How Water Sharing Plans work

By setting the rules for how water is allocated for the next 10 years, a water sharing plan provides a decade of security for the environment and water users. This not only ensures that water is specifically provided for the environment through a legally binding plan, but also allows licence holders, such as irrigators who require fairly large volumes of water, to plan their business activities. Irrigation accounts for about 80% of all water used in New South Wales.

In inland NSW, all existing water sharing plans will be reviewed to ensure consistency with the requirements of the Commonwealth’s Basin Plan by 2019. They will form a component of the required water resource plans.

Water sharing plans set rules for water trading, that is, the buying and selling of water licences and also annual water allocations. For most new commercial purposes water trading remains the primary way that water can now be obtained, as in most areas of the state the available water is fully allocated.

The purpose of a water sharing plan is to:

  • provide water users with a clear picture of when and how water will be available for extraction
  • protect the fundamental environmental health of the water source
  • ensure the water source is sustainable in the long-term.

Major elements of a water sharing plan

A water sharing plan:

  • provides water for the environment by protecting a proportion of the water available for fundamental ecosystem health and/or including specific environmental rules – this is called planned environmental water
  • adaptive environmental water (EWA accounts) is water that can be used at the direction of the environmental water manager within the plan rules. Held environmental water (HEW) is entitlement which can arise from water recovery projects or by buying water licences. This water can be used at the discretion of the environmental water manager
  • protects the water required to meet basic landholder rights
  • sets annual limits on water extractions to ensure that water extractions do not increase and therefore erode the water for the environment and also the security of supply to water users
  • determines what type of additional licences can be granted such as local water utility access licences (for town water supplies) and Aboriginal cultural access licences
  • determines how water is to be shared among the different types of licensed users by setting the priorities of supply. For example in dry periods water for domestic purposes has priority over commercial uses
  • provides flexibility for licence holders in the way they can manage their water accounts through aspects such as the ability to carry-over some unused account water or through group rostering
  • specifies rules in groundwater plans to minimise impacts on other groundwater users, dependent ecosystems, water quality and the stability of the aquifer
  • specifies the rules for water trading or dealings
  • sets out the mandatory conditions that apply to licence holders
  • specifies which parts of the plan can be changed without triggering the compensation provisions of the Act
  • sets out the monitoring and reporting requirements, including indicators against which the performance of the plans is to be monitored. The Natural Resources Commission is to review the water sharing plans.

How are water users affected?

Water sharing plans set rules for sharing water between water users and the environment and bring water users into a single licensing system managed under the Water Management Act 2000.

The plans clearly define shares in the available water for licence holders. They also provide irrigators and farmers with continuing or 'perpetual' licences, which have a title separate from the land, enabling better water trading opportunities.

Water sharing plans support the long-term health of rivers and aquifers by making water available specifically for the environment.

Commercial water use

Water taken for commercial use must be licensed. Commercial use includes irrigation, mining, manufacturing, power generation, snow making, dairies, intensive animal production, tourism facilities and aquaculture.

In general, commercial licences under the Water Management Act are granted in perpetuity. The plans also define the rules for access to water by commercial users for 10 years. This supports greater business certainty and assists commercial licence holders in planning for the future.

The plans also strengthen water trading, which allows users to purchase water from licensed users who are not extracting their full entitlement or to sell the licensed water that is surplus to their needs. Water trading may also allow new industries to develop in areas where it was previously restricted and new licences were embargoed.

All plans specify rules for when a river has very low flows. These rules tell you when pumping is not permitted. Some unregulated river plans also specify daily limits on how much water can be taken during different flow levels. These rules create equity for licensed water users when they take water, while still protecting environmental flows in rivers.

If you currently take water from a licensed dam that is not on a river these pumping conditions will not apply to you, but other parts of the plans will. Similarly, the flow sharing rules in a plan will not apply to dams constructed as part of your harvestable right.

There is an exception to the ban on pumping when river flows are very low for existing licence holders who need water for animal health and hygiene such as for washing a dairy after milking or cooling chicken sheds. The plans list those licence holders granted this exemption.

Water for the environment

Under the plans, water must be reserved for the fundamental health of a river or aquifer and the ecosystems that depend on it, such as wetlands and floodplains.

The current level of demand on a river or aquifer and its environmental, social and economic values assist in determining the environmental flow rules in a plan. All plans include water sharing rules which set an annual limit on extractions.

The water sharing plans for unregulated rivers include rules that:

  • require a visible flow at licensed pump sites or other locations before water users can extract water – a minimum level of environmental protection that will apply to all plans
  • introduce a 'cease to pump' condition when river flows drop below a specified level – all plans will include 'cease to pump' conditions for licensed users
  • set daily limits on extraction for different flows (low, medium and high flows) – where there are a high number of extractors or there is a high level of environmental protection required
  • recognise that some alluvial aquifers are highly connected to their parent streams, and in these circumstances, the goal of water sharing rules is to manage the surface water and highly connected groundwater as one resource.

In the regulated rivers, rules can vary from water set aside in environmental accounts to releases of various portions of dam inflows.

Groundwater may contribute to ecosystems such as wetlands, springs, caves, terrestrial vegetation and coastal sand dune systems and provide important base flows to rivers and tidal creeks. Water sharing rules to protect ecosystems that depend on groundwater will include an overall annual limit on extractions.

The groundwater plans include rules that:

  • reserve the storage component of the aquifer
  • protect a proportion of the natural recharge – that is, the volume of water added to a groundwater system naturally, usually by infiltration from rainfall and river flows
  • allow for the refining of recharge estimates
  • set distance limits between any new bores and groundwater dependent ecosystems.

Basic landholder rights and licensed domestic and stock use

If your rural property fronts a river or overlies a groundwater aquifer, you are entitled to pump water to meet your reasonable domestic and stock requirements without a licence as part of your basic landholder right. For groundwater, however, you will still need works approved for the bore.

Where established under Commonwealth law, native title rights to water are also protected by the plans. The water sharing plans protect these rights by allowing you to continue to take water even when licensed users must cease to pump.

However, in very dry times, restrictions may be imposed on the amount of water that can be taken, recognising the impacts of extraction on the environment and other users. These restrictions are described in the Water Management Act 2000 and are not generally defined in the plans.

If you take water from a farm dam according to your harvestable right, your access is not affected by the rules in a water sharing plan.

Access to a reasonable supply of water for licensed domestic and stock use has a higher priority than any other licence type. Water sharing plans recognise this priority by ensuring that a full share of water is allocated for domestic and stock use, except where exceptional drought conditions prevent this. In an unregulated river system, access may still be limited by the daily variations in river flow. When a river has very low flows, pumping by licensed domestic and stock users may be reduced or not permitted. These rules will be specified in each water sharing plan.

Town water supplies

Towns have a higher priority for access to water than commercial licences. Water sharing plans recognise this priority by ensuring that a full share of water is allocated for annual town water supplies, except where exceptional drought conditions prevent this.

The annual share for every town water supply is specified on the town's licence. This share is based on either existing volumes or an assessment of reasonable use. Towns are permitted to sell part of their annual account water to other towns but, unlike commercial users, are not able to sell their licence outright. Towns will not need to change their existing licensing arrangements unless their current infrastructure (e.g. a dam) is unable to meet their water needs and requires upgrading. In this case, town water utilities will need to meet conditions specified in the plans to ensure that there is enough water flowing to protect the environment. They will also need to demonstrate that the Best Practice Management of Water Supply and Sewerage Guidelines (PDF 767 KB) are being implemented.

Water for Aboriginal communities

All water sharing plans recognise the importance of rivers and groundwater for Aboriginal people. All plans will allow Aboriginal communities to apply for a water access licence for drinking, food preparation, washing and watering domestic gardens, as well as for Aboriginal cultural uses such as manufacturing traditional artefacts, hunting, fishing, gathering, recreation, and ceremonial purposes. A licence may be granted as long as the uses are not associated with commercial activities.

Some plans for coastal rivers and groundwater systems may also allow applications for licences for Aboriginal community development purposes.

We work closely with Aboriginal communities to develop water sharing plans. Aboriginal people have a spiritual, customary and economic relationship with land and water that provide important insight into 'best practice' for natural resource management.