EXPLANATORY STATEMENT
Issued by authority of the Murray-Darling Basin Authority
Water Act 2007
Murray-Darling Basin Agreement (Schedule D – Adjusting Valley Accounts and State Transfer Accounts) (No. 2) Protocol 2026
Legislative authority
Section 18E of the Water Act 2007 (Cth) (Water Act) confers on the Murray-Darling Basin Authority (Authority), in a referring State or the Australian Capital Territory, the functions, powers and duties that are expressed to be conferred on it by or under the Murray-Darling Basin Agreement (Agreement), and relate to the water and other natural resources of the Murray-Darling Basin.
Paragraph 6(1) of Schedule D to the Agreement provides that the Authority may, in consultation with the Basin Officials Committee (BOC), from time to time make protocols about matters covered by Schedule D to the Agreement.
Purpose
The Murray-Darling Basin Agreement (Schedule D – Adjusting Valley Accounts and State Transfer Account) (No. 2) Protocol 2026 (the Protocol) supplements Schedule D as it relates to adjustments to and accounting of State entitlements arising from interstate and intervalley transfers in accordance with Schedule D to the Agreement.
The purpose of the Protocol is to repeal certain earlier instruments and to contribute, in part, to implementing the principles agreed to by State Contracting Governments to account for interstate and intervalley transfers, and the delivery of State entitlements in the southern-connected Murray-Darling Basin (sMDB).
Background
Schedule D to the Agreement governs arrangements for the accounting, administration, and coordination of interstate and intervalley transfers in the sMDB. It provides agreed structures and mechanisms for transfers between valleys and States to support an efficient and effective water market within the sMDB.
Clause 6 of Schedule D to the Agreement allows the Authority to make protocols in relation to the matters covered by Schedule D. The Protocol prescribes arrangements relating to accounts maintained by State Contracting Governments and the Authority, the delivery of water from valley accounts, and requirements for plans or proposals that may impact planning for water delivery across the sMDB.
Consultation
Subclause 6(3) of Schedule D to the Agreement requires the Authority to notify each Contracting Government when it has determined to make, amend, review, or revoke a protocol and to notify them of the subject matter of any such proposed protocol amendment, review or revocation. The Authority complied with this requirement, by giving notice to BOC members (each of whom represents a different Contracting Government)
Subclause 6(4) of Schedule D to the Agreement provides that a Contracting Government may nominate a person with relevant expertise and experience to give advice to the Authority in preparing, amending, reviewing or revoking a protocol. Subclause 6(5) requires the Authority to consider any advice given by a person nominated under subclause 6(4) before it makes, amends or revokes a protocol.
The Authority considered the advice given by the nominated representatives of Contracting Governments in preparing the Protocol, noting that those representatives endorsed the making of the Protocol.
Details
Details of the Protocol are set out in Attachment A.
Other
Under section 18D of the Water Act, a protocol made by the Authority under a Schedule to the Agreement is a legislative instrument, but is not subject to disallowance under section 42 of the Legislation Act 2003 or sunsetting under Part 4 of Chapter 3 of that Act.
As this legislative instrument is not subject to disallowance, a Statement of Compatibility with Human Rights is not required by paragraph 15J(2)(f) of the Legislation Act 2003.
Attachment A
Details of the Murray-Darling Basin Agreement (Schedule D – Adjusting Valley Accounts and State Transfer Accounts) (No. 2) Protocol 2026.
Section 1 – Name
This section provides that the name of the Protocol is the Murray-Darling Basin Agreement (Schedule D – Adjusting Valley Accounts and State Transfer Accounts) (No. 2) Protocol 2026.
Section 2 – Commencement
This section provides that the Protocol will commence on 1 July 2026.
Section 3 – Authority
This section states that the Protocol is made under clause 6 of Schedule D to the Agreement and section 18E of the Water Act 2007.
Section 4 – Purpose
This section provides that the purpose of the Protocol is to contribute, in part, to the implementation of the principles contained in the Annexure to the Protocol.
Section 5 – Application
This section provides that the Protocol applies to interstate transfers and intervalley transfers.
Section 6 - Definitions
This section provides for definitions for terms and expressions used in the Protocol. A number of expressions used in the Protocol are defined in the Act or the Agreement.
Section 7 – Schedule
This section gives effect to Schedule 1, which repeals the instrument specified in Schedule 1.
Section 8 – Maintaining accounts
This section provides that the Authority and each State Contracting Government must record and reconcile information relating to interstate and intervalley transfers as appropriate for each account for which they are responsible.
Under sub-section (2), State Contracting Governments must take reasonable steps to ensure the quality and accuracy of information regarding transfers as part of maintaining valley accounts.
Section 9 – Accounting for Spilled Water
This section contains rules for reducing the balance of valley accounts for water spilled from the relevant valley account. State Contracting Governments must reduce the balance of a valley account by the volume of water spilled from the valley account, except as otherwise provided in this section.
Section 10 – Tributary operating plans for valley accounts
This section provides that a State Contracting Government may develop and implement a tributary operating plan that deals with accounting for and delivering bulk interstate and intervalley water transfers from valley accounts.
Sub-section (2) provides that a State Contracting Government must consult with the Authority in developing and implementing a tributary operating plan.
Sub-section (3) sets out the matters that the State Contracting Government may have regard to in developing a tributary operating plan.
Sub-section (4) provides that a tributary operating plan may be made for one or more financial years.
Section 11 - Directions for use of water standing to the credit of a valley account
This section provides for the matters that the Authority must have regard to in making a direction under sub-clause 9(3) of Schedule D to the Agreement.
Under sub-section (2) and (4) a State Contracting Government must comply with any direction given under sub-clause 9(3) of Schedule D to the Agreement by supplying water from a designated water supply source to a designated site, as specified in the direction, at a prescribed rate of flow, and in a way that does not increase the priority of the delivery.
Sub-section (3) provides for how a direction must be complied with where the terms of the direction do not specify a designated water supply source or a designated site.
Under sub-clause (5) a State Contracting Government must reduce the valley account by the volume of water equal to the volume of water supplied to a designated site pursuant to a direction, whether or not the direction is subsequently amended or cancelled.
Section 12 – Designated water supply sources
Under this section, a designated water supply source for a relevant valley is a water source that:
- was designated as a reservoir under the repealed Murray Darling Basin Agreement (Schedule D — Adjusting Valley Accounts and State Transfer Accounts) Protocol 2010, immediately before the repeal of that instrument; or
- has been decided by the Committee to be robust and measurable, provided that the Committee is satisfied of certain prescribed matters.
Under subsection (2), a decision by the Committee may include conditions or limitations on the use of the water supply source.
Section 13 – Adjusting deliveries of water
This section applies where the Authority adjusts the delivery of State water entitlements under clause 8 of Schedule D to the Agreement.
Under sub-section (2), the Authority must record adjustments to the delivery of State water entitlements in the State transfer account for each affected state.
Under sub-section (3), the Authority may adjust the delivery of State water entitlements in a manner to more accurately match expected demands after consulting with the affected State Contracting Governments.
Sub-section (4) provides for additional principles relating to the adjustment of State water entitlements between New South Wales and Victoria from the Dartmouth Reservoir (if the volumetric trigger is met at the time of the adjustment), or otherwise from the Hume Reservoir.
Sub-section (5) provides for additional principles relating to the adjustment of State water entitlements between South Australia and another state.
Section 14 – Consultation on the delivery of intervalley transfers
This section requires the Authority to consult with relevant State Contracting Governments when preparing estimates, forecasts, or other predictions that the Authority may use to plan the delivery of intervalley transfers.
Under sub-section (2) the Authority must consult with State Contracting Governments when preparing estimates, forecasts or predictions that may inform the Authority in exercising its power in sub-clause 9(3) of the Schedule D to the Agreement.
Section 15 – Information sharing
This section provides that State Contracting Governments must provide information to the Authority regarding each valley account relevant to the performance and exercise of the Authority’s functions under Schedule D to the Agreement.
Under-subsection (2), this includes providing the Authority with up-to-date information regarding the volume of water available under a valley account.
Section 16 – Auditing and Adjustments
Under sub-sections (1) and (2) the Authority may require a State Contracting Government to appoint an independent auditor to audit a valley account if the Authority is satisfied that there is an error or omission in information relating to the valley account and that the error cannot be resolved in consultation with the State Contracting Government.
Under section (3), a State Contracting Government must provide a copy of any report prepared by an auditor appointed under sub-section (1) to the Authority.
Under sub-section (4), after receiving a copy of the report, the Authority may require a State Contracting Government to alter a valley account if the Authority is satisfied that doing so is necessary to address an error or omission.
Under sub-section (5), after an alteration to a valley account under this section, the Authority must recalculate adjustments to the State transfer account to account for that alteration.
Section 17 – Barmah Choke entitlement record
This section requires the Authority to undertake calculations and accounting as required, as part of maintaining the Barmah Choke entitlement record.
Section 18 – Accounting for the Barmah Choke Allocation Account
This section requires the Authority, in accounting for the Barmah Choke allocation account, to calculate the opening balance and account for interstate and intervalley transfers relating to the account.
Sub-sections (2)-(4) provide for certain rules and practices regarding the nature of water entitlements that must be accounted for in the Barmah Choke allocation account, which have been derived from water savings or were transferred before and after 1 July 2007 for the purpose of the Snowy Water Enquiry Deed.
Sub-section (5) contains additional requirements relating to the maintenance of the Barmah Choke allocation account.
Section 19 – Barmah Choke balance tool
This section requires the Authority to maintain and publish on its website an automated accounting tool that shows the balance of the available transfer capacity across the Barmah Choke.
Sub-section (2) provides that an approval authority may only record volumes against the Barmah Choke balance tool if it proposes to approve the relevant transfer of water allocations.
Section 20 – Review
This section provides for the circumstances in which the Authority may review and, if appropriate, consider amending this Protocol.
Schedule 1 – Repeals
Item 1:
The whole of the Murray-Darling Basin Agreement (Schedule D — Adjusting Valley Accounts and State Transfer Accounts) Protocol 2010 is repealed.
Item 2:
The whole of the Murray-Darling Basin Agreement (Schedule D — Adjusting Valley Accounts and State Transfer Accounts) Protocol 2026 is repealed.
Annexure 1
This Annexure contains the principles agreed by the Contracting Governments in seeking to further the purposes of Schedule D to the Agreement.