Agriculture and Water Resources: Investing in Regional Growth—2016-17

The Agriculture and Water Resources portfolio contributes to the productivity, competitiveness and sustainability of regional Australia. Through the Department of Agriculture and Water Resources and its portfolio agencies, the Australian Government will continue to support regional Australia by delivering services directly to those who need them, while continuing to build on the success of the Agricultural Competitiveness White Paper.

In 2016-17 the Department of Agriculture and Water Resources will continue to lead the implementation of the Agricultural Competitiveness White Paper. The Agricultural Competitiveness White Paper represents a $4 billion investment to strengthen the agricultural sector and ensure it remains competitive. The programmes announced in the Agricultural Competitiveness White Paper will ensure that we have well developed agricultural industries, with world-class food safety and environmental credentials, and the best of modern technology, backed by a strong economy and highly skilled workforce.

The Agriculture and Water Resources portfolio is responsible for supporting regionally based industries worth $58.4 billion to the Australian economy, employing around 315,000 people and feeding more than 60 million people globally. In 2016-17 the Agriculture and Water Resources portfolio will work to maintain agriculture as one of the five pillars of the economy. This will be achieved by supporting profitable farm businesses, ensuring access to export markets for agricultural produce, improving net farm-gate returns and managing biosecurity risk. The Agriculture and Water Resources portfolio also provides support for the stewardship role played by farmers and regional communities over our natural resource base.

The Department of Agriculture and Water Resources, together with the Murray-Darling Basin Authority leads the Commonwealth's contribution to the Murray-Darling Basin Plan. The Murray-Darling Basin Plan, through the Sustainable Rural Water Use and Infrastructure Program, and other water reform initiatives, is working towards providing responsible long-term management of water for communities, the environment and farmers. It is supporting regional economies and the environment through large-scale investment that improves economic returns to irrigators and the community, while providing water for the environment. Through investment in water infrastructure projects across the Murray-Darling Basin, the Australian Government continues to boost efficiency and productivity in rural and regional Australia.

The Government's commitment to water reform is unwavering, and funding for the Commonwealth's water functions is secure in 2016-17. However, as we move into the next stage of the water reform agenda, the Government must invest in the areas that will have the greatest benefits for our communities, agricultural industries and rivers. To do this the agencies that deliver Commonwealth water programmes must operate as efficiently and effectively as they can. This and other factors that influence the level of funding needed by Commonwealth water agencies will be considered in an extensive review of all funding for Commonwealth water administrative functions in the coming months. The outcome of this review will feed into the Government's post-budget decision making process, with funding for the remaining priorities of the water reform agenda to be resolved before the 2017-18 Budget.

The Department of Agriculture and Water Resources has a strong presence in regional Australia, with more than 15 per cent of its employees based in regional areas. Throughout 2016-17 the Australian Government will continue to implement its policy to support regional Australia by transferring Commonwealth functions and agencies closer to the communities which they serve.

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New Initiatives

National Water Infrastructure Loans Facility

The National Water Infrastructure Loan Facility will be available from 2016-17 to enhance the capital availability for water infrastructure projects, stimulating and accelerating State and Territory government investments in major water infrastructure in regional areas (including public/private partnerships). This will include, but is not limited to, the construction of dams, pipelines and managed aquifer recharge projects that are economically viable and will generate affordable water to grow regional economies.

The National Water Infrastructure Loan Facility will make available $2 billion over ten years in loans directly to State and Territory governments.

Construction of new water infrastructure will help drive the development of regional economies including in the agriculture and resources industries (such as mining and energy). Access to affordable water will be a key influence over the extent to which Australia's farm and food sectors can realise export growth opportunities and meet growing demand from population growth.

Additional Rural Financial Counsellors

The Australian Government will continue the Agricultural Competitiveness White Paper measure to fund additional rural financial counsellors to meet increased demands during periods of drought, at a cost of $7.1 million over four years.

The Australian Government, together with State and Territory governments, funds the Rural Financial Counselling Service Programme to provide free financial counselling to primary producers, fishers, and small rural businesses in financial difficulty. There are 14 not-for-profit organisations that deliver the service across regional and rural Australia.

Drought conditions often lead to an increased number of farmers and small rural businesses in financial distress and this funding allows those in need to access prompt assistance to improve their business and personal situation.

Biosecurity Advanced Analytics Capability

The Biosecurity Advanced Analytics Capability initiative will allow for better decision making and targeting of risks that threaten our agricultural sector and the rural communities that depend on them, the environment and the broader economy. It will enhance Australia's ability to manage the impact of biosecurity risks and maximise trade.

Funding of $15.9 million over four years will be used to build an advanced analytics capability within the Department of Agriculture and Water Resources, including dedicated data and analytics specialists to better support biosecurity decision making.

The initiative will ensure better access to data that is needed to improve biosecurity decision making. This will increase our ability to know why, when, where and what pests and diseases should be the focus of biosecurity activities. Sharing of biosecurity data with States and Territories will be enhanced, to increase preparedness for potential pest and disease incursions. Access to biosecurity information will be developed in line with the Australian Government's Public Data Policy Statement.

National Carp Control Plan

Carp are the worst freshwater aquatic pest in Australia, and dominate the Murray-Darling Basin, where they can make up 80 to 90 per cent of fish biomass and have significant detrimental effects on water quality and ecosystem health. Economic impacts to Australia of carp infestation have been estimated at up to $500 million per year, and the majority of this impact is felt in regional areas. After 8 years of testing Australian scientists have determined that Cyprinid herpesvirus-3 (carp herpesvirus) offers a genuine option for the biological control of carp. The National Carp Control Plan provides $15.0 million over three years to undertake scientific research, operational planning, community engagement and communications activities required to support a potential carp herpesvirus release and subsequent clean up. The funding will be targeted to ensure that the National Carp Control Plan enables maximum impact on carp populations, and minimum disruption to industries, communities and the environment.

A national coordinator will work with governments and relevant stakeholders to design the National Carp Control Plan, and communication and engagement activities will educate and seek input from stakeholders. Successful implementation of the National Carp Control Plan will provide an opportunity to dramatically improve the health of our waterways, and bring substantial benefits to regional communities and water users, including farmers, recreational fishers and tourism operators.

Export and Regional Wine Support Package

The Export and Regional Wine Support Package will provide the Australian Grape and Wine Authority with $50.0 million over four years to fund a range of initiatives to promote Australian wine and Australian wine tourism both domestically and overseas, such as:

  • funding for regional wine associations to showcase their products at international trade shows;
  • the development of an international wine exhibition in Australia in 2018-19 and 2019-20;
  • coordination of Australian wine export promotion in overseas markets;
  • promotion of wine tourism to regional wine producing areas targeting both domestic and international tourists; and
  • assistance for smaller wine producers and exporters to access new or improved markets.

Wine tourism is an important part of many regional economies. This package will directly benefit regional wine producers by improving domestic and international wine tourism and assisting regional wine associations to take part in international trade shows. These activities, along with broader marketing and promotional opportunities, will help to drive exports of Australian wine and take advantage of recent Free Trade Agreements in key markets.

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Current Initiatives

Agricultural Competitiveness White Paper

The Agricultural Competitiveness White Paper was launched on 4 July 2015. It is a $4 billion investment in our farmers and delivers on an election commitment. The measures under the Agricultural Competitiveness White Paper focus on five key areas.

A Fairer Go For Farm Businesses

The Australian Government is helping farmers achieve a better return at the farm gate.

  • The Australian Government is providing a total of $11.4 million over four years ($2.7 million in 2016-17) to boost the Australian Competition and Consumer Commission's engagement with the agricultural sector. The appointment of a new Agriculture Commissioner, Mr Mick Keogh OAM, was announced in February 2016. A more proactive Australian Competition and Consumer Commission will help encourage fair-trading and improved competition in agricultural supply chains and ensure issues are dealt with swiftly;
  • The Australian Government is delivering on its $13.8 million commitment, with $6.9 million being spent in 2016-17 as part of a pilot programme to provide farmers with knowledge and materials on co-operatives and other forms of collaboration. This will include education tools and resources, customised expert support, and support to farmer groups working to get their collaborative project off the ground;
  • Agricultural users of agricultural and veterinary chemicals will get access to newer, better farm chemicals more quickly than in the past, and will get improved access to new uses of existing chemicals. This will make their businesses more competitive by reducing costs and improving sustainability;
  • From July 2016, improved country of origin labelling information will give consumers clearer information on the origin of their food; and
  • From 2016-17, the Australian Government will allow farmers who have previously opted out of income tax averaging to be able to re-enter the system after 10 years.

Building 21st Century Water, Transport and Communication Infrastructure

The Australian Government is planning ahead and thinking innovatively when it comes to our infrastructure.

Over $18 million of the $500.0 million National Water Infrastructure Development Fund will be expended in 2016-17 to develop feasibility studies for future water infrastructure. The National Water Infrastructure Development Fund provides future water security for our farmers—including $50.0 million to undertake detailed planning and $450.0 million to construct national water infrastructure, in partnership with State and Territory governments and the private sector; and

The Australian Government has committed $1.0 million to expand the Commonwealth Scientific and Industrial Research Organisation's (CSIRO), TRAnsport Network Strategic Investment Tool (TRANSIT) to support future government infrastructure investment. The Australian Government will continue to see real, tangible benefits like the $100.0 million Beef Roads Fund which is utilising the tool to look at the whole cattle supply chain. Farmers will see reduced transport costs from fixing road and rail inefficiencies, including bottlenecks and limited route options.

Strengthening Our Approach to Drought And Risk Management

Drought is one of the biggest challenges farmers face and it has a significant impact on agricultural output, productivity and farm incomes.

  • Farmers will have more accurate, local and more frequent seasonal forecasts to assist with making decisions as part of the Australian Government's commitment of $3.3 million for improved seasonal forecasting;
  • Eligible farm businesses are able to access a one-off rebate for costs incurred obtaining independent and professional advice to apply for new insurance policies that assist with the management of drought and other production and market risks;
  • The Australian Government will also provide access to $250.0 million each year in drought loans over the next 10 years starting in 2016-17;
  • From 1 July 2016, farmers and their partners receiving the Farm Household Allowance will receive additional assistance in their third year of payment through an increase in case management and the activity supplement;
  • Three enhancements are being made to the Farm Management Deposits Scheme: increasing the deposit limit to $800,000; allowing Farm Management Deposits accounts to be used as a farm business loan offset; and farmers in drought will also be able to access their Farm Management Deposits when they need it, without losing their taxation concessions. These changes will all commence in 2016-17;
  • The Australian Government has committed $35.0 million, including $5.0 million in 2016-17, to shovel-ready projects that have created job opportunities and provide short-term help in communities that are suffering economic downturn due to drought; and
  • The Australian Government has provided $25.8 million over four years, with over $4 million allocated in 2016-17 alone, to help the State and Territory governments deal with the impact of feral animals and weeds in drought-stressed regions.

A Smarter Approach to Farming

The agriculture sector needs access to the most advanced technologies and practices to continue to "farm smarter".

  • The Australian Government has developed clearer, farmer-oriented research, development and extension priorities which will direct levy funds to areas that will improve farm gate returns;
  • $100.0 million has been provided to extend the Rural Research and Development for Profit Programme to 2021-22, meaning farmers will benefit from getting research out of the laboratory and onto the farm, which is key to productivity growth;
  • A research boost of $1.4 million over four years will be provided to the export fodder and tea tree oil industries to match new agricultural production levies, as well as an increase in the matchable voluntary contribution rate for Forest and Wood Products Australia;
  • Support for research, development and extension in small industries through $1.2 million over three years for the Rural Industries Research and Development Corporation;
  • The Australian Government will be better placed to tackle pest and disease incidents, and to enable future containment and eradication programmes to be put in place, with over $12 million of a total $50.0 million committed to boost our emergency pest and disease eradication and national response capability in 2016-17; and
  • Farmers will have access to better tools and control methods for managing pest (including feral) animals and weeds, as well as support from the Australian Government for pest and weed management through our $50.0 million commitment to manage established pest animals and weeds, with $14.5 million allocated in 2016-17.

Accessing Premium Markets

Improving international trade will grow farm businesses and increase financial returns for farmers.

  • The Australian Government is making $8.7 million available in 2016-17 to break down technical barriers to trade, in turn helping farmers and food processors to achieve increased returns from increased security of existing market access and access to new markets;
  • Effective biosecurity protects our agricultural industries and the community from the impact of exotic pests and diseases, and supports our access to overseas markets. The Australian Government is funding improved biosecurity surveillance and analysis to better target critical biosecurity risks, including in northern Australia; and
  • Sound traceability systems help to ensure markets remain open, thereby increasing access and returns to farmers. In 2016-17, $4.4 million is being provided to modernise Australia's traceability systems, to verify integrity of products and improve access to overseas markets.

Farm Household Allowance

The Farm Household Allowance commenced on 1 July 2014 and is an uncapped, demand-driven programme that provides eligible farmers and their partners who are experiencing financial hardship with assistance and support to improve their long-term financial position.

The Australian Government recognises that farmers may experience significant financial hardship for a range of reasons—not just during drought. Through the Farm Household Allowance, eligible farm families Australia-wide are able to apply for household income support, paid at the same rate as Newstart Allowance (or Youth Allowance, if under 22 years of age). The Farm Household Allowance is administered by the Department of Human Services.

As part of this programme, recipients have access to case management services and a financial supplement of up to $3,000 to help them to undertake activities to improve their financial self-reliance. Starting 1 July 2016, Farm Household Allowance recipients who are in their final (third) year of payment will have access to an additional $1,000 for high value activities to assist their transition off payment before their entitlement ceases.

Farm Management Deposits Scheme

The Farm Management Deposits Scheme is designed to increase the self-reliance of Australian primary producers by helping them manage their financial risk and meet their business costs in low-income years by building up cash reserves.

The Farm Management Deposits Scheme allows eligible primary producers to set aside pre-tax income from primary production in years of high income, on which they can draw in years of low income. Income deposited into a Farm Management Deposits is tax deductible in the financial year the deposit is made and becomes taxable income in the financial year in which it is withdrawn.

Three enhancements are being made to the Farm Management Deposits Scheme as part of the Agricultural Competitiveness White Paper:

  • the deposit limit will double to $800,000;
  • farmers affected by drought will be able to withdraw their Farm Management Deposits early without losing their claimed taxation concessions; and
  • Farm Management Deposits will be able to be used to offset the interest costs of primary production loans.

A Bill to implement the changes is currently before Parliament. The changes will give farmers greater flexibility in managing their cash flow and addressing any income downturns.

Rural Research and Development for Profit Programme

The Rural Research and Development for Profit Programme implements the Australian Government's election commitment to invest an additional $100.0 million in rural research and development over four years from 2014-15. As part of the Agricultural Competitiveness White Paper, released in July 2015, the Australian Government extended the programme to 2021-22 and increased the funding to a total of $200.0 million. The programme funds research to increase the profitability and productivity of agriculture, fisheries and forestry industries and address particular high-priority challenges to achieve the best outcomes for producers. Consistent with the election commitment, funded research will focus on delivering cutting edge technologies, with an emphasis on making research accessible to end-users. $26.7 million of grants were awarded under the first funding round for the programme, and the government has announced that $52.2 million of grants will be delivered under the second round.

As part of the 2016-17 Budget, $9.5 million from the Rural Research and Development for Profit Programme has been allocated to fund high quality proposals to undertake feasibility studies for water infrastructure projects received as part of an expression of interest process under the National Water Infrastructure Development Fund programme. The water infrastructure projects made possible by this additional funding have the potential to improve the supply of reliable and affordable water for agricultural development in northern Australia.

Investment in Rural Research, Development and Innovation

Investment in research, development and innovation is vital for ongoing growth and improvement in the productivity, profitability, competitiveness and sustainability of Australia's agriculture, fisheries, forestry and food industries. The main way that the Australian Government invests in rural research and development is through the 15 Rural Research and Development Corporations. The Australian Government provides approximately $250 million per year to the Rural Research and Development Corporations. These investments are complemented by funding to Cooperative Research Centres, universities, the CSIRO and other departmental programmes.

The 15 Rural Research and Development Corporations' commission research for the benefit of the industries that they service, and the Australian community in general. The research focuses on strategic priorities, which may include improving productivity, developing new products or crop varieties, advancing profitable farming systems, managing resources sustainably, or building skills and capacity within the industry. The work of the Rural Research and Development Corporations contributes significantly to the strengthening of the economic diversity of regional Australia. Each Rural Research and Development Corporation has developed five-year strategic plans and, during 2016-17, each corporation will continue to advance their strategic goals.

Support for Small Exporters

The 2014-15 Budget implemented the Australian Government's election commitment to provide a rebate for export registration costs to assist small exporters. A total of $15.0 million has been allocated over four years to focus on assisting small exporters to improve market access. The initiative also includes funding for 2015-16 to 2017-18 for projects to improve market access, with a focus on small exporters.

A New Post-Entry Quarantine Facility

The 2012-13 Budget included a $379.9 million investment over seven years in the construction and operation of a new Australian Government-owned and operated post-entry quarantine facility for high risk animal and plant imports. Land for a new facility was acquired at Mickleham in Victoria in 2012 to consolidate existing animal and plant services to a single location. The first phase of construction was completed in late 2015 and the site was officially opened by the Minister for Agriculture and Water Resources on 26 October 2015. Operations commenced in November 2015 with the first arrival of imported animals. Phase two of construction commenced in early 2016 and operations at other facilities will be transferred progressively to the new station with the process scheduled to be completed in 2018.

Stronger Biosecurity and Quarantine

The Stronger Biosecurity and Quarantine initiative delivers on the Australian Government's election commitment to provide $20.0 million over four years from 2014-15 to 2017-18 to strengthen Australia's biosecurity and quarantine arrangements. The initiative provides early assistance to respond rapidly to pest and disease incursions in order to reduce the adverse impacts on affected regions, industries and communities.

The funding is intended for measures to supplement existing Australian Government arrangements to assess new pest and disease incursions for appropriate management, including containment and eradication where possible. This could include deployment of response personnel as well as support arrangements such as access to technical expert advice on best practice response measures and arrangements. It augments existing preparedness activities, improving the development of standard operating procedures, training of personnel, and vaccine stores to aid early detection and rapid response.

The funding will help to maintain market access for Australian industries in the event of a pest or disease incursion by working to ensure necessary processes are in place to enable access for affected commodities to each export destination. It supports the Australian Government's capacity to respond to pest and disease incidents where overseas representation may be required to maintain or regain market access for Australia's agricultural industries.

Better Regulation of Agricultural and Veterinary Chemicals

In the Agricultural Competitiveness White Paper, the Australian Government committed to streamline the regulation of agricultural chemicals and veterinary medicines (agvet chemicals) while retaining protections for the health and safety of humans, animals and the environment.

The Department of Agriculture and Water Resources is working closely with industry and stakeholders to develop reforms that provide for a more modern, responsive and flexible regulatory environment that better aligns regulatory effort with risk. The Department of Agriculture and Water Resources has conducted extensive consultation to inform the development of reforms and will continue to engage with stakeholders on longer-term reform opportunities.

These reforms will provide farmers with access to new farm chemicals more quickly, making their businesses more productive and sustainable.

Improving Access to Agricultural and Veterinary Chemicals

The small size of the Australian market can make the costs involved with registering an agvet chemical for its use in Australia uncommercial. This is particularly the case for treating pests and diseases in specialty crops and livestock species. As established in the 2014-15 Budget, the Australian Government has committed $8.0 million over four years to help farmers gain improved access to safe and effective agvet chemicals, to assist them in producing food for Australia and the world.

The Department of Agriculture and Water Resources is working closely with the Australian Pesticides and Veterinary Medicines Authority, grower groups, Rural Research and Development Corporations and the chemical industry to deliver this commitment.

A number of activities have commenced under the initiative, including work to:

  • establish an Agvet Collaborative Forum to allow users and chemical companies to identify and agree on chemical products and uses that deserve approval for use in Australia;
  • establish an assistance grants programme to help fund the generation of sufficient data to support applications to the Australian Pesticides and Veterinary Medicines Authority for taking into account the results of the collaborative forum;
  • establish an official Australian crop grouping list and associated Australian Pesticides and Veterinary Medicines Authority guidelines; and
  • start a project to migrate some Australian Pesticides and Veterinary Medicines Authority permits to product labels.

These initiatives, particularly the assistance grants programme, will provide short term relief to producers while longer term solutions are developed and implemented through broader reforms.

Council of Australian Governments Agricultural and Veterinary Chemicals Reforms

In response to a request from the Council of Australian Governments (COAG), the Australian Government, States and Territories have developed a single national framework to improve the regulation of agvet chemicals. The national framework will improve consistency and reduce compliance costs for businesses operating across state boundaries.

The Agvet Chemical Task Group oversees the implementation of the COAG reforms. In 2013-14, working groups were established under the Agvet Chemical Task Group to focus on delivering key elements including reviewing the minimum training and licensing requirements, and improving access to agricultural chemicals.

National Landcare Programme

Built on the principles of simple, long term and local, the National Landcare Programme is investing $1 billion over 4 years from 2014-15 to deliver projects that address sustainable agriculture and environmental issues and is administered collaboratively by the Department of the Environment and the Department of Agriculture and Water Resources.

The programme includes a long term approach to investment, requirements for regional Natural Resource Management organisations to provide funding directly to community and farmer groups; simplified reporting; and stronger approaches to community and industry participation in decision making. Sustainable fishing and water quality in estuaries and coastal marine environments is being supported through OceanWatch, which is a recognised Natural Resource Management organisation.

Australian Government Reef Programme

The Australian Government has committed over $82.4 million over four years from 2014-15 from the National Landcare Programme to the Reef Recovery Programme. This funding is part of the Australian Government's joint commitment with the Queensland Government to ensure a $2 billion investment in the Great Barrier Reef (the Reef) over 10 years.

The Reef Programme is jointly managed by the Department of the Environment and the Department of Agriculture and Water Resources. The Australian Government Reef Programme includes funding to assist land managers across the Reef catchment to adopt improved agricultural and urban management practices that reduce the discharge of nutrients, sediments and pesticides in the Reef lagoon and thereby improve the Great Barrier Reef's resilience.

Trade and Market Access

Agricultural export industries underpin prosperity in regional Australia through both employment and income generation. The Australian Government is continuing to develop and maintain opportunities for agricultural products to ensure they remain competitive and find new markets overseas. The Department of Agriculture and Water Resources contributes to improving market access through:

  • negotiating science-based, commercially viable conditions for Australian exports;
  • making representations and submissions in response to importing country measures or international standards that are not science-based or unnecessarily restrict trade of Australian products; and
  • influencing international agricultural policies, management strategies, protocols and standards so that Australian exports are not disadvantaged in world markets.

Water Infrastructure

The Australian Government is already more than half-way through the roll out of its $15 billion water reform agenda across Australia, which is supporting a diverse range of water infrastructure projects nationally. Much of this funding is occurring in regional areas under the $10 billion Sustainable Rural Water Use and Infrastructure Programme, primarily in the Murray-Darling Basin, but also in Tasmania and elsewhere. It is administered by the Department of Agriculture and Water Resources. Other current water infrastructure programmes in rural and regional areas include the $265.0 million South Australian River Murray Sustainability Programme and the $1.8 billion efficiency measures and constraints management.

In addition, this effort is being enhanced through the Australian Government's $500.0 million National Water Infrastructure Development Fund which is part of both the Agricultural Competitiveness White Paper and the Our North, Our Future: White Paper on Developing Northern Australia.

National Water Infrastructure Development Fund

The National Water Infrastructure Development Fund (the Fund) will provide $500.0 million to support the future development of water infrastructure, including the construction of dams and/or pipelines, wastewater reuse and managed aquifer recharge. The fund has two parts: the feasibility component ($50.0 million) and the capital component ($450.0 million). Up to $200.0 million of the Fund is targeted to northern Australia. The feasibility funding will support state and territory governments in identifying potential projects to assist agriculture and economic development.

$25.0 million in funding for feasibility studies was announced in the White Paper on Developing Northern Australia—$15.0 million for CSIRO to undertake water resource assessments in the Mitchell River catchment (Queensland), the Fitzroy River catchment (Western Australia) and the Darwin region (Northern Territory); up to $5.0 million for a feasibility study for Nullinga Dam (Queensland); and up to $5.0 million for a feasibility study for Ord Stage Three (Western Australia), including a detailed examination of soil suitability. Due to the high quality of proposals received as part of an expression of interest process, an additional $9.5 million has been allocated to this programme to fund further feasibility studies in Northern Australia.

The remaining $25.0 million of the feasibility component will be allocated to suitable projects through a competitive, merit-based expression of interest process, which closed on 1 March 2016. Capital funding of $450.0 million will be available to construct water infrastructure, in partnership with State and Territory governments and the private sector, from 2017-18.

Sustainable Rural Water Use and Infrastructure Programme

The Sustainable Rural Water Use and Infrastructure Programme is a national programme investing in rural water use, management and efficiency. It is the key mechanism to "bridge the gap" to the sustainable diversion limits under the Murray-Darling Basin Plan and consists of three main components: irrigation infrastructure projects; water purchase; and supply measures.

The majority of rural water infrastructure funds have been committed to projects in the Basin for improving the operation of off-farm delivery systems and helping irrigators improve on-farm water use efficiency. The water savings generated from these projects are shared between the Australian Government for environmental use and irrigators for consumptive use, supporting increased productivity and economic activity in regional communities. Investments outside the Basin include $200.0 million in Tasmania to support the construction of dams and backbone irrigation infrastructure.

All Murray Darling Basin State governments have agreed to arrangements that allow for up to 650 gigalitres of Sustainable Diversion Limit adjustments to be achieved through supply measure projects which offset the need for water to be acquired through purchase. These supply measure works will continue until 2024.

The Australian Government has legislated to limit purchase of surface water entitlements across the Murray-Darling Basin to 1,500 gigalitres. This limit will help provide Basin communities with more certainty that the government will ensure a balance between agriculture, the environment and the socio-economic wellbeing of communities.

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