Federalism and Water Management in Australia: Unintended Consequences in the Murray-Darling Basin

The history of river management in Australia’s Murray-Darling Basin demonstrates the effective limits of political and financial power in a federal system. While the financial power rests overwhelmingly with the federal government, state governments with greater knowledge and administrative capacity have pursued their own different goals. Backed by a funding package of over $12 billion Australian over ten years the federal government is currently implementing a comprehensive Basin Plan. This involves not only a shift in responsibility for high level policy to the national government but also an attempt to make river management sustainable from a basin-wide perspective The Council of Australian Governments has unanimously agreed that reform is needed but the proposed policy and institutional changes introduced by the federal government are being widely resisted by state governments . This chapter places the current debate within its historical context and discusses a new set of institutional arrangements that are emerging unplanned and unintended but which could prove quite robust and moderately effective.