Probe on WA water allocation

A shake-up of the State's water policy is imminent as WA Water Minister Bill Marmion flags an auctioning system to replace the controversial first-in first-served water allocation policy.

Mr Marmion this week released a review of the first-in first-served policy for public comment.

The review came just weeks after the Department of Water (DoW) granted Gindalbie Metals a licence to draw five gigalitres of water from Mingenew's Parmelia aquifer.

Mr Marmion said the aim was to modernise the State's approach to water allocation.

"As more of our groundwater and surface water areas come closer to full allocation, and as competition for water increases, this policy is becoming less effective for making sure we get the best value from our water resources," he said.

"The discussion paper proposes several alternatives to this approach but what we want now is wider discussion in the community and among water-use sectors."

The paper suggested market mechanisms when dealing with water resources that had reached more than 70 per cent of their allocation limit.

An auction approach was earmarked as an option when water supplies were stretched.

According to DoW, more than 25 per cent of WA's groundwater resources and 13 per cent of its surface water systems were above 70 per cent allocation. Conservation groups called for the review to be imposed retrospectively, particularly in light of Gindalbie Metals' licence.

The Mid West miner will have access to more than 80 per cent of the water allocation rights to the Tathra sub-area of the Parmelia groundwater aquifer.

WA Greens MLC Alison Xamon said the Gindalbie decision epitomised the flaws in the first-in first-served policy.

"There doesn't seem to have been any consideration of the future of the community who live above the aquifer," Ms Xamon said. "A licence of this magnitude from this aquifer should never have been granted.

"As a result of this decision, the future expansion of agriculture in the region has been hamstrung."

Mr Marmion said Gindalbie's allocation would not change as a result of any reform.

Gindalbie Metals corporate affairs and investor relations manager Michael Weir disputed the claim that Gindalbie's licence would stifle development in the region.

Mr Weir has welcomed the State's policy review.

"We believe the current system is robust and works well, however we welcome the review as long as it treats all industries equally, encourages development, ensures WA's water is used to generate the best economic return for everyone in the State," he said.

Mr Marmion said he wanted to hear from farmers during the public comment period, which runs until October 28.