Amendments have been made to the River Murray Water Allocation Plan to facilitate the unbundling of water rights into separate instruments from 1 July 2009.

Water rights and approvals have previously been reflected on a single water licence. From 1 July 2009 for the River Murray area, rights and approvals are unbundled from the single licence and managed as four new and separated instruments:

• Water Access Entitlement - this is the ongoing right to a specified share of the water resource and is an asset that can be sold or transferred.
• Water Allocation - this is the right to take a specific volume of water for a given period of time, not exceeding 12 months, based on the volume of water available in that period. This is also an asset that can be sold or transferred.
• Water Resource Works Approval - this is a permission to take water, from a prescribed resource, at a particular point, in a particular manner.
• Site Use Approval - this is a permission to use water, taken from a prescribed resource, at a particular site in a particular manner.

There is no policy change attached to this reform. All existing rights and approvals are being transferred from the previous single licence into the new instrument that confirms a water licence holder’s rights and approved conditions for taking and using water from the River Murray.

Why have water classes been established?

Before 1 July 2009, the permanent water right has been reflected as a volumetric water allocation on your single licence - and Ministerial determinations have, if necessary, limited the actual volume that may be taken and used through restrictions that reflect the prevailing conditions.

In the new unbundled system, the permanent water right will be expressed as unit shares of water available to be allocated to a class of water access entitlements.  Each year, water licensees will obtain a share of the available water as a water allocation.  This share entitlement is a permanent right. The water allocation received will depend on seasonal water conditions.

It has been necessary to establish different classes of water access entitlement to reflect the different reliability and transferability attributes of the current water allocations. The translation of existing water allocations into unit shares (one unit share per kilolitre of water allocation) and their assignment to the different classes are designed to facilitate the existing policy approach that has been applied within the previous River Murray Water Allocation Plan and given effect through the Government’s drought policy.

South Australian River Murray licences are predominantly ‘high reliability’ - but there are some differences in how much water is assigned to them in drought circumstances, in extreme drought circumstances, in eligibility for carryover, and there are some transfer and use restrictions that apply in some circumstances. The classes have been established to reflect these differences.

The classes are not representative of any hierarchy by virtue of numerical order and do not explicitly define the reliability of each class (i.e. class 1 is not superior to class 2). However, it enables the Minister to determine a volume against each class, rather than through gazetted restrictions in volumes available to allocation holders.

Purpose of use (e.g. irrigation and stock and domestic) will no longer be expressed on the entitlement or allocation because within the unbundled water rights operating environment, purpose of use is, in general, not relevant for water management or licensing. Where purpose of use is a relevant water management consideration it will be associated with the site use approval.

This is because the water rights (entitlement and allocation) no longer attach to the land and may travel freely between holders rather than between land parcels. This is not to say that there are no restrictions on use. The same restrictions as applied in a bundled environment (such as water use efficiency, meter maintenance and salinity management) will be applied but these are expressed on the land-based site use or works approval.

There are two exceptions to this. Water allocations obtained on account of Class 8 water access entitlements continue to be restricted to be taken and used for environmental land management purposes and water allocations obtained on account of Class 9 water access entitlements continue to be restricted to be taken and used on wetlands.

The classes are required to recognise and differentiate between the different levels of reliability as currently applied, and particularly to support the continuation of the current restriction policies, where the impact on restricted use of water allocations depends on the purpose for which those allocations are to be used.

The relationship between classes and the former purpose of use is as follows:

The number of unit shares assigned to each class of water access entitlement is as shown below:

The Minister will determine the volume of water available to be allocated to each class of water access entitlements taking into account prevailing conditions. The maximum volume that can be assigned to a class of entitlement is one kilolitre per unit share.

There are just two exemptions to this:

• SA Water’s metropolitan licence will be translated to a Class 6 entitlement that will be eligible for more than one kilolitre per unit share to reflect the variability inherent in its rolling five-year total of 650 gigalitres for metropolitan Adelaide.
• Wetlands licences will be converted to a Class 9 entitlement that will also be eligible for more than one kilolitre per unit share, but only in times of above entitlement flow to South Australia, as set out in the water allocation plan.

During drought, the available volume is impacted and within the context of reduced water availability, the Minister will determine the volume of water available to be allocated to each class of water access entitlements in accordance with the Government’s allocation policy during drought periods.

Every unit share within a specific class is entitled to obtain an equal share of the volume made available for allocation to that class and the holder of the water licence will obtain their respective share as a water allocation. This will then be entered on each person’s water account.