There are a number of water plans subject to review in Queensland including for the Burnett Basin, the Gulf and the Pioneer Valley. These water plans are the rules which govern a “water area’s” usage of water by allocating entitlements between users and setting regulations for the construction and use of water infrastructure.
The occurrence of the reviews is not unusual, given water plans are reviewed on a regular basis when nearing the expiry of plan’s 10-year term. However, of note in some reviews are proposals to convert current “water licences” to “water allocations”. A water licence is a licence connected to a parcel of land which authorises a landholder to take water from that specific lot. Save for some exceptions for “relocatable” water licences, it cannot be independently traded. A water allocation is a separately tradeable water entitlement that enables an owner to use water at certain locations in a “water area”.
On the one hand, this seems to open up commercial possibilities for primary producers to sell potentially valuable excess water as an independent asset. On the other, this is likely to put a higher price on water meaning it may not be accessible to smaller operators in an area, particularly in drier seasons.
Landholders won’t be entitled to “opt out” of proposed conversions, though they should consider the potential impact of a conversion on the value of land, any tax implications as well as whether the volume of the water licence entitlement will remain the same under the new water allocation.
Thynne + Macartney can advise landholders on proposed conversions of water entitlements to understand the new entitlements and the rules applying to them.
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