Foreign ownership of Australian water: 2021 statistics

The amount of water entitlements that are at least partly owned by foreign investors has increased slightly again in the year to June 30, 2021, following similar small increases in previous years.

The latest edition of the Australian Taxation Office’s Register of Foreign Ownership of Water Entitlements, published by the Foreign Investment Review Board, showed that the total volume of water entitlements with a level of foreign ownership increased from 4,299GL in 2020 to 4,389GL in 2021. The percentage of foreign-held water now stands at 11.0 percent, up from 10.99 in 2020.

The top four owners of water entitlements by country are Canada with 2.0 percent of the total Australian water entitlement on issue, the US with 1.6 percent, China with 1.5 percent, and the UK with 1.0 percent. In 2020, the same four countries topped the list, but with China in second place and the US in third.

Of the 4,389GL of water entitlement in foreign hands, 71.4 percent of it is held by the top 10 countries that invest in the asset class. The list is rounded out by France, Hong Kong, the Netherlands, Germany, Belgium and Switzerland.

As in 2020, agriculture was the primary use of the water entitlements held by investors from Canada, China, the US, Hong Kong, the Netherlands and Germany. Mining was the main use for water held by interests from the UK, Switzerland and Belgium, while French interests primarily used the water for industrial purposes.

Among all investors, 65.3 percent of foreign-held water entitlement was used for agriculture, followed by mining on 23.8 percent, industry on 5.7 percent, and ‘other’ at 5.2 percent.

Western Australia remains the jurisdiction with the highest percentage of foreign-held water entitlement, at 23.3 percent, although most of the water there is used in the mining sector. Queensland is next, at 18.0 percent, with South Australia third on 10.5 percent.

The Northern Territory saw the largest year-on-year percentage increase of water in foreign hands, rising by 18.8 percent, albeit with far lower volumes of water entitlement available.

In the Murray-Darling Basin, an area spanning New South Wales, the Australian Capital Territory, Victoria, Queensland and South Australia, which contains slightly less than 50 percent of the total volume of Australian water entitlement on issue (both surface and groundwater), foreign investors own a share of 11.3 percent of the total.

This is most pronounced in surface water in the northern MDB, where foreign-held entitlement is 29.6 percent of the total entitlement on issue, falling to 5.8 percent in the southern MDB. These figures have both fallen by a little over 1 percent year-on-year.