Former Australian Federal Police Commissioner Mick Keelty was hand-picked by the federal government to inquire into Basin water sharing arrangements.

Mr Keelty, the Interim Inspector General for the Murray-Darling Basin, was appointed after angry NSW and Victorian irrigators converged on Canberra, last year, in the Can-the-Plan rally.

"The most telling finding is the dramatic reduction in inflows that have been experienced in the River Murray system over the last two decades or so," Mr Keelty said in his report.

"This remains the primary driver of reduced water availability, and there is little anyone can do to influence when and how much it rains."

He said since the establishment of the Murray-Darling Basin Agreement more than a century ago, water-sharing agreements between the states had worked effectively, with the flexibility to adapt to inevitable dry times.

"This includes modifications made to the Agreement following the Millennium Drought to better ensure against very dry sequences.

"However, there is very little clarity and transparency about how this flexibility (especially through Special Accounting) is delivered, or how much water states are being allocated each year under the Agreement."

Mr Keelty found natural river flow regimes, in the Basin, were highly variable, from year to year.

"The past two decades or so have seen a marked change in the volume of water available in the system," he said.

"Analysis shows that the median annual inflow over the past 20 years is approximately half that of the preceding century.

"More significantly, the frequency of drier years is also much greater."

Between 1895 and 2020, half the driest 10 per cent of years had occurred in the past 20 years.

"The pattern of such dry years occurring back-to-back is also not observable to the same extent at any other time before 2000," Mr Keelty said.

Among his recommendations, Mr Keelty said the Murray-Darling Basin Authority should undertake further analysis of the causes of reduced inflows, from the northern Basin, and the extent to which that was affecting state water shares.

It should also provide more transparent reporting about water accounting, including state allocations and water that is allocated but not used.

Mr Keelty also recommended that the Basin Officials Committee (BOC), which advises the ministerial water council:

Former Water Minister David Littleproud asked Mr Keelty to inquire into the impact of changing distributions of inflows into the southern Basin, on state shares under the Murray-Darling Basin Agreement.

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Me Keelty was also asked to report on consequential impacts on state water shares, resulting from the reserves, required under the Murray-Daring Basin Agreement.

"We set about that task by conducting eight 'town hall' meetings in various locations across the Basin, attended by approximately 1,000 people in total," he said.

"We also interviewed 80 people and our website received 345 submissions."

Mr Keelty said the stress and anguish of irrigators was palpable when he met with some of the people who helped contribute substantially to the Australian economy through the production of food and fibre, as well as recreation and tourism.

"Beyond the mental and emotional toll of severe and extended drought, many people are wondering about the viability of their businesses if current conditions continue.

"Many are worried about the future for their families, feeling that they are failing previous generations who gave them the opportunity to be farmers and irrigators."

There remained legitimate concerns, among stakeholders, about whether too much water was being lost in the operation of the River Murray system.

"However, it is evident that there are established arrangements and processes in place to support the system's efficient operation and hold operators accountable," he said.

"But improved transparency on river operations-and further work to investigate the impact of pressures such as expanding horticultural development downstream-must be delivered quickly to give greater confidence for the future."

While stakeholders had wide-ranging and often significant concerns, their views sometimes differed.

"It was also observable that stakeholder perceptions were frequently at odds with what the inquiry heard from states and agencies with responsibilities in the Basin," he said.

"This highlights the challenge that remains in communicating the right information to Basin communities effectively.

Improving the transparency, accessibility and availability of information-as well as people's ability to interpret and understand it-needed to be a focus.

"The differing perceptions also point to a deficit in trust and confidence in Basin management," he said.

"There is an opportunity for all parties to demonstrate greater unity and leadership, which will be essential if future challenges are to be met successfully."

Mr Keelty said a common theme was the release of water for the environment, to irrigators.

But Mr Keelty dismissed perceptions environmental water licences had been treated differently to irrigation licences.

"The Commonwealth environmental water holdings are comprised of exactly the same types of entitlements that are held by irrigators," he said.

"In times of drought, the delivery of environmental water is scaled back and focused on maintaining key refuges ... the suggestion that environmental water is given up for irrigation in times of drought implies that the environment does not need water during a drought.".

Water Minister Keith Pitt said he accepted all five key recommendations and had directed his department, and the MDBA, to implement them.

"Mr Keelty's inquiry focused on the water-sharing arrangements in the Murray-Darling Basin and how they work with state water allocation policies," Mr Pitt said.

"This report reinforced the need to improve the transparency, accessibility and availability of information about Murray-Darling Basin water matters," he said.

"It's important to remember that this is one of three key inquiries that together will help guide Commonwealth and state governments' policies around the management of the Murray-Darling Basin.

"The others are the Sefton Report into socio-economic circumstances among Basin communities and the ACCC inquiry into the water market," Minister Pitt said.

Mr Keelty would explain his findings to any community members who are interested through an online webinar.

The government would soon respond to the findings and recommendations of other reviews into the Murray-Darling Basin on separate, but related issues.

MDBA chief executive Phillip Glyde welcomed the report.

"We cooperated fully with Mr Keelty's team and provided them with data and facts as they requested," Mr Glyde said.

"They challenged us rigorously, and subsequently found that as river managers, we are doing a good job.

"We know some irrigators will feel disappointed that the report has not unearthed any new water for communities doing it tough because of the drought," he said.

"However, it does show that every drop is accounted for and is made available to the state governments to manage and allocate according to their rules."

He said the MDBA had been working hard to increase the transparency and accessibility of water management information.

'We know there is always more that can be done," he said.

"We will work with Basin governments as the Interim Inspector-General has recommended, so people can get the information they need and want. "

The MDBA had also commissioned the CSIRO to model possible climate scenarios that we could face by 2050 in the northern and southern Basin.

"This research will help us all to understand better what changes are required to ensure we all have a sustainable future," Mr Glyde said.

Read more:

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Littleproud commits to a review of the Murray Darling Basin Agreement

Littleproud still wants states to join the water review "dance"