CHINESE and United States interests are the largest foreign owners of water entitlements in Australia, an Australian Taxation Office report released this month shows.
In collaboration with the Foreign Investment Review Board, the ATO has compiled the first register of foreign ownership of water across Australia, effective up to 30 June 2018.
The total volume of water entitlements with a level of foreign ownership (at least 20pc foreign-held) is 4035 gigalitres, out of a total water entitlement (based on Bureau of Meteorology data, collected under the Water Act) on issue of 38,674 GL. This suggests the proportion of water entitlement (including groundwater and surface water entitlement) with a level of foreign ownership is currently 10.4 percent.
China and the United States were the largest foreign water entitlement holders, each with 1.9pc of total water entitlement, followed by the United Kingdom (1.1pc), Canada (0.5pc) and Singapore, France and Switzerland (each with 0.4pc).
The top ten foreign countries accounted for 3371 GL, or 9.1pc of the total Australian water entitlements, covering both ground and surface water.
On a national basis, the greatest use of foreign-held water entitlement was for agriculture (66.5pc) and mining (26.3pc). In percentage terms, water for agricultural use by foreign owners was highest in South Australia (96pc), Victoria (93pc) and NSW (87pc), and lowest in Western Australia (less than 22pc), Northern Territory (47pc) and Tasmania (65pc).
Less than 6pc of foreign-held water entitlement was in the form of leases (contractual rights), while less than 3pc of foreign held water was irrigation rights, issued by irrigation infrastructure operators.
More than 1800 GL of foreign-held water entitlement is within the Murray-Darling Basin, which is 9.4pc of the total Murray-Darling Basin water entitlement on issue. The Murray-Darling Basin in turn has just over 51pc of the total water entitlement on issue in Australia.
More than 81pc of foreign-held water entitlement is held within Australian incorporated entities.
On a state and territory basis, New South Wales/ACT had the greatest amount of foreign-held interest in water entitlement on issue by volume, accounting for 1306 GL. Queensland had the next largest portion by volume, with 1219 GL, followed by Western Australia with 995 GL. The remaining states and territories all had individual totals less than 250 GL.
Almost one fifth of all groundwater across NSW is foreign-owned, while Victoria registers one of the lowest levels of foreign ownership, with just 2.3pc of groundwater and 2.7pc of surface water held by overseas entities.
Surface water in the northern basin is significantly more likely to be under foreign ownership than that in the southern basin, with 21.9pc of surface water foreign-owned in the north, compared to 5.5pc in the south.
Like its companion register covering land ownership, the Register of Foreign Ownership of Water was established to provide greater transparency about the level of foreign ownership of Australia’s water entitlements.
The report released this month is the first, in what will grow into an annual series. The Commissioner of Taxation will now report annually to the Treasurer on the operation of the Register of Foreign Ownership of Water or Agricultural Land Act 2015, and is required to publish aggregate statistics of foreign ownership each year.
The ATO reports on data from the Register in aggregated format only, and does not identify individual owners.
To calculate the proportion of foreign interests in water entitlements, a benchmark measure of the total water entitlements on issue in Australia was used, taken from BOM’s Water Market Dashboard, which collates Australian water entitlements on issue under the Federal Water Act.