Report values NSW water access licences at $29 billion

A new report has estimated the market value of the state's water access licences at $29 billion and rising.

The report commissioned by the Natural Resources Access Regulator (NRAR) found that the value of water entitlements has been increasing and if this continues would exceed $30 billion in the not-too-distant future.

It is the first time the independent regulator has put a dollar value on access to water resources, with important implications for how NSW water law is managed and enforced in the future.

NRAR Director Regulatory Capability and Coordination Tim Gilbert said the findings highlighted both the real value of water access and the importance of the non-urban water metering reforms which are currently being rolled out across the state.

"Putting a value on water means water-users can compare the cost of installing a meter with the value of the water itself and see clearly that an accurately metered system is a vital investment for their business," Mr Gilbert said.

"Water has a significant monetary worth and taking it unlawfully has a measurable economic impact on other water users.

"It's easier for various stakeholders to understand the critical role of NRAR in compliance and enforcement of rules when they can see the high value of water resources," he said.

“Given the value of production and the increasing demand for water access, metering reforms are vital to underpin the efficiency, effectiveness and equity of the system.”

The report also underscored how crucial water entitlements are to regional communities.

It estimated irrigated agricultural production in New South Wales to be worth between $3-4 billion a year, with vital flow-on economic benefits for regional economies worth an estimated further $1.75 billion annually.

Among other key findings of the report were:

• The rising value of water entitlements is being driven by increasing demand from horticulture (fruits and nuts) and viticulture (grapes), from cotton production, and from high value crop production, like blueberries.
• The most valuable water assets are in the southern inland zone of NSW (including the Murray and Murrumbidgee regions), where the value of water entitlements is estimated to be more than $19 billion.
• Water entitlements are delivering significant value to the NSW economy through irrigated agriculture production, averaging between $2.45 and $3.5 billion per year.
• Water access licences support other benefits not measured in the report's valuation such as environmental outcomes, cultural outcomes for First Nations people, economic and social outcomes for recreational and commercial fishing (worth about $3.4 billion a year) and tourism.

The report's analysis focused on water entitlements subject to the NSW non-urban water meter reforms that are currently being introduced. Under these reforms, water take must be measured by meters that are accurate, tamper-proof, and auditable.

Report authors, natural resource economics consultants Marsden Jacob Associates, found that there are 32,478 water entitlements in NSW which are subject to the metering reforms. They calculated that, together, the volume of water involved is more than 12,600 gigalitres. That equates to more than 25 Sydney Harbours.

Read more about the metering roll out and the work NRAR is doing to enforce these rules here.