The Commonwealth Government’s Off-farm Efficiency Program has made $1.54 billion in funding available for efficiency measures that contribute to additional water recovery for the environment above the Basin Plan’s 2,750 GL target without negative socio-economic impacts.

The Off-farm Efficiency Program is funded through the Water for the Environment Special Account and includes three components:

  • State Led Off-farm, with $1.33 billion available to Murray–Darling Basin states for delivery of eligible off-farm proposals.
  • Off-farm Efficiency Grants Program, with $150 million available through the Australian Government’s Business Grants Hub to deliver project proponents’ eligible off-farm proposals.
  • State Led On-farm, with $60 million available for Murray–Darling Basin state delivery of eligible on-farm proposals.

Victoria’s independent analysis of socio-economic impacts of the Basin Plan have shown that on-farm programs with entitlement transfer cannot be delivered without negative socio-economic impacts – particularly water market impacts and increased risk of stranded assets.

These findings are backed up by analysis from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). Find out more and read the reports.

For more information on the Commonwealth Government’s Off-farm Efficiency Program visit the Department of Agriculture, Water and the Environment’s website .

Developing socio-economically neutral or positive water efficiency projects

Water recovery projects can have flow-on impacts to regions, districts and the Basin – not just on participants. The socio-economic criteria mean that any project proposed to contribute to water recovery above the 2,750 GL need to show how market impacts and other flow-on impacts are mitigated.

The Victorian Government has established a process through which DEECA and partner agencies (e.g. Water Corporations and Catchment Management Authorities) work with proponents to develop water efficiency project proposals that comply with the agreed socio-economic criteria.

The diagram shows a simple three-stage process which includes: project development, community feedback and contractual arrangements. The first two stages are designated as the State’s responsibility and the last stage as the Commonwealth’s responsibility.

Victorian process for developing water efficiency projects.

The key steps of the process are:

  • Proponents (i.e. private business, water corporation or other public agencies) identify a water efficiency opportunity then contact DEECA to discuss it.
  • DEECA will provide high-level guidance on meeting the socio-economic criteria as part of project development.
  • Proponents work collaboratively with DEECA and relevant agencies to develop a project proposal/business case* that meets the socio-economic criteria.

*Major projects may seek funding for business case development from the Commonwealth.

Socio-economic assessment of water efficiency projects

Socio-economic assessment of all proposed Victorian water efficiency projects will be undertaken by the Victorian Government, prior to being submitted to the Commonwealth for funding.

The key elements of the socio-economic assessment are:

  • the validity of water savings
  • potential impacts on water prices
  • community and industry engagement
  • the future viability of proponent businesses and irrigation districts
  • expected socio-economic, environmental and cultural outcomes
  • third-party impacts on irrigation districts, water market, local communities, regions and Victoria
  • integrated implementation opportunities
  • improving resilience to climate variability and drought

About the assessment process

The state-led socio-economic assessment process includes a period of public comment. Public comment on efficiency measures is Basin-wide so you can have your say on all projects proposed throughout the Basin.

The key steps of the Victorian Government's assessment process are:

  • Proponents submit project proposals along with information about the project’s expected socio-economic outcomes to DEECA
  • DEECA reviews the information to ensure the requirements of socio-economic criteria are covered off on the before making the project available for public comment
  • If DEECA determines that additional socio-economic information is required prior to proceeding to public comment, proponents will determine how to proceed
  • Non-sensitive socio-economic information about the project will be published on Engage Victoria for public comment for a period of at least two weeks (10 business days)
  • DEECA will consider the feedback received and appropriate responses in consultation with the proponent. DEECA’s response to the feedback will be published online within 10 business days of the consultation period closing
  • If changes to the proposal are necessary to respond to community concerns, proponents will decide how to proceed
  • If no action is necessary, project proposals along with detailed information on how the project meets the requirements of the socio-economic criteria will be submitted by DEECA to the Victorian Water Minister for decision on compliance with the agreed criteria
  • Once approved by the Victorian Water Minister the project will be submitted to the Commonwealth for funding consideration with socio-economic information attached
  • The Commonwealth will then make funding approval decisions and contractual agreements.

To keep informed of upcoming Victorian project consultations sign up to Engage Victoria. For updates on all other Commonwealth Water Efficiency Program project consultations register with the Department of Agriculture’s ‘Have Your Say’.

Socio-economic assessments

Projects submitted to the Victorian Government for socio-economic assessment and the outcome of these assessments are recorded in the tables below:

Table 1. Projects that proceeded to public consultation and were approved

Type of projectLocation Water recovery Outcome of assessment
Off-farm GMID 15.9 GL Long Term Average Annual Yield (LTAAY) Proposal proceeded to public consultation on Engage Victoria website. Proposal determined to be compliant with the socio-economic criteria and submitted to the Australian Government for funding consideration. Information about the project and assessment are available on the Engage Victoria website.

Table 2. Projects that proceeded to public consultation and were not approved

Type of projectLocation Water recovery Outcome of assessment

Table 3. Projects that did not proceed to public consultation

Type of projectLocation Water recovery Outcome of assessment
On-farm GMID 2.25 GL HRWS Proposal returned to proponent. Proposal submitted to DEECA did not meet the requirements to proceed to public consultation.

For more information about socio-economic assessments of Victorian water efficiency projects visit the individual project webpages via the links below:

More information

To register your interest in developing a Victorian water efficiency project, or to submit a project for socio-economic assessment complete the inquiry form or contact us with details from the form via email at mdb.waterefficiency@delwp.vic.gov.au.

For more information on Victoria’s approach to additional water recovery, view our fact sheet using the links below:

Page last updated: 09/01/23