A secret sum set aside to buy water from farmers so it can be used for the environment has sent a "shiver down the spine" of agricultural communities, farmers say.
The Albanese government's first budget shows funding has been allocated to meet environmental water-saving targets, but the figure has not been not published "due to commercial sensitivities".
The ABC has confirmed the funding has been set aside so water could be purchased from irrigators willing to sell their entitlement to the Commonwealth, something that has not happened in the Murray-Darling Basin for almost a decade.
Farm groups say the opaque fund needs to be explained.
"Communities are nervous about the government's approach to this issue and the number concealed in the budget will send a shiver down their spine," National Farmers' Federation president Fiona Simson said following the budget.
New South Wales Irrigators' Council chief executive Claire Miller said the allocation was cause for concern.
"It's really triggering for basin communities and farmers because it takes them straight back to the old days of 2009 and 2012, where the government just rode roughshod over the communities to buy back water," she said.
Ms Miller said water prices would "skyrocket" if the Commonwealth entered the market.
Opposition worried about 'snowball' effect
Several reports have warned that the June 2024 target to provide a separate 450 gigalitres per year to the environment, as well as another target to provide 605GL per year using state-run infrastructure projects, is unlikely to be met.
Earlier this month federal Water Minister Tanya Plibersek hinted at extending the plan, having previously stated "voluntary buybacks are on the table".
Buybacks are vehemently opposed by Victoria, NSW, and the federal Coalition, all of which claim they leave basin communities worse off.
Following the budget, shadow water minister Perin Davey said she had learnt of water being withdrawn from the market.
"I got a call from a water broker this morning to say listings he had for permanent water for sale have now been removed because people think they'll get paid more by the government, it puts a squeeze on the water market," Senator Davey said on Wednesday.
Senator Davey and her Nationals colleagues were unsuccessful in an attempt to change legislation to axe the 450GL commitment last year.
"This is not about farmers, it's about communities," Senator Davey said.
"For every megalitre that is taken out of a community, it reduces productivity.
"Therefore, when that money isn't spent in the community — maybe a hairdresser moves out of town, she takes her family, the kids leave the school, the school population is reduced, therefore they get rid of a teacher and another family leaves town and it just snowballs from there."
Eastern states hit out at the prospect of buybacks
South Australian Labor Water Minister Susan Close welcomed the federal funding to meet environmental targets.
"For the first time, South Australia can feel some confidence that we're finally going to get the plan delivered," Dr Close said.
But Victorian Labor Water Minster Harriet Shing warned that "the basin plan legislation does not allow the 450GL to be recovered using buybacks".
NSW Nationals Water Minister Kevin Anderson again said his state did not support water buybacks.
"Meeting the environmental water targets in the Basin plan should not be done at the expense of NSW farmers," Mr Anderson said.
SA Greens Senator Sarah Hanson-Young said water buybacks were the most cost-effective and efficient way to return water to the environment.
"Today it might be floods, next year it might be drought and fires — such is the nature of the climate crisis we are in," she said.
"If licence holders have water to sell — especially right now — then they should be allowed to."
Australian Conservation Foundation campaign director Paul Sinclair said the 450GL was meant to return water to floodplains and wetlands across the basin.
"The floodplain and the wetlands are the supermarket of the river system," he said.
"If you stop the river getting to its supermarket, it dies."
In 2020, an independent review of the social and economic impact of implementing the Murray-Darling Basin plan found a growing sense of helplessness in river communities.
"In previously vibrant communities, volatility, rapid change, and uncertainty are resulting in sharp falls in investment and a loss of confidence," the report said.
"These outcomes have contributed to widespread farm exits, social dislocation, vulnerable supply chains, small town decline and downstream processors and employers contemplating their future in the basin."
Australia has already committed $13 billion to implement the Murray-Darling Basin plan since it was legislated in 2012.
