Victoria's approach

Victoria’s approach has always been to meet Basin Plan commitments while minimising socio-economic impacts by reducing the impact to the consumptive pool available to water users. Victoria also aims to maximise the environmental outcomes that are achieved with the water available to environmental water holders.

Victoria has been monitoring the socio-economic impacts of the Basin Plan and is continuing to build an understanding of the nature and extent of these impacts, particularly in the southern Basin.

Victoria’s report: Social and Economic Impacts of the Basin Plan

The Victorian Government commissioned an independent social and economic analysis to understand how irrigators and communities across the southern connected basin have been impacted by the Murray Darling Basin Plan.

Read the report:

Social and economic impacts of the Basin Plan in Victoria (PDF, 8.8 MB). Accessible version (DOCX, 5.8 MB)

Fact sheet (PDF, 384.7 KB). Accessible version (DOCX, 177.9 KB)

Report highlights

The report found:

  • The dairy industry in Victoria is now more exposed to the water market and heavily reliant on the allocation market. The dairy sector will be the first group to be exposed to the risk of rising allocation prices.
  • The horticulture sector in Victoria has purchased large amounts of Victorian High Reliability Water Shares, now laying claim to more than 40%. If allocations drop below 40% there will not be enough water to supply industries across Victoria, New South Wales and South Australia.
  • Victorian High Reliability Water Shares have been disproportionately targeted by the Commonwealth in the past. This has increased Victoria's risk in dry years, as the entitlement market helps to lessen the impact of drought in Victoria.
  • Reduced water availability may impact future tariffs and system infrastructure requirements.
  • Irrigators who participated in Commonwealth buybacks previously are now much more reliant on allocation purchases: from 0% to 12% on the allocation market prior to participation, to 26% to 52% after participation.

Socio-economic criteria for additional water recovery

The Victorian Government, after consultation with key Victorian stakeholders and communities, developed and published a position (October 2018) on socio-economic criteria to ensure that projects for additional water recovery above the 2,750 GL target do not create adverse socio-economic impacts. This is in line with the requirements of the Basin Plan

Download Victoria’s Criteria to Benefit Basin Communities.

Socio-economic impacts in the southern Murray Darling Basin - Implications for additional Basin Plan water recovery
(PDF, 1.5 MB)

At the Murray-Darling Basin Ministerial Council meeting in December 2018, Victoria secured agreement on socio-economic criteria to ensure that any additional water recovery above the Basin Plan’s 2,750 GL target must only occur with neutral or positive socioeconomic outcomes for communities.

December 2018 Ministerial Council meeting communique

Socio-economic criteria for additional water recovery.

Further reading

There are several studies about the socio-economic impacts of the Basin Plan:

MDBA Community profiles

Basin Plan – GMID socio-economic impact assessment (RMCG)

ABARES Insights: Analysis of water recovery in the Murray-Darling Basin (PDF, 769.6 KB)

Southern Murray-Darling Basin water markets - Recent trends and drivers

Page last updated: 30/11/21