Green groups say the federal government is paying eight times over the market price for Murray-Darling water. 

Federal water minister Keith Pitt has announced the government will give $126 million to Murrumbidgee Irrigation for works to save 7.4 gigalitres of water, and return 6.3 gigalitres to the environment.

Environmental groups point out that this would amount to a record $20,000 per megalitre for water in the Murrumbidgee Irrigation Area, which is almost eight times what would be paid if the government bought water rights on the water market.

Nationals’ leader Barnaby Joyce stopped the practice of purchasing water on the open market during his time as water minister. 

This has left the government reliant on two programs: “supply projects” to deliver 605 additional gigalitres of water savings for the environment, and an “off-farm efficiency program” to deliver a further 450 gigalitres for the environment.

However, the Productivity Commission says (PDF) these two mechanisms face real risks of failure, describing the supply side projects as “highly ambitious” and criticising efficiency program for achieving only a small fraction (about 1 per cent) of the 450 gigalitres of water savings it was supposed to deliver.

Nature Conservation Council acting chief Jacqui Mumford described the spending as “a scandalous waste of taxpayers’ money”.

“There are far cheaper and more effective ways to meet the targets of the Murray-Darling Basin Plan,” she told reporters this week.

“If all water cost this much, the $13 billion Murray-Darling Basin fund would only buy 647.5 GL, about 20 per cent of the 3,200 gigalitres required to be recovered under the Basin Plan.

“That’s almost eight times the most recent price paid for the permanent trade of general security access to water on the open market in the Murrumbidgee.”