Despite probable multi-billion dollar implications, there is no requirement for forthcoming decisions about future water availability in the Murray-Darling Basin to consider or even estimate the socio-economic implications as part of the decision-making process.

A review of the legislative framework under which the Murray-Darling Basin Authority (MDBA) is preparing the Basin Plan, which will determine how much water is available for irrigation in the Murray-Darling Basin in the future highlights this issue.

Some idea of the scale of impacts of changes in water availability can be seen in economic modelling done by ABARE, assessing the impact of the first half of the Australian Government’s current water buyback program. On conservative assumptions it estimated that irrigation output would decline by an average of 2.4% per annum, although the impact would be almost double that amount in some valleys. Given that this analysis only involved half the proposed buy-backs, it means the total impact of the buybacks could be between $300 and $500 million per annum, even on conservative assumptions.

While the impact can't be determined down to the dollar, at the very least, the government should require that the MDBA make available a full socio-economic analysis of the implications of the forthcoming Basin Plan at the time of its initial release, so that the proposals contained in the plan can be subject to balanced analysis and discussion.

It is difficult to envisage any other government decisions of this magnitude that would proceed with such scant understanding of the potential economic and social impacts.

Do you believe the current process is sufficient?