1. www.abare-brs.gov.au Economic Impacts of SDLs and Water for the Future Peter Gooday 22 October 2010

2. www.abare-brs.gov.au Objectives of the reports To examine the effect on agriculture and regional economies of –The Basin plan (3500 GL option) –Water for the Future –Government additional funding commitment to bridge any remaining gap

3. www.abare-brs.gov.au Methodology

4. www.abare-brs.gov.au Model Regions

5. www.abare-brs.gov.au AusRegion model baseline 2001-02 RegionGRPAg. share of Output $ billion% of GDP% Northern NSW15.42.0% 17.6 Riverina NSW11.31.5% 26.8 Western NSW1.50.2% 25.2 North East VIC8.61.1% 12.7 North West VIC10.91.4% 17 Queensland MDB7.91.0% 14.5 South Australia MDB3.30.4% 30.9 MDB Total597.8% 18.3 Australia Total759.2100.0%3.6

6. www.abare-brs.gov.au Employment in MDB and Australia by sector, 2006 Murray-Darling BasinAustralia Number employed Proportion of people employed No.% Agriculture90,5209.82.7 Services to agriculture5,6900.60.2 Manufacturing83,7609.111 Electricity, gas and water supply8,4700.90.8 Retail128,7401414.3 Government administration and defence94,71010.34.7 Education71,5507.87.5 Health and community services97,27010.610.7 Other industries340,5903748.1 Total employed persons921,300100

7. www.abare-brs.gov.au Data & Model Assumptions Regional SDL data were provided by MBDA Data provided by DSEWPaC included –Original water purchase (WP), average price is $2073/ML –Infrastructure Investments, average price is $4606/ML –Infrastructure water savings occur when SDLs are implemented –Additional WP to bridge the gap to SDLs occurs between now and when SDLs are implemented

8. www.abare-brs.gov.au Limitations Water supply variability is not investigated Analysis provides estimates over large regions, estimates at finer scale are not available due to limitations in the models Considers only productivity improvement from increased water use efficiency through infrastructure investment

9. www.abare-brs.gov.au Effects of the Basin Plan and ‘Water for the Future’ water entitlements in the MDB – a conceptual outline Environmental water Consumptive water SDL Existing Diversion Limit (the ‘Cap’) Farmer’s Share Commonwealth’s Share Water to be reallocated from consumptive to environmental use Gap to be addressed by continued buy-backs System savings from infrastructure investments on and off farm Buy-back

10. www.abare-brs.gov.au Impacts on Irrigated Agriculture

11. www.abare-brs.gov.au Impacts on Irrigated Agriculture

12. www.abare-brs.gov.au Economy-wide impacts

13. www.abare-brs.gov.au % change in GVIAP by region

14. www.abare-brs.gov.au GVIAP by region

15. www.abare-brs.gov.au Town Level Analysis

16. www.abare-brs.gov.au Towns that are highly reliant on irrigation expenditure

17. www.abare-brs.gov.au Land Use in Murray & Murrumbidgee

18. www.abare-brs.gov.au Land use in Condamine–Balonne, Gwydir & Namoi

19. www.abare-brs.gov.au Sensitivity Analysis Reduction in Basin GVIAP, with and without interregional trade

20. www.abare-brs.gov.au Sensitivity Analysis Basin GVIAP by industry, with interregional trade

21. www.abare-brs.gov.au Thank you Science and economics for decision-makers