Water buybacks are the most cost effective method of restoring environmental flows to the ailing Murray-Darling Basin (MDB), according to new research.

Economic modelling by Dr Glyn Wittwer and Dr Janine Dixon from Monash University’s Centre of Policy Studies (CoPS) found money allocated to infrastructure upgrades would be better spent on investment in regional services.

Dr Wittwer said contrary to claims that buybacks would have a severe negative impact on MDB communities, the modelling found only small impacts on regional economies.

“Voluntary buybacks provide a financial option which farmers have embraced, selling over 1300 GL of water to the Commonwealth to date,” Dr Wittwer said.

The research found calls to roll back the buyback scheme and invest more heavily in infrastructure were at odds with the economic modelling. Investment in infrastructure was found to cost up to five times more per unit of water than buybacks.

“The attraction of upgrades to irrigation infrastructure is that they compensate the region with additional high security water. Even during drought, when water is more valuable, the upgrades were too costly,” Dr Wittwer said.

“There appears to be broad acceptance in the community to sink substantial funds into the MDB, but is that best way to spend the money?”

When compared to irrigation improvements, the model found every dollar invested in regional services would have three to four times the impact on jobs in the MDB.  For a fraction of the cost of irrigation upgrades, the same environmental outcome could be achieved by extending the buyback scheme.

“The message from the modelling is clear. Buybacks are the best way to achieve environmental flows,” Dr Wittwer said.

“Compared to infrastructure upgrades, investment in regional services is a superior form of regional support with three to four times the impact on jobs.”

The full report can be downloaded from the CoPs website.