Commonwealth Off-farm Efficiency Program

Overview

The Australian Government made $1.54 billion in funding available for the Off-farm Efficiency Program. The program is designed to invest in infrastructure and provide water for the environment. The recovered water can count toward the 2,750GL target if there are no negative socio-economic impacts.

The funding came from the Water for the Environment Special Account. The funding package included 3 components:

Murray-Darling Basin state-led initiatives

• $1.33 billion available for delivery of eligible off-farm proposals.
• $60 million available for delivery of eligible on-farm proposals.

An off-farm Efficiency Grants Program

• $150 million was available through the Australian Government’s Business Grants Hub. This grants program is now closed.

Victoria’s independent analysis of social-economic impacts

The research showed that programs with entitlement transfers can't avoid negative socio-economic impacts. This is particularly true for negative impacts on water markets and increased risks of stranded assets.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) confirmed these findings.

Read about the social and economic benefits of the Basin Plan in Victoria

Developing socio-economically neutral or positive water efficiency projects

It's not only participants affected by these projects. Water recovery projects can have flow-on impacts to regions, districts and the Basin.

Any proposal must address how the risks are mitigated and contribute to water recovery above the 2,750 GL. It needs to show how market impacts and other flow-on impacts are mitigated.

The Victorian Government has established a process through which DEECA and partner agencies (for example Water Corporations and Catchment Management Authorities) work with proponents to develop water efficiency project proposals that comply with the agreed socio-economic criteria.

Victorian process for developing water efficiency projects

The key steps of the process are:

1. Proponents identify a water efficiency opportunity and then contact DEECA to discuss it. Proponents might include private businesses, water corporations or other public agencies.
2. DEECA will provide high-level guidance on meeting the socio-economic criteria. Meeting these criteria will form part of the project's development.
3. Proponents work with DEECA and relevant agencies to develop a project proposal/business case*. The business case needs to meet the socio-economic criteria.

*Major projects may seek funding for business case development from the Australian Government.

Socio-economic assessment of water efficiency projects

Socio-economic assessment of all proposed Victorian water efficiency projects will be undertaken by the Victorian Government, prior to being submitted to the Commonwealth for funding.

The key elements of the socio-economic assessment are:

• the validity of water savings
• potential impacts on water prices
• community and industry engagement
• the future viability of proponent businesses and irrigation districts
• expected socio-economic, environmental and cultural outcomes
• third-party impacts on irrigation districts, water market, local communities, regions and Victoria
• integrated implementation opportunities
• improving resilience to climate variability and drought.

About the assessment process

The state-led socio-economic assessment process includes a period of public comment. Public comment on efficiency measures is Basin-wide so you can have your say on all projects proposed throughout the Basin.

The key steps of the Victorian Government's assessment process are:

1. Proponents submit project proposals along with information about the project’s expected socio-economic outcomes to DEECA.
2. DEECA reviews the information to ensure the requirements of socio-economic criteria are covered before making the project available for public comment.
3. If DEECA determines that additional socio-economic information is required prior to proceeding to public comment, proponents will determine how to proceed.
4. Non-sensitive socio-economic information about the project will be published on Engage Victoria for public comment for a period of at least 2 weeks (10 business days).
5. DEECA will consider the feedback received and appropriate responses in consultation with the proponent. DEECA’s response to the feedback will be published online within 10 business days of the consultation period closing.
6. If changes to the proposal are necessary to respond to community concerns, proponents will decide how to proceed.
7. If no action is necessary, project proposals along with detailed information on how the project meets the requirements of the socio-economic criteria will be submitted by DEECA to the Victorian Minister for Water for a decision on compliance with the agreed criteria.
8. Once approved by the Victorian Minister for Water, the project will be submitted to the Commonwealth for funding consideration with socio-economic information attached.
9. The Commonwealth will then make funding approval decisions and contractual agreements.

Socio-economic assessments

Projects submitted to the Victorian Government for socio-economic assessment and the outcome of these assessments are recorded below:

Projects that proceeded to public consultation and were approved

• Type of project: Off-farm
• Location: GMID
• Water recovery: 15.9 GL Long Term Average Annual Yield (LTAAY)
• Outcome of assessment: The proposal proceeded to public consultation on Engage Victoria website. The proposal was determined to be compliant with the socio-economic criteria and submitted to the Australian Government for funding consideration.

Projects that proceeded to public consultation and were not approved

• N/A

Projects that did not proceed to public consultation

• Type of project: Off-farm
• Location: GMID
• Water recovery: 2.25 GL HRWS
• Outcome of assessment: The proposal was returned to the proponent. The proposal submitted to the department did not meet the requirements to proceed to public consultation.

For more information about socio-economic assessments of Victorian water efficiency projects, visit Lower Murray Water (LMW) Water Efficiency Project.

More information

To register your interest in developing a Victorian water efficiency project or to submit a project for socio-economic assessment complete the inquiry form.

You can also contact us with details from the form via email at mdb.waterefficiency@deeca.vic.gov.au.

Information on Victoria’s approach to additional water recovery

Page last updated: 20/09/23