Australia has seen an increase in foreign ownership of its water resources, with Canada, the USA, China, and the United Kingdom emerging as the top foreign holders. 

According to a recent report from the Australian Tax Office (ATO), foreign ownership of Australian water escalated from 4,389 gigalitres (GL) in June 2021 to 4,503 GL in June 2022.

This foreign ownership represents roughly 11 per cent of all water entitlements in Australia. Canada's pension fund, the Public Sector Pension Investment Board (PSP Investments), stands as the largest foreign owner, using Australian water for agricultural purposes.

In detail, Canada holds 2.1 per cent of Australian water entitlements, the USA owns 1.8 per cent, while China and the UK each claim 0.8 per cent. These figures mirror the ATO's previous report in June 2021.

Foreign-owned water is primarily used for agriculture and mining within Australia, and it can also be traded to other water users. 

Over half of the foreign-owned water, approximately 2,320 GL, is concentrated in the Murray-Darling Basin, Australia's largest river network.

Federal Water Minister Tanya Plibersek aims to amend the Water Act, citing the ATO's report as a basis for advocating the Australian government's ability to purchase irrigation entitlements in the Murray-Darling Basin. 

Her proposal entails repurposing water licences for environmental purposes to enhance native habitat.

In the past decade, more than 2,100 GL of water was allocated to the environment in the Murray-Darling Basin, primarily sourced from farming. 

However, an additional 750 GL has been promised for environmental use by June 2024 as part of the Murray-Darling Basin plan.

The issue of Commonwealth buybacks of water remains contentious, with opposition from some states and communities who argue it negatively impacts regional areas. 

Ms Plibersek is expected to introduce her proposed legislation when parliament reconvenes, including amendments to water trading laws to enhance transparency.

While the Coalition previously supported reforms to the water market, it opposes further Commonwealth water buybacks to meet environmental targets in the Murray-Darling Basin. Conversely, the Greens support water buybacks but are against extensions to the Murray-Darling Basin plan. The debate on foreign water ownership and its implications for Australia's agricultural and environmental future continues to unfold.