New report confirms favourite foods rely on effective water regulation
Demand for water to grow some of Australia's favourite foods and products continues to drive up the value of water in NSW, a new report has found.
The report commissioned by the Natural Resources Access Regulator (NRAR) found the value of water entitlements in NSW increased by 17 per cent to an estimated $41 billion in just two years - underpinned by crops such as fruit, nuts, wine grapes, blueberries and cotton.
NRAR Chief Regulatory Officer Grant Barnes said the report highlighted the real value of water, and the need to manage and protect it by ensuring compliance with water laws.
“The new study expanded on the findings of NRAR's first value-of-water report in 2021-22, but this time we sought to also put a dollar value on town water and stock and domestic water as well,” Mr Barnes said.
“We now have the most comprehensive picture to date of what water entitlement is worth and the economic benefits that flow from its use," he said.
“On current trends, the value of water in NSW could reach $42 billion within five years.”
Mr Barnes said knowing the value of water to the state's economy and its many communities had implications for NRAR's compliance activities.
"This knowledge helps us to better understand the circumstances and motivations of water users, and to put our staff and efforts into areas where competition for water is greatest,” Mr Barnes said.
“Ensuring high levels of compliance helps protect all water supplies, including town water and stock and domestic supplies.
"Water has a significant monetary worth to the State’s economy and taking it unlawfully has a measurable economic impact on other water users.”
Among other key findings of the report were:
- Tradeable water entitlements (for irrigation and environment) are worth $25-$34 billion.
- Town water entitlements are worth $5.8 billion and underpin the whole NSW economy. Nearly 70 per cent is located along the coast.
- Domestic and stock entitlements are worth $0.8 billion and 80 per cent is in the southern inland zone.
- The most valuable water assets in NSW are located in the Southern Inland zone and the Murray and Murrumbidgee regions, worth more than $23 billion. This is an increase of 21 per cent on $19 billion estimated in 2021.
- Water entitlements support agricultural production value of $3.7 billion a year - and this is without counting the economic impacts of water used in industries such as mining.
- Water access leads to total direct and flow-on benefits of about $5.5 billion for regional economies from irrigated agricultural production.
Mr Barnes said the 2023 value-of-water report continued to highlight the importance of water management reforms such as non-urban metering and floodplain harvesting.
“Accurately accounting for water accessed in NSW is an enduring priority for NRAR,” Mr Barnes said.
“We are steadfast in our commitment to ensure all water taken in NSW is done in accordance with the rules for the benefit of all communities, the environment and the economy.”
The report was prepared by natural resource economics consultants Marsden Jacob Associates, who based their estimates on examination of 14,400 gigalitres of water entitlements.
