Murray-Darling Basin plan: what Labor’s new ‘breakthrough’ laws mean for the environment and communities

After years of gridlock there was a breakthrough this week for the Murray-Darling Basin plan.

The parliament passed legislation that extends the timeframe for delivering the plan by three years and removes a cap on water buy-backs that was introduced by the previous Coalition government.

Related: Labor and Greens reach deal on Murray Darling Basin plan for 450 gigalitres of environmental flows

The passage of the “restoring our rivers” legislation followed months of negotiations by the environment and water minister, Tanya Plibersek, and was hailed by supporters as delivering critical safeguards to support the health of the river system.

What is the legislation?

The Murray-Darling Basin is Australia’s largest river system covering more than 1m sq km. The Murray-Darling Basin plan was introduced by the Gillard government in 2012. It aims to bring the basin back to a healthy and sustainable level by limiting how much water can be extracted and by restoring environmental water flows by 3,200 gigalitres a year.

Under the former Coalition government, the plan had gone off track.

Plibersek’s legislation was introduced after an audit found the plan would probably fall about 750GL – about 1.5 times the volume of Sydney Harbour – short of its total of 3,200GL by the deadline of June 2024.

About 315GL of the shortfall is due to major water saving projects either running late or failing to materialise. The legislation says states responsible for this infrastructure should deliver the infrastructure by 2026.

The legislation extends a deadline for the recovery of 450GL a year of environmental water to ensure flows to South Australia to 2027. It also lifts a cap on buy-backs to allow the government to purchase more water for the environment.

What did the government agree to?

To secure passage of the bill, Plibersek negotiated a series of amendments with the Greens and independent senators David Pocock, Lidia Thorpe and David Van to strengthen it.

The deal with the Greens gives an assurance in the legislation that the 450GL a year of water for the southern basin will be recovered by 2027. It gives the government the power to cancel water projects that are found to be unviable. It also creates more flexibility in how the government can recover water for the northern parts of the basin.

Plibersek also agreed to include an option to allow irrigators to lease their water entitlements to the government, rather than selling their licence outright. Plibersek has committed to an additional $50.5m for the health of the Upper Murrumbidgee and to boost funding for the Aboriginal Water Entitlement Program to $100m. She also agreed to make an annual statement about the ways she has considered social and economic impacts for communities in decisions about water buy-backs.

How did people respond?

This is the largest and most challenging piece of legislation Plibersek has negotiated in her portfolio. After the bill passed on Thursday she described it as “a historic day for the Murray-Darling Basin and the communities, industries, farmers, First Nations groups and environment that rely on it”.

The Greens called it a “breakthrough” for the environment and more than 2.3 million Australians who depend on the Murray-Darling for drinking water and food.

The Murray-Darling Conservation Alliance, which represents close to half a million supporters across all basin states, hailed the legislation as a lifeline for the river system on the brink of the next drought.

Related: Irrigators overdrew 40,000ML of water from NSW rivers, audit finds, as farmers protest buy-backs

“For the last decade it’s been incredibly frustrating having to justify and defend the inclusion of the 450 gigalitre component of the Murray-Darling Basin Plan,” said Craig Wilkins, the chief executive of the Conservation Council of South Australia.

“We always knew it was essential, and it’s exciting to see this bill finally guarantee its delivery.”

Who has raised concerns?

But the legislation has not been welcomed by everyone.

The opposition water spokesperson, Perin Davey, said buy-backs would put pressure on regional communities and the government had not done enough to assess what the social and economic impacts of water buy-backs would be.

The National Irrigators Council said the legislation would “drive a wedge into the heart of Basin communities” and said there were still unanswered questions about its costs and impacts, particularly for regional communities. The council called for more detail on how government agencies would implement the final stages of the plan by utilising other options for water recovery to avoid further buy-backs.

But other advocates have highlighted support for the bill in regional communities.

A poll by the Australia Institute found 63% of regional Australians supported buy-backs.

Menindee farmer and Australia Institute researcher Kate McBride said it was unfortunate lobby groups had criticised buy-backs when many regional Australians supported them. She said a larger conversation was needed about regional economies.

“Regional decline is a massive problem but pointing the finger at buy-backs ignores the fact that this decline is country-wide,” she said.