News Service from House Harris

Fed: Australia a "laughing stock" over Murray-Darling

CANBERRA, May 29 AAP - Australia is fast becoming an international "laughing stock" over its mismanagement of the Murray-Darling Basin, an environmental expert says.

The rescue plan for the country's biggest river system has stalled because of bickering between the states.

Two states are blocking the federal government's $3.1 billion fund to buy up water for the environment.

NSW slapped a ban on buy-outs after a 240 billion litre water sale in the state was announced on Thursday.

Victoria won't allow big buy-outs either.

And NSW is considering joining a South Australian high court action against Victoria over water.

Mike Young, director of the University of Adelaide's environment institute, said the whole water system was now "frozen".

"If we don't fix this quickly we're going to be the laughing stock of the world and we'll have a river which we couldn't manage," Prof Young said.

He said farmers around Deniliquin were ready to sell $70 million of water rights to the government, but the sale was in limbo.

That was bad for the environment and bad for farmers who needed the cash, Prof Young said.

Independent senator Nick Xenophon said the states had shown they could not be trusted to run the basin.

He called on the federal government to take over.

Opposition water spokesman Greg Hunt said the federal government's plan to save the basin was "a shambles".

Federal Water Minister Penny Wong said she was "not happy" with what had occurred.

She said she would continue negotiating with the basin states about removing barriers to water trade and water buy-outs.

The federal government did not want to take over the basin because it would probably mean a long legal dispute with the states, Senator Wong said.

South Australian premier Mike Rann has branded Victoria "recalcitrant" over water.

The Constitution gives states the power to run the Murray-Darling.

The federal government has some power over the basin, and has established a new cross-basin body which will set an overall cap on how much water can be taken out, and divide that up between regions.

But that's some years away and water levels in parts of the basin are very low.