Water entitlements and trade
Under the Water Act 1989, the Victorian Government retains the overall right to the use, flow and control of all surface water and groundwater on behalf of all Victorians.
The Government manages the allocation of water resources across the state in accordance with the Act.
Victoria's water entitlement and planning framework clearly defines how water is shared, held, used and traded for maximum value.
It allocates water to cities and towns, irrigation, agriculture and industry, while making sure that rivers and aquifers remain healthy.
Water entitlements are managed under a framework which balances demands for water for consumption, the environment and other non-consumptive uses.
It considers all surface water and groundwater resources for both consumptive and environmental purposes at all phases of the water cycle.
More information on Victoria's water entitlement framework is available below
Water trading enables available water resources to be put to their most efficient use.
It provides provides entitlement holders with an effective way of managing climate variability and reallocating water during prolonged drought and times of scarcity.
A water market has existed in Victoria since 1991, with trading rules evolving as the market has developed. Ongoing reforms have led to an active market involving Victoria, South Australia and New South Wales.
The Victorian water market enables people to buy and sell entitlements and allocations. Prices and volumes of water traded are publicly available on the Victorian Water Register website.
Water entitlement framework
Victoria's water entitlement framework provides the basis for the management of Victoria's precious water resources.
The water entitlement framework works at three levels:
- Tier 1 – the State Government retains overall right to the use, flow and control of all surface water and groundwater on behalf of all Victorians.
- Tier 2 – the Minister for Water is responsible for granting entitlements to water (including environmental entitlements) and setting limits and caps.
- Tier 3 – individual rights to water.
Overview of the three tiers of water administration in Victoria
All water taken for consumptive purposes in Victoria is done so under entitlements set out in the Water Act 1989.
Entitlements issued by the Minister for Water
The Minister for Water issues entitlements under the Water Act 1989. These include:
Other entitlements to water
Some entitlements to water are not formally issued but exist under the Water Act 1989 for domestic and stock purposes by virtue of an individual's private ownership of, or access to, land.
The Water Act 1989 allows individuals to take water for domestic and stock purposes from a range of surface water and groundwater sources without a licence. These domestic and stock rights are defined under section 8(1) and section 8(4)(c) of the Act and are not formally issued. They include farm dams for domestic and stock purposes.
Entitlements to access water for domestic and stock purposes via Emergency Water Supply Points are also covered by statutory rights under section 8 of the Act.
Some rights to water exist under separate legislation. For example, under the Country Fire Authority Act 1958 fire-fighters have the right to use and control the delivery of water for fire-fighting purposes.
The Water Act 1989 also defines water that is set aside for the environment under the Environmental Water Reserve.
What is the difference between an entitlement and an allocation?
A water entitlement is the maximum amount of water authorised to be taken and used by a person under specific conditions/specifications.
A water allocation is the amount of water actually available for use or trade under an entitlement to water in a given year. The allocation depends on the conditions during the year and in a dry year an allocation will be reduced.