Commonwealth and state water ministers meeting in Brisbane have agreed there are real risks in delivering water in the southern Murray Darling Basin.
Ministers accepted a report on Murray Darling Basin constraints modelling, prepared for Victoria and NSW, by an independent panel.
Victorian Water Minister Lisa Neville said from the state's perspective there had been some "good wins" from the meeting.
"Finally, there has been an acknowledgement from the Murray Darling Basin Authority and the ministerial council that we have real deliverability issues along the southern Basin," Ms Neville said.
"Right now, Victoria has had to put in place an extraction licence limitation to manage those shortfall risks, and we now have agreement we've got deliverability issues."
The constraints review panel was made up of chair, former Department of Sustainability and Environment secretary Greg Willson, former senior water policy bureaucrat Campbell Fitzpatrick and former MDBA board member George Warne.
Panel members said continuing with the existing approach, given current community concerns, whilst maintaining the June 2024 deadline for completion, had a high chance of failure.
Panel members agreed with the Productivity Commission's Murray Darling Basin Plan five year-assessment that meeting the 2024 deadline was highly ambitious, if not unrealistic.
There was also acknowledgment there were serious issues with projects under the Constraints Measures Strategy (CMS).
Ms Neville said a plan would now be developed to provide a more realistic timeframe, appropriate milestones and greater buy-in from local communities.
NSW and Victoria had made it very clear there would be a great deal of difficulty in delivering the CMS, which involves projects critical to delivering the Murray Darling Basin Plan.
The plan sets an ambitious target of recovering 2750 gigalitres of water recovery, although that could be bolstered by 450GL, to 3200GL if there are no negative socio-economic impacts.
The CMS looks at easing impediments to water flow, by raising man-made structures, such as roads, bridges and levies, and flooding private land.
"We can't just have constraints projects that are about delivering a super highway of water," Ms Neville said.
"We need to work with communities on where we flood, where we don't flood, and take those communities with us, in developing these projects."
Ms Neville said the water ministers had acknowledged the independent panel's report.
"We have asked officials from each of the states to come back and reflect on how we deal with those challenges on those projects, allowing us potentially additional time to deliver those, and make sure we take those communities with us," she said.
Ms Neville said ministers also agreed to write to the Australian Competition and Consumer Commission, asking it to look at overseas ownership of water, as part of its water market review.
- New water market rules
- Concerns raised over state water sharing review
- Variable summer flows in bid to protect the Goulburn
- Farmers march on Canberra over the Murray Darling Basin Plan
But Ms Neville said there were issues ministers could not agree on.
She reiterated the Victorian government's opposition to a review of state water sharing arrangements, which predate the Murray Darling Basin Plan.
"I don't think a water share review, given most of the other states won't be participating, is going to be worthwhile," she said.
"I think it creates an expectation for people, who are doing it really tough, that there is water available, and it just isn't there."
Ms Neville said the decision to ask interim Murray Darling Basin Water Resources Inspector-General Mick Keelty was made by Federal Water Resources Minister David Littleproud, after meeting with NSW irrigators in Canberra.
Can the Plan
Upper Goulburn River Catchment Association representative Jan Beer, Yea, said she still believed the Murray Darling Basin Plan must be stopped, as it had failed on every conceivable level, and the remaining $4.8 billion set aside for its implementation quarantined.
That would allow the plan's fundamental flaws and mistakes, which were having an impact on food producers, to be rectified.
The plan had destroyed the beds, banks and water quality of the region's main river systems, by encouraging carp proliferation and increased hypoxic black water events
"Economically [it has] removed 30 per cent of water from the productive consumptive pool and allowed an open water market policy, where water is traded as a commodity similar to the share market, which has created extreme water prices unsustainable for agricultural production," Ms Beer said.
She said there had also been a domino effect on reliant businesses that had destroyed communities and removed all hope of survival by many regional communities.
"Since 2012 we have been constantly telling politicians and bureaucrats that a constraints strategy would not work," she said.
"For six to seven years we have repeatedly stated that 80,000 megalitres a day to the South Australian border was unviable and unachievable.
"So, finally at the expense to taxpayers of hundreds of millions of dollars (about $700,000 to be spent by 2018-2019 according to the Special Amendment Act), it has been publicly stated this water cannot be delivered."
Opposition Water spokeswoman Steph Ryan said the government had "kicked the plan down the road".
"In failing to acknowledge that the constraints management strategy cannot be implemented, the government, along with the commonwealth and other basin states, has conceded it's still working on the false assumption huge volumes of environmental water can be pushed down the river," Ms Ryan said.
"It's time to throw the constraints management strategy in the bin and rethink how much water the environment can realistically deliver."