Australia splashes $12 bln to secure water supplies

By James Grubel

CANBERRA (Reuters) - The Australian government outlined plans to secure water supplies and repair ailing rivers on Tuesday, to protect the nation's drought-hit food bowl, which produces about A$22 billion ($21 billion) worth of food exports.

The A$13 billion 10-year water plan includes A$3 billion to buy river water back from irrigators in the Murray-Darling River basin, which produces 41 percent of Australia's agriculture, as well as money to secure water for the nation's thirsty cities.

"Water shortages are a serious threat to our economy and way of life," Climate Change Minister Penny Wong said on Tuesday.

"We can, and we must, make better use of our available water resources," Wong said.

Australia, the driest inhabited continent on Earth, has been suffering more than seven years of drought, with water inflows into the nation's rivers at record lows and farmers facing tough restrictions on irrigation.

The drought has also had an impact on cities, which are home to bulk of Australia's 21 million people, with strict restrictions on watering gardens and most cities banning people from using a hose to wash their cars.

In March, authorities said inflows into Australia's largest river, the Murray, doubled over the past year, but were still only about 25 percent of the long-term average, with the lakes near the river's mouth described as in grave condition.

Without major winter rains, irrigators face the possibility of receiving no water allocations as river managers keep water for environmental flows and to secure drinking water for towns and cities along the river system.