THE market value of water entitlements in NSW could increase by more than $6 billion in the next five years, according to a report commissioned by NSW’s water regulator.
The NSW Natural Resources Access Regulator said a report it commissioned to put a dollar value on NSW water entitlements estimated it to be between $22 billion and $29 billion.
This came after a five-year analysis of over 30,000 NSW water licences from July 1, 2016, to August 30, 2021.
Marsden Jacob Associates, who prepared the report Assessing the Value of NSW Water Entitlements, estimated that growth in demand could increase water entitlements values to more than $35 Billion in the next five years.
But they said threshold limits such as farm business profitability could limit growth and it was “unlikely” growth would be as “significant” in the next five years.
Growth in water licence prices resulted from continuing demand of high reliability and groundwater entitlements from fruit, nut and grape producers during dry periods, the report found.
There was also an increase in demand from cotton producers for general security entitlements during years when more water was available.
The biggest growth in water entitlements was recorded in high-security entitlements in the NSW Murray (below the Barmah Choke) and the Murrumbidgee, where values more than doubled.
The findings come as NRAR has begun compliance checks in NSW after it reported in January that 31 per cent of pumps in the state did not have compliant meters 12 months after a deadline the water regulator had set.
NRAR director of regulatory capability and co-ordination Tim Gilbert said the report highlighted the importance of non-urban water metering and enforcement.
“Water has a significant monetary worth and taking it unlawfully has a measurable economic impact on other water users,” Mr Gilbert said.
“Given the value of production and the increasing demand for water access, metering reforms are vital to underpin the efficiency, effectiveness and equity of the system.”
