2. Presentation overview Drivers leading to a future with less water Management of water resources in the MDB Water for the Future initiatives assisting with the transition –Water market reform –Investments in more efficient delivery and use –Environmental water purchase program

3. River Health Good Moderate Poor Very Poor GoodModeratePoorVery Poor ParooBorder Rivers Condamine Namoi Ovens Warrego Gwydir Darling Lower Murray Murray Central Upper Murray Wimmera Avoca Broken Macquarie Campaspe Castlereagh Kiewa Lachlan Loddon Mitta Murrumbidgee Goulburn Paroo Condamine Border Rivers Gwydir Warrego NamoiCastlereagh Macquarie Lachlan Murrumbidgee Darling Lower Murray Wimmera Avoca Loddon Campaspe Goulburn Broken Ovens Kiewa Mitta Upper Murray Murray Central

4. Impact of climate change on average surface water availability CSIRO (2008) Water Availability in the Murray-Darling Basin

5. Average annual result % Change in valley MacquarieGoulburnMurrumbidgeeBorder Rivers Inflows -7 -13 -9-8 Diversions -4-6 -2 End of system flows -9-18 -17-12 Summary of CSIRO Sustainable Yields median climate change scenarios

6. Trade enables irrigators to adjust to: –Seasonal conditions –Economic pressures –New business risks –New water application technologies

8. Commitment to improved water trading arrangements Faster trade processing times National Water Market System Reforming trade barriers Water market, charge and trading rules

9. 1.Sustainable Rural Water Use and Infrastructure ($5.8b) 2.Restoring the Balance in the Basin ($3.1 billion) 3.National Urban Water and Desalination Plan ($1 billion) 4.Water Smart Australia ($937 million) 5.Driving Reform in the Basin (DEWHA and ACCC) ($646 million) 6.Improving Water Information (BOM) ($447 million) 7.National Water Security Plan for Cities and Towns ($256 million) 8.National Rainwater and Greywater Initiatives ($250 million) 9.Raising National Water Standards (NWC) ($214 million) 10.Living Murray Initiative ($185 million) 11.Great Artesian Basin ($85 million) 12.Northern Australia Futures ($20 million)

10. SRWUIP State Priority Projects $3.7b 14 State Led Projects 4 Commonwealth- led Projects Other Policy Announcements 33 Components Vic $1.103b SA $420M QLD $160m NSW $708m ACT $85m NSW PIIOP $650m SA PIP $110m IMPA $5m On-Farm $300m Strengthening Basin Communities $200m Hot-spots $23m SA and QLD Water Purchase (RtB) $430m

11. ProjectsStatus SA Lower Lakes Integrated Pipelines projectConstruction of pipelines now complete. SA – Private Irrigation Infrastructure ProgramApplications open until 8 April 2010 NSW- Private Irrigation Infrastructure Operators Program Applications closed on 27 November 2009; being assessed Northern Victoria Irrigation Renewal Project Stage 2 Business case received – currently undergoing due diligence. NSW – On farm modernisationNSW developing business case. Pilot project underway Commonwealth On-Farm Irrigation Efficiency Program Round 1 applications currently under assessment. Strengthening Basin CommunitiesSuccessful applicants for Phase 1 Planning and Water Savings Initiatives announced. Queensland on-farm water use efficiency projectBusiness case received and assessment nearing completion

12. Restoring the Balance in the Murray-Darling Basin (RtB) Objective: to achieve a permanent re-balancing of the system, by purchasing water entitlements from willing sellers $3.1 billion over 10 years Environmental water recovery program focussed on purchasing water for high priority environmental needs

13. Basin Contracts exchanged as at 30 September 2009 EntitlementAverage Water Yield GL% % Queensland5<12 NSW4417224662 Victoria1482413233 South Australia163154 TOTAL612100395100 Basin Contracts exchanged as at 31 January 2010 (including the Toorale purchase) EntitlementAverage Water Yield GL% % Queensland7<12 NSW5496931760 Victoria2032618034 South Australia365326 TOTAL797100532100 * Columns may not tally due to rounding

14. 92% of expenditure in high priority catchments Southern Connected System 67% of total purchases (NSW 25.6%) (Vic 34.7%) (SA 6.9%) Macquarie 7% of total purchases Gwydir 18% of total purchases Lower Balonne No purchases – waiting for ROP to be finalised

15. RtB has added depth to the water market – an additional selling option! Use of sale proceeds- in descending order….. –Retire debt –Reinvest on-farm –Continue farming - invest off-farm –Exit farming Also smooths the transition to new water sharing arrangements expected under Basin Plan

16. Change is inevitable! The Water for the Future initiative is smoothing the path by pursuing: –Water market reforms –Better infrastructure –Purchasing environmental water