Concerns Murray reforms could be weakened

Tom Rabe
AAP

A report into alleged Murray-Darling water theft has raised concerns the NSW government will dilute reforms designed to remedy "longstanding problems" in the system.

The Independent Investigation into NSW Water Management and Compliance - authored by Ken Matthews - was released on Thursday, two months after an interim report set out a list of recommendations to "restore health to the system".

While the report praised the government's willingness to accept a diagnosis of "serious shortcomings" in the state's water management, it said the recommendations set out to remedy them were at risk of delay.

Amid allegations of wide-spread water theft in the Murray-Darling and mismanagement in how the area was regulated, the state's top water bureaucrat was forced to resign in September.

NSW Department of Industry director general Gavin Hanlon was secretly recorded in a teleconference, aired on the ABC's Four Corners, promising to share internal government documents with irrigation lobbyists in 2016.

But Thursday's final report also revealed a second senior executive was fired from the department for their role in the misconduct - including being involved in the teleconference.

"This executive had allegedly been involved in certain events reported in the Four Corners program, including the teleconference," Mr Matthews said in his report.

The report comes less than a week after both NSW and Queensland were slammed by a Murray-Darling Basin Authority (MDBA) review into water theft and regulation.

That inquiry found both states regularly failed to make sure irrigators complied with the Murray-Darling Basin Plan, and weren't transparent about their failures.

A day after the MDBA report was handed down, South Australian Premier Jay Weatherill announced a royal commission into water theft in the basin.

Mr Matthews is concerned aspects of his reform package could be watered down or delayed due to the number of recommendations.

He also said he was disappointed that decisions still haven't been made about whether to proceed with prosecuting several alleged cases of noncompliant irrigation activities.