Water Act review must not open door to more water buybacks

The dairy industry says the Independent Review of the Water Act’s interim report fails to adequately protect dairy farmers, manufacturers and regional communities from the impacts of further buybacks.

Australian Dairy Industry Council (ADIC) – the national dairy industry representative body – supports improvements to transparency, accountability and environmental water efficiency, but opposes reforms that will facilitate further water buybacks.

The interim report, published today, finds the core architecture of the Water Act remains broadly appropriate, and recommends targeted reforms rather than wholesale change. It also recognises environmental outcomes depend on more than water volumes, including river operations, physical constraints, connectivity, water quality and habitat condition.

ADIC Chair Ben Bennett said this aligned with an important argument put forward by the dairy industry in its submission to the review – that environmental policy should focus on outcomes, not just water recovery volumes.

“Dairy farmers want healthy rivers and strong environmental outcomes, but the answer cannot always be taking more water out of food production,” Mr Bennett said.

“We welcome the review’s recognition that physical constraints, river operations and complementary measures matter, and that we need to get better environmental results from the water already recovered.

“Where the interim report falls short is in protecting communities and industries if more productive water is taken out of the system.”

The dairy industry’s submission to the review called for buybacks to cease and for any proposal reducing consumptive water access to undergo independent, regionally disaggregated assessment of impacts across farming, manufacturing, employment and regional economies.

The interim report acknowledges Basin-wide analysis can obscure local impacts, particularly in smaller, remote and irrigation-dependent communities, but stops short of recommending the stronger industry and regional safeguards sought by dairy.

ADIC Deputy Chair John Williams said that was an unresolved issue for dairy.

“A Basin-wide economic result can look relatively benign while individual communities, dairy farmers and processors carry a much greater cost,” Mr Williams said.

“For dairy, the numbers are stark. Modelling shows water buybacks could result in up to 270 million litres of milk lost each year, wipe annual dairy processing revenue by as much as $545 million, and drive further processor rationalisation and factory closures as manufacturers compete for a shrinking milk pool.

“Governments must understand what this all means for milk production, water affordability, processing capacity, regional jobs and Australia’s food security.

“We support greater transparency and accountability. But the same rigour must apply to understanding the consequences of taking productive water out of regional dairy communities.”

Consultation on the Interim Report closes 17 December 2026, with the Final Report due by 28 February 2027.