This version reflects content in the 2018 report.


3 water droplets infographic icon

Water sharing plans


now developed, covering all NSW water sources

River in valley amongst forest infographic icon

Environmental water share

2,482 GL

in 2016–17, a 50-fold increase from 10 years ago

Following high flows in most rivers during 2016–17, conditions have become drier. However, greater amounts of environmental water are now available and being directed to benefit the aquatic environment.

After three years of variability, NSW climatic conditions and surface water availability have now entered a significantly drier climate phase.

Water extraction and flow regulation alter river flows and continue to put pressure on the health of inland river systems.

Demand for the State’s water resources remains high, but this demand is being managed through water sharing plans. These plans balance equity of access and productivity for users, while maintaining aquatic ecosystem health.

Water sharing plans have been developed for all water sources in NSW, with a total of 58 water sharing plans commenced by the end of 2018.

The NSW Government’s cumulative holdings of environmental water total about 868,000 megalitres (ML) within regulated rivers and about 24,000ML in unregulated rivers. The Commonwealth Government has also recovered substantial volumes of environmental water in the Murray-Darling Basin in NSW with current holdings of about 1,545,000ML in regulated rivers and 46,000ML in unregulated rivers.

During the three years 2014–15 to 2016–17, significant volumes of environmental water were delivered to locations across inland NSW. Volumes ranged from about 506,000ML to 1,420,000ML a year. Substantial releases, averaging 157,000ML a year, have also been made to the Snowy River.

Related topics: River Health | Wetlands | Groundwater | 

Coastal, Estuarine and Marine Ecosystems


NSW Indicators

Indicator and status Environmental
Proportion of water extraction covered by water sharing plans
Good status meter
Stable ✔✔✔
Environmental share of available water
Moderate status meter
Getting better ✔✔


Terms and symbols used above are defined in How to use this report.


Water resources are critical for many human needs, including supplies for towns, household use, stock watering, crop irrigation, and mining and industry. Most of these needs are satisfied by water held in storage or extracted from rivers and groundwater.

Water resources are also vital to conserve the health of aquatic ecosystems in rivers, estuaries and wetlands. (See the River Health, Wetlands, and Coastal, Estuarine and Marine Ecosystems topics.)

An adequate supply of good quality water is vital:

  • for a healthy environment
  • to secure water resources for human use
  • to enable economic growth.

Water use planners must balance water supplies to meet social, economic, cultural and environmental needs. At the same time, they must account for long-term changes in water availability due to climate extremes, such as droughts and floods.

To address these needs, the NSW Government sets out rules in statutory water sharing plans (WSPs). These rules aim to protect water for the environment and provide security of entitlement for all water users. NSW has also committed to work with the Commonwealth Government to implement the Murray-Darling Basin Plan (MDBA 2011). The Basin Plan sets sustainable diversion limits (SDLs), for both surface water and groundwater sources. These determine how much water can be used in the basin and meet the needs of communities reliant on the basin's water, while making sufficient provision to protect the health of the aquatic environment and river and groundwater systems.

Surface water resources are explored in this topic; for groundwater resources, see the Groundwater topic.

Despite almost average rainfall in 2015, well above average temperatures contributed to overall dry conditions and low surface water availability in NSW.

For inland NSW, a dry start to 2016 was followed by a significantly wetter winter and early spring. This rainfall caused widespread and prolonged flooding across many inland areas.

On the coast, rainfall generally remained below average over the last three years (2015–17). An exception was in spring 2017 when tropical cyclone Debbie produced widespread flooding and wind on NSW’s north coast.

In 2017, dry conditions returned to NSW, with below average rainfall and elevated temperatures. These conditions generally continued statewide to create drought conditions in winter 2018.

The NSW Department of Industry website summarises water availability and allocations for each of NSW's major regulated river systems.

For inland NSW, nine water sharing plans cover the regulated river areas of:

  • NSW Murray and Lower Darling
  • Murrumbidgee
  • Lachlan
  • Belubula
  • Macquarie and Cudgegong
  • Namoi
  • Peel
  • Gwydir
  • NSW Border Rivers.

On the coast, four WSPs cover the regulated river areas of:

  • Bega and Brogo
  • Hunter
  • Paterson
  • Richmond.

The Department of Industry website also provides detailed reports on basins and catchments, including their climate, hydrology, environmental aspects, land use, water resources, regulating structures and water resource management.  

In NSW, the long-term average for annual water use is about 7,000 gigalitres (GL). However, the actual amount of water used each year varies considerably, depending on rainfall and flow conditions.

About 80% of this water comes from regulated rivers, where flows are controlled by large water storages operated by WaterNSW. Of the remainder, about 11% comes from groundwater (see the Groundwater topic), with the balance drawn from unregulated rivers. These estimates of water use include water licensed for consumption and for the environment.

Agriculture is the largest user of bulk water and also the most variable. Agriculture consumes an average of about 60% of total water used, but this ranges from about 70% when water availability is high, to around 45% when availability is low. (These percentages were calculated based on averages for the eight-year period 2008–16 using ABS data (ABS 2017)).

Bulk water for urban water and sewerage services, the second largest user, accounts for about 20% of total water used, on average. This includes water lost to evaporation and leakage during water delivery.  Households are large users, consuming about 10%, on average. Industries such as forestry, mining and manufacturing account for the remaining 10% of total water use.

Most water extracted in NSW comes from eight major regulated river valleys:

  • Murray
  • Murrumbidgee
  • Lachlan
  • Macquarie
  • Namoi
  • Gwydir
  • Border
  • Hunter.

Significant volumes of water are also extracted in sections of the Barwon-Darling River system, which is unregulated.

Runoff from the Snowy Mountains is captured and diverted to the Murray and Murrumbidgee rivers through the Snowy Mountains Scheme. This diverted water flow generates electricity and augments water availability in these inland valleys.

Water is also extracted from the Hawkesbury-Nepean River system. This water is used in agriculture for irrigation; by the tourism, fishing and oyster industries; for various recreational uses; and for urban use in the Greater Sydney metropolitan area. Diversions from the Shoalhaven River system supplement the Greater Sydney urban water supply and parts of southern Sydney are supplied from the Woronora River Catchment. Water sales to supply Greater Sydney were 516GL in 2015, 526GL in 2016 and 557GL in 2017 (Water NSW 2017). See also the

Urban Water Supply


Each year, water is allocated to licences in the regulated river valleys on 1 July, the beginning of each water year, and also periodically throughout the year. The quantity allocated reflects the water resources available and the security of the entitlement. The Department of Industry website details the various types of water access licences.

Water licensed for town supply, major utilities, and household and stock use has the highest security of supply. Other high-security licences also receive a high proportion of their water allocations in all but the driest years. These are typically licences for water to irrigate permanent plantings, such as orchards and vines, and for use by industries with a level of investment that warrants assured water supply.

Water allocated to general security licences varies more from year to year; it is mostly used to irrigate annual crops, such as cereals, rice, cotton and pastures. Rules of some water sharing plans permit unused allocations of general-security water to be carried over from year to year.

Water not allocated for extraction each year is considered to be environmental water. Other water is allocated specifically to the environment through the environmental flow rules of water sharing plans and environmental water licences.

Long-term modelling of river flows and extractions

Long-term modelling of river flows provides a basis to set long-term diversion limits for water sharing plans. These models are based on 120 years of historical climate and flow data. They simulate the flow behaviour of river systems, and the impact of water resource development on natural river flows.

The models provide a baseline and context against which to compare actual river flows each year. They generally show the proportion of water remaining for the environment is higher during wetter periods than drier periods. By contrast, when river flows are low, less water is available in total, and proportionally more of it is allocated for consumption. See the Department of Industry website for more on groundwater and surface water models.

Current river flows and extractions

Over the decade prior to 2010–11, water extractions gradually fell due to severe, extended drought conditions. Figure 16.1 shows how the quantity of water extracted from six regulated rivers rose sharply in 2010–11, as surface water availability increased due to widespread heavy rains. Extractions fell again during another dry period after 2013, before recovering in 2016–17. Yearly rainfall and river flows drive water availability, and directly affect the volumes extracted.

Figure 16.1: Water use by licensed users in major NSW regulated valleys, 1999–2000 to 2016–17

This chart is interactive - click on legend or hover over chart


Water use is licensed account usage, including general security, high security, conveyance, water utilities, domestic and stock, and supplementary access.

These use estimates include licensed water use for both consumptive and environmental purposes.

DoI Water data 2018

Figure 16.2 shows water extracted from each of five major NSW inland regulated river valleys (in terms of gigalitre quantity extracted, and as a proportion of the total available). It also shows estimates of water remaining in-stream for the environment. In wetter years (2010–11, 2011–12 and 2016–17), the graphs show how a higher percentage of water is typically retained in river systems (and available to the environment) than in drier years.

Environmental flows are protected under water sharing plans, which include rules for low flows. However, as Figure 16.2 shows, in median and dry years the relative proportion of available water used for consumptive purposes increases, even when actual water volume decreases. Under the Basin Plan (MDBA 2011), water recovery for the environment is likely to reduce this trend and produce closer to 50% of river flow for the environment in dry years in most inland regulated river valleys.

Figure 16.2a: Diversions and water remaining after extraction in the major NSW regulated valleys, 1999–2000 to 2016–17: Gwydir

This chart is interactive - click on legend or hover over chart


- Some ‘water remaining’ is lost to evaporation, seepage and other transmission losses. While in the system, this water has some benefit to the environment, depending on the duration, volume and timing of its flow.
- Water use figures are licensed account usage, including general security, high security, conveyance, water utilities, domestic and stock, and supplementary access. These use estimates include licensed water use for both consumptive and environmental purposes. Floodplain harvesting, which is not yet licensed and not included, further reduces the volume of water remaining in the charts. Diversions include licensed environmental water use as well.
- The data for each valley represents total water available and is taken from a representative gauging station downstream of major tributary inflows and upstream of major extractions.
- Total flow and observed diversions in the Murrumbidgee Valley are influenced by water released from the Snowy Mountains Scheme. In percentage terms the influence is greatest in dry years. Development in the valley reflects this inter-valley transfer.
- Wet, median and dry flow levels are sourced from long-term (120-year) hydrological modelling of conditions for water sharing plans.
- A dry year is based on the 80th percentile flow, that is in 80 years out of 100, flows will exceed this value. The median year is based on the 50th percentile flow, and a wet year uses the 20th percentile flow.

DoI Water 2018

Figure 16.2b: Diversions and water remaining after extraction in the major NSW regulated valleys, 1999–2000 to 2016–17: Namoi

This chart is interactive - click on legend or hover over chart


See the notes for Figure 16.2a

DoI Water 2018

Figure 16.2c: Diversions and water remaining after extraction in the major NSW regulated valleys, 1999–2000 to 2016–17: Macquarie

This chart is interactive - click on legend or hover over chart


See the notes for Figure 16.2a

DoI Water 2018

Figure 16.2d: Diversions and water remaining after extraction in the major NSW regulated valleys, 1999–2000 to 2016–17: Lachlan

This chart is interactive - click on legend or hover over chart


See the notes for Figure 16.2a

DoI Water 2018

Figure 16.2e: Diversions and water remaining after extraction in the major NSW regulated valleys, 1999–2000 to 2016–17: Murrumbidgee

This chart is interactive - click on legend or hover over chart


See the notes for Figure 16.2a

DoI Water 2018

Environmental water

To offset the impact of water extraction and structures that regulate river flows, and to maintain the health of natural systems and water sources, a share of the water resource is set aside for environmental purposes. The Water Management Act 2000 recognises and provides for two types of environmental water in water sharing plans for NSW's regulated rivers:

  • planned environmental water
  • licensed (or held) environmental water.

Planned environmental water is committed to the environment through rules in water sharing plans. The plans limit overall water extraction to ensure an agreed amount of water remains in the water source. The plans also apply specific environmental flow rules.

Planned environmental water rules are either:

  • fixed rules that prescribe ‘automatic’ actions to release water from storage, such as transparent and translucent releases, and limits on extraction
  • discretionary rules that set aside water into environmental water allowances, based on specified trigger conditions.

Environmental water managers can actively manage discretionary water by ordering releases from environmental water allowances. This gives managers the flexibility to determine when and how watering actions should occur, so they can optimise environmental outcomes.

In unregulated rivers, water sharing plans generally rely on rules that limit extraction of river flows to protect a share of water for the environment. In most cases, such rules set out an annual extraction limit and a low-flow cease-to-pump level. This threshold is intended to minimise impacts during low flows and protect water for basic ecosystem health and riparian water uses.

Licensed (or held) environmental water is committed to the environment through water access licences. Corresponding to ‘held water’ under Commonwealth legislation, it is often called held environmental water. It is generally purchased through entitlements of willing sellers or created through water savings. In the latter case, investment in projects or measures is used to yield more efficient water use, which can be converted into an equivalent licensed entitlement. Licensed environmental water is actively managed to achieve specific environmental outcomes. Often it is aggregated and used along with planned environmental water to make large-scale releases of water to the environment.

Environmental water holdings

Water recovery programs funded by the Commonwealth and NSW governments have purchased or recovered water for NSW’s environment. This licensed water contributes to the total environmental water holdings. The cumulative total for all NSW licensed environmental water is about 2,412,000ML for regulated rivers and about 70,000ML in unregulated rivers, 2,482,000ML in total.

Table 16.1 summarises the collective amount of water held by NSW from water recovery programs for seven river valleys or programs. Table 16.2 describes water holdings acquired by the Commonwealth Government for 11 river valleys in NSW.

Table 16.1: Cumulative holdings of held environmental water recovered by the NSW Government to 30 June 2018 by valley or program (ML entitlement)

Valley/Program Regulated River Licence Categories Total Regulated River Unregulated River
High security General security Supplementary allocation
Barwon-Darling - - - - 2,166
Gwydir 1,249 17,092 3,141 21,482 -
Lachlan 1,795 36,569 - 38,364 -
Macquarie - 48,419 1,451 49,870 2,916
Murray and Lower Darling 2,027 30,000 - 32,027 -
Murrumbidgee - 28,508 153,767 182,274 6,162
The Living Murray 5,623.5 187,938 350,000 543,561.5 12,965
Total 10,694.5 348,526 508,359 867,578.5 24,209


Note 1: Conveyance licence holdings for Murray and Murrumbidgee have been included in the general security totals. Murrumbidgee ‘supplementary allocation’ includes supplementary water (Lowbidgee) entitlement.

Note 2: The Living Murray holdings are part of a multi-jurisdictional program with licences held in the Murray, Murrumbidgee and Lower Darling rivers across a range of entitlement types.

DoI Water data 2018

Table 16.2: Cumulative holdings of environmental water recovered by the Commonwealth Government by valley as of 31 May 2018 (ML entitlement)

Valley Regulated River Licence Categories Total Regulated River Unregulated River
High security General security Supplementary allocation
Barwon-Darling - - - - 28,004
Border Rivers - 2,598 1,437 4,035 -
Gwydir 4,508 89,525 20,451 114,484 -
Lachlan 933 86,923 - 87,856 -
Lower Darling 3,075 21,564 - 24,639 -
Macquarie/Cudgegong - 126,224 8,292 134,516 -
Murray 17,858 400,500 211 418,569 184
Murrumbidgee 10,199 322,753 21,986 354,938 164
Murrumbidgee (Lowbidgee) - - 393,117 393,117
Namoi (Upper) and Peel - 12,404 - 1,257 11,147
Warrego - - - - 17,826
Total 36,573 1,062,491 445,494 1,544,558 46,178


Conveyance licence holdings for Murray and Murrumbidgee are included in the general security totals.

DEE 2018 DoI Water 2018

Figure 16.3 shows the growing volume of NSW environmental water shares. This growth is due to water licence purchases and the creation of new entitlements through water savings infrastructure projects.

Figure 16.3: Environmental water shares in NSW

Environmental water delivery

The amount of water available for release into the environment depends on annual allocations available for the different types of entitlement. Managers allocate the water according to the priority of these entitlements, while also considering seasonal water availability.

For supplementary flows and unregulated licences, full water allocation is made at the start of each year. However, this water can only be physically diverted if rivers have sufficient flow to allow access to the environments intended. In that sense access is weather-dependent – opportunistic and not guaranteed.

Table 16.3 shows how volumes of water released from storages of different regulated river valleys in inland NSW rose between 2014–15 and 2016–17. These numbers are for releases made through specific environmental allowances, or as a result of licensed environmental water. They do not include water made available to the environment through fixed rules in water sharing plans, such as prescribed end-of-system flows or transparent and translucent releases from storages.

The Snowy Water Initiative has further increased environmental flows each year to the Murray and Snowy rivers. This initiative aims to return 70GL to the Murray; and about 212GL to the Snowy River, or 21% of its long-term average annual flows (that is the level of flow prior to the Snowy Mountains Scheme). The initiative successfully released 148GL into the Snowy River in 2014–15, 142GL in 2015–16, 125GL in 2016–17, and 212GL in 2017–18. The 2017–18 water year was the first time the initiative reached its recovery target since its inception. More information.

Table 16.3: Environmental water delivered in inland rivers of NSW, 2014–15 to 2016–17 (ML)

Water source 2014–15 2015–16 201617
Border Rivers - - 5,940 - - -
Gwydir 29,895 56,639 4,750 8,500 21,000 25,847
Lachlan - 6,471 - 48,114 20,084 35,742
Macquarie 17,745 16,037 36,393 18,661 26,373 62,778
Murrumbidgee 73,068 222,756 103,613 124,282 158,592 371,792
Murray and Lower Darling 5,751 78,022 5,754 200,194 84,032 599,363
Namoi-Peel - - - - 4,933 9,109
Subtotal 126,459 379,925 156,450 399,751 315,014 1,104,631
Total environmental water 506,384 556,201 1,419,645


Excludes environmental water under water sharing plan fixed rules, such as end-of-system targets or automatic transparent and translucent releases.

EWAs: environmental water allowances.

HEW: held environmental water.

DoI Water data 2018

Through active management, about 556,000ML of environmental water was delivered to environmental assets in inland NSW valleys during 2015–16. The end of the 2016–17 water year marked the largest delivery year for the NSW Environmental Water Holder, the NSW Office of Environment and Heritage: a total of 54 deliveries of water for the environment. Together, the State, Commonwealth and The Living Murray accounts delivered a total of 1,420,000ML to the environment in 2016–17, with a range of ecological benefits.

In 2016–17, the NSW Office of Environment and Heritage managed delivery of more than 680,000ML of water in the Murray and Lower Darling catchments alone. These strategic environmental flows made it possible for native fish, including golden perch and Murray cod, to move from the Barwon-Darling and Menindee Lakes system into the Murray River. Subsequent releases across the Southern-connected Basin attracted native fish from the lower into the central Murray River system.

In 2016–17, a record 530,000ML was delivered to rivers and wetlands in the Murrumbidgee catchment. These environmental flows supplemented natural flooding, improved habitat and supported breeding of native birds, fish and frogs. One site recorded 6,000 pelican nests.

See the Wetlands topic.



Because droughts are a natural feature of Australia’s climate, aquatic ecosystems are adapted to periods of dryness. However, extensive or prolonged drought can have major repercussions for all water users and the environment.

Water extraction

When water extraction levels are high relative to total river flow, and of extended duration, river health is stressed. Before the Murray-Darling Basin Plan (MDBA 2011) commenced, the total volume of water extracted from the basin’s rivers had affected aquatic ecosystem health.

The Water Act 2007 (Cwth) provided for the Basin Plan, with its strategy to restore water diversion to within sustainable levels and safeguard the long-term health of rivers and water-dependent ecosystems. The Basin Plan requires a long-term average annual volume of 2,750GL to be recovered and returned to the environment.

River regulation

Structures to store and regulate water are built to increase security of supply. However, their use can also moderate the natural variability of streamflows. This is because these structures can capture and reduce large natural flows and release stored water during naturally dry periods. By regulating rivers, these structures:

  • modify natural river flow regimes
  • reduce flow variability
  • change the seasonality of flows
  • change river morphology.

However, aquatic ecosystems, particularly around inland Australian rivers, are adapted to highly variable flow levels. Aquatic species may even depend on this variability to maintain or complete their life cycles. Changes to natural river flow patterns have, over the longer term, contributed to biodiversity loss and declining health in aquatic ecosystems (NSW OEH 2013).

With a much larger portfolio of environmental water now being actively managed, this water can be used to overcome some of these adverse impacts of river regulation, particularly as scientific knowledge in this area continues to grow.

Climate change

Water management across NSW relies on a picture of long-term water availability based on climate data collected since the late 19th century. There is some confidence these arrangements adequately address near-term climate change risks to water security for economic use and environmental flows. However, to ensure plans are resilient in the medium to long term, further analysis will probably be needed. Challenges include representing the increasing natural variability in water supply more completely and simulating future water availability under a range of potential climate change scenarios.

Approaches to incorporate climate change risk are being developed. These use a decision framework that:

  • better accommodates increased natural variability
  • incorporates changes and outcomes for which there is confidence
  • assesses the resilience of existing planning arrangements to such potential changes
  • tests alternative arrangements to improve water-related outcomes.

Water pollution

Water quality affects its suitability for human use and the health of aquatic ecosystems. A river catchment’s vegetation cover and land management practices significantly affect its water quality. Local, naturally occurring features, such as saltwater intrusion, also play a part. The River Health topic covers river water quality, the effects of catchment disturbance, and diffuse runoff from agricultural activities and urban expansion.


Legislation and policies

Legislative and policy changes, along with a range of intergovernmental agreements, have made significant progress to enhance the settings for water management in NSW.

Water Reform Action Plan

In December 2017, the NSW Government announced the Water Reform Action Plan. This plan is a response to recommendations by compliance reviews, including those of the Matthews Investigation, the Murray-Darling Basin Water Compliance Review and the NSW Ombudsman. The plan’s ambitious water reform program aims to improve compliance and enforcement, increase transparency of water use, and bring about better environmental water management in NSW.

In April 2018, a new independent regulator commenced oversight of the compliance and enforcement of NSW’s water law. Called the Natural Resources Access Regulator (NRAR), it aims to act independently as a firm but fair regulator to improve public confidence in water compliance and enforcement. To strengthen joint compliance in the Murray-Darling Basin, NRAR has signed a memorandum of understanding on compliance cooperation with the Murray-Darling Basin Authority.

Other progress under the Water Reform Action Plan includes new policy positions designed to implement the changes required under the plan. The NSW Government is finalising these draft policies, which include a more robust metering network, increased transparency in water management and better management of environmental water, especially in the northern Murray-Darling Basin.

In March and April 2018, road shows throughout key regional areas ensured communities could comment and have input into this water reform policy development. More actions under the Water Reform Action Plan will continue during 2019.

The Water Management Amendment Bill

The recently passed Water Management Amendment Bill 2018 amends the Water Management Act 2000 to ensure it complies with the Water Act 2007 (Cwth) and the Murray-Darling Basin Plan (MDBA 2011).

National Water Initiative

The National Water Initiative (NWI) commits NSW to sustainable use of its water resources. To achieve environmental outcomes, it facilitates expanded trade in water resources to promote the highest-value water uses and the most cost-effective and flexible mechanisms of water recovery.

After the National Water Commission was abolished in June 2015, the Productivity Commission assumed the role of tracking progress towards NWI objectives; this includes an evaluation every three years. The most recent evaluation, the National Water Reform Inquiry Report (Productivity Commission 2017a, 2017b) found generally good progress on NWI implementation. The Productivity Commission reported that water reforms have delivered substantial benefits to water users and the broader community. It also provided recommendations on further work and reform priorities.

Murray-Darling Basin Plan

A fundamental role of the Murray-Darling Basin Authority is to oversee implementation of the Basin Plan (MDBA 2011), scheduled for completion in 2024. This plan is a Commonwealth legislative instrument that sets sustainable diversion limits (SDLs) for both surface and groundwater use in the Murray-Darling Basin, with a target to recover an additional 2,750GL of water to return to the environment. The Commonwealth has committed to bridge the gap to the lower SDLs required by the Basin Plan target by investing in water recovery; these lower SDLs must be met by 2019.

A water recovery program has commenced across the basin, including buy-backs and water savings initiatives. So far, more than 2,100GL of water (about 75% of the 2,750GL target) has been recovered. NSW’s share of this target is 1,312GL, of which 950GL has been recovered.

As part of the Basin Plan’s mechanism to adjust SDLs, the Commonwealth Government has approved a package of projects, developed by NSW, to deliver environmental outcomes using less water.

Floodplain Harvesting Policy

In floodplain harvesting, water flowing across floodplains is collected or diverted. Floodplain harvesting works and water extractions fall under the scope of the Water Management Act 2000. However, historically these diversions have not been considered extractions because they are yet to be licensed.

The NSW Government's Floodplain Harvesting Policy, introduced in 2013, signalled important reform in floodplain water management. The policy provides a framework to license and actively manage floodplain harvesting extractions within the long-term average annual extraction limits of water sharing plans. The policy applies across NSW.  Work to implement it, as part of the broader NSW healthy floodplains project, is well underway in the five northern valleys where floodplain harvesting is most prevalent:

  • Border Rivers
  • Gwydir
  • Namoi
  • Barwon–Darling
  • Macquarie.

Planning assumptions

In 2015, State and Commonwealth ministers from the Murray-Darling Basin initiated a process to set out the key planning assumptions they will use to develop their water resource plans under the Basin Plan. In early 2018, NSW and the Murray-Darling Basin Authority agreed on a range of planning assumptions to underpin NSW water resource plans.

Managers use these planning assumptions when they determine how much water to divert under water resource plans. The assumptions inform assessments of whether such plans comply with SDLs, and therefore comply with the Basin Plan.  

Extreme events policy

Extreme events with particular relevance for water management are times of severe water shortage (drought), or times when the quality of available water renders it unfit for use. NSW has developed a new policy to manage water during extreme events. The policy’s principles and processes apply in the lead-up to or during an extreme event. They are underpinned by incident response guides for each water source. These propose a suite of management options to give effect to access priorities in the Water Management Act and the Murray-Darling Basin Plan. This policy does not extend to flood management, which falls under separate policy and regulatory frameworks.

Plantations policy

NSW is developing a new policy to manage interception of water by forestry plantations. At their current levels of development and growth, forestry plantations pose negligible risk to water sources. However, the policy includes a process to establish formal growth triggers, at which stage water managers would need to intervene. The policy outlines work to scope the legislative amendments required, and how to bring forestry plantations within the NSW water licensing system should thresholds of growth be exceeded. 

Water trading

Water markets help to ensure scarce water resources are efficiently re-distributed. Markets have proven crucial in times of shortage when there is not enough water for all farms to produce a viable crop. With trade, some farmers can buy sufficient water for their crop, while others receive cash flows to support their economic survival.  

Water markets also provide incentives to use this resource efficiently; they tend to shift water use towards activities with higher economic returns. Water markets allow users, including environmental water managers, to flexibly adapt to changing conditions and manage risk, making these markets an important management tool.

The Water Management Act 2000 and water sharing plans enable water trading. The plans establish rules to ensure efficient trade can occur, while also protecting the environment and avoiding impacts to non-trading water users (third-party impacts). Trade has grown substantially from modest levels in 2004 when most water sharing plans were enacted, to annual peaks of over 100GL of (permanent) entitlement trade and several hundred gigalitres of (temporary) allocation trade.


Water sharing plans

Water sharing plans significantly improve water resource management in NSW. They can apply to rivers, groundwater or a combination of water sources (see the


topic). As statutory plans, they provide a legislative basis to share water between the environment and extractive users. Over their 10-year lifespan, they bring certainty to both the environment and water users. They also provide the basis for trading water licences and water allocations.

These plans aim to:

  • protect the fundamental health of the water source
  • ensure sustainable use of the water source over the longer term
  • provide water users with long-term certainty about access rules.

Extraction limits in water sharing plans ensure a proportion of the water available is protected for the health of the water source. Explicit environmental flow rules also ensure environmental outcomes are delivered.

Since 2004, water sharing plans have been progressively implemented across NSW. By the end of 2018, a total of 58 plans had commenced, covering all water used in the State.

Floodplain management plans

Prepared under the Water Management Act 2000, floodplain management plans help implement the NSW healthy floodplains project. They provide a whole-of-valley framework to assess and determine flood work applications.

The Department of Industry partners with the Office of Environment and Heritage to prepare these plans. Gwydir and Barwon-Darling floodplain management plans are now complete; Upper Namoi, Lower Namoi, Border Rivers and Macquarie valley floodplain management plans are being prepared.

As statutory plans, they must address risks to life and property from flooding. Some features on floodplains with ecological and cultural significance depend on flooding. These plans must also provide connectivity to and from these flood-dependent assets on the floodplain.

Twenty local floodplain management plans already in force were prepared under the Water Act 1912 (NSW) and Water Management Act 2000. These local plans will be superseded by the whole-of valley plans in the Gwydir, Barwon-Darling, Upper Namoi, Lower Namoi, Border Rivers and Macquarie valleys prepared under the NSW healthy floodplains project.

Environmental water recovery

NSW and the Commonwealth programs have recovered substantial volumes of water for the environment. The Commonwealth will continue this recovery to achieve the Basin Plan’s sustainable diversion limits. The Basin Plan’s initial water recovery target is a long-term average of 2,750GL per year. As at 31 May 2018 the Commonwealth Environmental Water Office held 2,697GL of entitlement across the basin; expressed as a long-term average, this amounts to 1,852GL of the 2,750GL target (Commonwealth Government 2018), or around 67% of the target.

Future opportunities

Water resource plans

The Murray–Darling Basin covers almost all of inland NSW and the Basin Plan requires the development of water resource plans for both surface water and groundwater sources. NSW is responsible for 20 of the 33 water resource plans required across the entire Basin. NSW continues to invest substantial effort in this water planning, working collaboratively with the Murray-Darling Basin Authority.

Each plan will have:

  • the relevant state water sharing plan
  • a long-term environmental water plan
  • a risk assessment
  • a water quality management plan
  • an incident response guide to deal with periods of drought and poor water quality.

The water resource plans will also demonstrate how to assess and maintain compliance with the sustainable diversion limit, as prescribed in the Basin Plan. The plans will take into account Aboriginal people’s water-dependent cultural values and uses.

Those developing water resource plans have consulted extensively with a range of stakeholders, including nation-by-nation consultation with First Nations of inland NSW.

Sustainable diversion limit adjustment mechanism

By 2015 the Commonwealth Government had invested more than $5 billion to achieve 71% of the 2,750GL target for environmental water recovery required under the Murray-Darling Basin Plan. Just under half of this spend was for purchasing water licences; the remainder was spent on more efficient infrastructure projects.

Remaining Commonwealth Government investment will prioritise more efficient infrastructure, to bridge the remaining gap between current water use and the sustainable diversion limits (SDLs) required to meet the target. A mechanism to adjust SDLs aims to ensure all water is used efficiently, to its full effect. This sustainable diversion limit adjustment mechanism achieves this through:

  • supply measures – projects that achieve the Basin Plan’s environmental outcomes with less water, thereby reducing the volume of water that needs to be recovered
  • efficiency measures – projects that increase the efficiency of water delivery systems for irrigation, so more water may be recovered for the environment
  • constraints measures – projects that make environmental water delivery more effective in the future.

The Commonwealth Government has approved a package of projects developed by NSW (and other Murray-Darling Basin states), as part of the Basin Plan’s sustainable diversion limit adjustment mechanism. These projects are designed to allow NSW to deliver the required environmental outcomes using less water, allowing valuable water to stay in productive use. NSW’s work with our communities to design and deliver these projects will continue, including in-depth consultation and detailed environmental assessments.

Northern Basin Review

The Northern Basin Review is an integral part of the Murray-Darling Basin Plan. This two-year review entailed wide-ranging stakeholder engagement to ensure all perspectives were captured and understood. It also included recommendations to implement a range of toolkit measures designed to improve water management and deliver positive outcomes for the environment and communities in northern NSW.


References for Water Resources

ABS 2017, Water Account Australia 2015–16, catalogue no. 4610.0, Data Cubes spreadsheet downloads for Physical Water Supply and Use by Water Type New South Wales (2008/09 to 2015/16), Australian Bureau of Statistics, Canberra [[email protected]/mf/4610.0]

DEE 2018, Environmental Water Holdings, Commonwealth Department of the Environment and Energy, Canberra []

DoI 2017, Securing our water: NSW Government water reform action plan, December 2017, Department of Industry [ (PDF 0.8MB)]

DoI Water 2018, Environmental Water Register, Department of Industry – Water, Sydney []

Matthews K 2017, Independent investigation into NSW water management and compliance: Final report, final report by Ken Matthews AO, NSW Department of Industry, December 2017, Sydney [ (PDF 0.5MB)]

MDBA 2011, Plain English summary of the proposed Basin Plan – including explanatory notes, Publication no. 173/11, November 2011, Murray-Darling Basin Authority, Canberra [ (PDF 5.8MB)]

MDBA 2017, The Murray-Darling Basin Water Compliance Review, Publication no. 44/17, November 2017, Murray-Darling Basin Authority, Canberra [ (PDF 1.2MB)]

NOW 2013, NSW Floodplain Harvesting Policy, NSW Department of Primary Industries, NSW Office of Water, Sydney []

NSW Ombudsman 2017, Investigation into water compliance and enforcement 2007–17, November 2017, NSW Ombudsman, Sydney [ (PDF 0.6MB)]

NSW Ombudsman 2018, Correcting the Record: Investigation into Water Compliance and Enforcement 2007–17, March 2018, NSW Ombudsman, Sydney [ (PDF 0.3MB)]

OEH 2013, Alterations to the natural flow regimes of rivers, streams, floodplains and wetlands: Key threatening process listing NSW Scientific Committee – Final determination, Office of Environment & Heritage []

OEH 2018, Current water holdings, Office of Environment & Heritage []

Productivity Commission 2017a, National Water Reform, Productivity Commission Inquiry Report, Report no. 87, 19 December 2017, Productivity Commission, Canberra [ (PDF 3.9MB)]

Productivity Commission 2017b, National Water Reform, Productivity Commission Inquiry Report Overview and Recommendations, Report no. 87, 19 December 2017, Productivity Commission, Canberra [ (PDF 0.4MB)]

Water NSW 2017, Annual Report 2016–17, Water NSW, Sydney [ (PDF 2.9MB)]