The amount of water owned in Australia by foreign interests increased slightly in the year to June 30, 2020, according to the latest edition of the Australian Taxation Office’s Register of Foreign Ownership of Water Entitlements.
The register recorded that, as at June 30, the total volume of water entitlements with a level of foreign interests stood at 4,299 gigalitres, up from 4,113GL in 2019. This meant the estimated proportion of water entitlements with a level of foreign ownership stood at 10.9 percent in 2020, up from 10.5 percent in 2019.
Canadian interests are now the single biggest foreign owners of Australian water entitlements, at 698GL. This is up from just 295GL in 2019.
Chinese, US and UK interests, which occupy the next three places on the top 10 list of foreign investors with water entitlements, all reduced their holdings in 2020 by varying degrees, helping to account for the change. The ATO said there were also changes in the level of foreign ownership of Australian companies that already held water entitlements.
The top 10 countries hold an 83.5 percent share of foreign-held water entitlements. Canadian interests now hold 1.8 percent of the total Australian water entitlement on issue.
Agriculture was the primary use of the water entitlements held by interests from Canada, China, the US, Hong Kong, the Netherlands and Germany. Mining was the main usage for water held by interests from the UK, Switzerland and Belgium, while French interests primarily used the water for industrial purposes.
Western Australia remained the jurisdiction with the highest proportion of foreign-held water entitlements at 22.9 percent, although the vast majority of water there is used for mining.
Queensland was second with 18.8 percent of water entitlements in foreign hands.
South Australia, though, saw the largest year-on-year increase in foreign ownership of water, with the volume of water entitlements held by foreign interests growing by 24.9 percent. There were also significant increases in Victoria (12.0 percent), Tasmania (10.6 percent) and New South Wales and the Australian Capital Territory (6.0 percent).
The amount of surface water entitlements – the type predominantly used for agriculture – that are owned by foreign interests continued to increase in both the northern and southern parts of the Murray-Darling Basin.
The MDB contains the majority of irrigated agriculture in Australia and contains slightly more than 50 percent of the total Australian water entitlement on issue, at 19,740GL (including both surface water and groundwater).
The amount of foreign-held surface water entitlements in the northern MDB increased by 3.7 percent in 2020 after a larger jump in 2019, while the amount in the southern MDB continued a steadier rise, growing by 4.3 percent.
Agriculture is by far the most common use for foreign-held water entitlements.
Western Australia was the only state where agriculture was not the main use for water entitlements, thanks to the predominance of the mining industry there.
The amount of foreign-held water used for agriculture overall increased by 5.4 percent, rising from 2,712GL in 2019 to 2,859GL in 2020.
Some water usage that is officially classified as ‘other’ could also plausibly be considered to be applied to agriculture, as the ATO said it includes water used for dairy farm activities and pasture irrigation for stock feed.
The ATO published a similar Register of Foreign Ownership of Agricultural Land covering the same period to June 30, 2020, in February 2021.