Water from the Murray-Darling basin to be sold off

WATER across Australia's largest river basin, the Murray-Darling, will be sold off to irrigators and traders as the Abbott government moves to capitalise on its water holdings.

The previous Labor government bought more than $3 billion worth of water in the basin, under an initiative to protect environmental flows in the basin.

But the Abbott government on Monday revealed it has opened the 1700GL of water it owns to trading, while also opening an initial tender for the sale of 10GL in the Gwydir Valley.

While the trading laws have been in place since 2007, they were not used by the previous government.

Parliamentary secretary for environment Senator Simon Birmingham said the Gwydir tender was the first sale of Commonwealth water holdings.

"It is the government's expectation that water trading should boost both environmental outcomes and agricultural production, providing a true win-win result," he said.

"Even though the Water Act 2007 has always allowed for trading to occur, Labor's water policy saw too many non-strategic purchases of water and a static, stagnating portfolio.

"The Coalition has made the realisation of the benefits of trade an early priority."

After some scientists and irrigators have questioned the environmental value of Labor's buybacks, Sen Birmingham said the allocation sales would only sell water now needed to meet the environmental needs of the basin.

Last year, the Abbott government capped those buybacks at 1500GL, after the previous government bought more than 1100GL from irrigators in the basin.