basin Plan and we are actually opening up water purchasing now for that 49 gigalitres of water," she told 7.30. 

"Irrigators have been approaching us since we came into government saying that they've got water entitlements that they would like to sell to the Commonwealth to return for environmental flows."

The new round of buybacks will help achieve what's known as the 'bridging the gap' water target — which is the return of 2,075 gigalitres in flows each year for the environment.

But it's another key part of the basin plan that's causing tension between South Australia and Victoria and NSW.

An extra 450 gigalitres are meant to flow downstream each year starting mid-next year, but South Australia's Water Minister Susan Close said only five gigalitres had been recovered so far.

"South Australia only signed up to the Murray-Darling Basin Plan, when the 450 gigalitres was added to it," she told 7.30. 

"It's not discretionary. It's not a choice.

"The fact that the 450 gigalitres is very unlikely to come by the due date of 2024 is both devastating and unsurprising."

Ahead of a key meeting with state water ministers this Friday, Ms Plibersek said no decision had been made but buybacks would be contemplated to achieve the 450 gigalitres target too.

"What we've seen in the last nine years is a real go-slow," she told 7.30.

"Having environmental water to release when the environment's under pressure makes all the difference. It's what's protecting our native fish and our native birds.

"If I have to achieve the objectives of the Murray-Darling Basin Plan with the largest share of buybacks, then so be it." 

Impacts on industry

The prospect of new buybacks fills upstream irrigators with dread.

New South Wales Irrigators' Council CEO Claire Miller said previous water buybacks had hurt farmers, including those in the dairy industry and rice growers.

"If the government decides that it's going to buy back that water from farmers and make that pool of water that's available to grow food and fibre even smaller than it is now, then it really needs to start deciding which communities it wants to knock out altogether," she said.

Ms Miller said many irrigators who sold water to the government a decade ago were forced to because of financial pressures as a consequence of the millennium drought.

"This idea that it was willing sellers, most were under extreme duress, because of those conditions then in the drought, and that's come back to bite a lot of them who stayed in production because now they have to rely on a volatile water market to get their water, and that's a water market with less water than there was before," she told 7.30.

Deniliquin dairy farmer Brett Napier is one irrigator who sold 800 megalitres of water to the government in 2010. It's a choice he never wants to make again.

"During that time, we had a big milk price crash, we had zero per cent water allocation," he told 7.30.

"We made that decision to stay in the dairy industry."

He said dairy farmers struggle to compete against horticultural growers if they need to buy water.

"If the extra 450 [gigalitres through buybacks] goes ahead, it's going to shrink that pool of water available to irrigators even more, which in turn is going to push up the price and make things extremely difficult when we hit another dry time, which will be around the corner," he said. 

Ms Plibersek said she understood the concerns from irrigators but the 450 gigalitres target was agreed to by basin states in 2012 and was essential to keep the river system sustainable.

"I don't at all disregard what the irrigators are saying … what I also know is that there is progressively less water available in the Murray-Darling Basin system because we're facing the impacts of climate change," she said. 

"Delivering on the Murray-Darling Basin Plan is a really critical part of future-proofing our agriculture sector, and our regional communities."

The recovery of the extra 450 gigalitres in flows is contingent on it causing no economic harm to communities. Victoria's Water Minister Harriet Shing said there was no binding agreement to return the full amount.

Her government commissioned a report which has warned that if buybacks are used to achieve the 450 gigalitres extra flow for the environment, it could lead to more than $500 million in lost agricultural production in the southern basin each year.

"The Victorian government opposes buybacks," she said. 

"We've got large numbers of dairy farmers, dairy processors and primary producers in the north of the state … we do need to make sure that we have that certainty and security of volume of water and supply into the future."

Ms Plibersek said she had seen the report commissioned by the Victorian government but wasn't sure she agreed with its predictions.

"I think what we see from Victoria and NSW is something of a resistance to achieving the full Murray-Darling Basin Plan. And I say to state governments, that these are targets that have been agreed by the states and territories in the past, we don't have an option now to walk away from those targets," she said.

Push for funding for water efficiency projects

Murrumbidgee Irrigation CEO Brett Jones said farmers want the federal government to continue funding water efficiency projects to recover the 450 gigalitres for the environment.

His company has recently benefited from $126 million in federal funding to automate its operations and upgrade water channels.

"We've actually lined the whole channel and that reduces the seepage and losses while we're trying to transport water through the system," he said. 

"We believe the investment in infrastructure is so important because you're actually doing works that save otherwise water that's lost."

The project will save about six gigalitres a year but ecologist Richard Kingsford argues it's a small water saving for the environment at a high cost to taxpayers.

"At the moment, we've been on a path of, you know, five or six years, maybe more, to try and build more efficient ways of getting that water and it's been very costly to the taxpayer," he said.

Mr Jones has defended the project's cost — which equates to around $20,000 a megalitre.

"The key is that it's keeping people in jobs," he said. 

"If you really look at the whole life cycle, and the real value of that investment, spending two, three, four or five times the actual value of the water, and investing in this great country is heaps better than the alternative, which is ripping the guts out of communities."

Having tracked waterbird numbers across the Murray-Darling Basin for decades, Mr Kingsford said it was crucial the 450 gigalitres be delivered in full. Floods have been a welcome boost in recent months, but waterbird numbers have been declining over the past 40 years. He supports buying more water from irrigators.

"I think it's critical that that extra water is put into the system and not just for South Australia, there are really important wetlands and floodplains upstream.

"Buyback does seem like the only option we've got."

In a statement, NSW Water Minister Kevin Anderson said he did not support buybacks to achieve the extra 450 gigalitres of flows. He has called for more time and flexibility to achieve the basin plan — which includes delivering on state infrastructure projects.

"NSW will strongly argue that any further water recovery must be prioritised through investment in water infrastructure rather than buybacks and will be using this at the upcoming Ministerial Council meeting [this Friday] to fight for the interests of NSW communities," he said.

In a statement, the Murray-Darling Basin Authority said that plan needed to be fully implemented to achieve a healthy and sustainable basin and the extra 450 gigalitres has always been an important part of that.

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