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Transitioning from the Cap to sustainable diversion limits

Water is a limited and valuable resource. Robust and transparent water accounting and compliance are essential to long-term water resource management arrangements that are sustainable, secure and adaptable.

In 1995, the Murray–Darling Basin Ministerial Council introduced the Murray–Darling Basin Cap on Surface Water Diversions (the Cap) to protect and enhance the riverine environment and protect the rights of water users. The Cap introduced long-term limits on how much water could be taken from rivers in 24 designated river valleys.

The Cap also introduced a requirement that Basin states had to work out ways to turn the long-term limits into annual Cap targets that take account of changes in things like the weather conditions and water availability in each year.

Under the Cap, Basin states have to provide data to the Murray–Darling Basin Authority (MDBA) about how much water was actually taken each year compared to the annual Cap targets.

Assessing Cap compliance

Once the MDBA receives annual data from the Basin states, the data is entered into the Cap Register and an assessment of compliance with Cap limits is made.

The Cap Register records a credit for the year if annual diversions were less than the annual Cap target and records a debit if annual diversions were more than the annual Cap target. For most Cap valleys, the annual credits/debits are added together from year to year to create a cumulative balance, which is also recorded on the Cap Register.

If it appears that more water has been taken in a particular valley than allowed under its Cap limit, the MDBA arranges for a special audit to be conducted by an Independent Audit Group. For most Cap valleys, the trigger for a special audit is when the cumulative balance is a debit of 20% or more of the long-term Cap limit.

If the Independent Audit Group confirms that too much water has been taken, the MDBA advises the Murray–Darling Basin Ministerial Council of the breach.

The state in which the breach occurred then must advise the Ministerial Council how it will address the issue.

Once diversions in a Cap valley where a breach has occurred come back into balance with the Cap and the Authority is satisfied that the Valley is once more compliant with the Cap, the Authority revokes the declaration and advises the Ministerial Council.

Since 1997–98, 18 special audits have been triggered across seven Cap Valleys. Of these, 14 have resulted in a declaration of a breach in particular water years. The Valleys in which breaches have occurred were the Barwon-Darling/Lower Darling, Gwydir, Lachlan and Namoi. There are no current declarations of breaches of the Cap. Further information about Cap compliance is available at:

Reporting on Cap compliance

Following the introduction of the Cap in 1995, interim arrangements were put in place to establish Cap compliance and reporting, starting with the 1994–95 year. Formal Cap reporting and compliance started with the 1997–98 water year.

For the period 1997–98 to 2011–2012, the MDBA reported annually on Basin state compliance with the Cap by publishing Water Audit Monitoring Reports. These reports provide a comprehensive analysis of water availability and take by state for each water year.

The Cap on diversions continues in parallel with SDL accounting until Schedule E of the Murray– Darling Basin Agreement is amended or repealed. The MDBA is working with Basin states to cease Cap reporting upon full implementation of sustainable diversion limits.

Sustainable diversion limit compliance

The Murray–Darling Basin Plan 2012 (the Basin Plan) introduced a new water accounting and compliance framework based on sustainable diversion limits that came into force from 1 July 2019. The sustainable diversion limit framework applies to 29 surface water and 80 groundwater sustainable diversion limit (SDL) resource units and will replace the Cap compliance framework.

Sustainable diversion limits (SDLs) represent the maximum long-term annual average quantities of water that can be taken on a sustainable basis from Basin water resources as a whole and the water resources, or particular parts of the water resources, of each resource area (SDL resource unit). The Water Act 2007 requires that this reflects an environmentally sustainable level of take.

The Basin Plan's sustainable diversion limit water accounting and compliance framework expands on the Cap framework to explicitly include reporting on water take from watercourses, regulated rivers, groundwater, run-off dams, floodplain harvesting and commercial plantations (net take), and for basic water rights.

Water regulators and users had seven years (the transition period) to move from the Cap-based to sustainable diversion limit water accounting and compliance.

Full implementation of the sustainable diversion limit compliance framework is subject to the accreditation of Basin state water resource plans by the Commonwealth Minister responsible for water. Until all water resource plans are accredited, bilateral agreements have been put in place with relevant Basin states to give effect to  SDL reporting and compliance from the 2019–20 water year.

Transition period water take reporting

Since 2012, Basin state governments have been required to report on water take in each SDL resource unit, as well as meeting their annual Cap reporting requirements. The MDBA is working closely with Basin state governments to trial the monitoring and accounting methods that will be used from 2019-20 water year.

Until then, the MDBA will report on annual Cap compliance and on the outcomes of the trial through transitional SDL water accounting reports to ensure a smooth transition between the two frameworks.

The Transition Period Water Take Report 2018–19 is the fourth and final in the series of transitional SDL accounting reports.

Updated: 12 Feb 2021