Integrated management of surface water and groundwater can provide efficient and flexible use of water through wet and dry periods, and address the impacts of water use on other users and the environment. It can also help adaptation to climate variation and uncertainty by means of supply diversification, storage and exchange. Integrated water management is affected by surface water and groundwater resources and their connections, water use, infrastructure, governance arrangements and interactions. Although the Murray–Darling Basin is considered to be a leading example of integrated water management, surface water and groundwater resources are generally managed separately. Key reasons for this separation include the historical priority given to surface water development, the relative neglect of groundwater management, shortfalls in information about connections between groundwater and surface water and their impacts, gaps and exemptions in surface water and groundwater use entitlements and rules, coordination problems, and limited stakeholder engagement. Integration of surface water and groundwater management can be improved by the establishment of more comprehensive water use entitlements and rules, with extended carry-over periods and legislated rules for aquifer storage and recovery. Collective surface water and groundwater management offers greater efficiency and better risk management than uncoordinated individual action. There are opportunities for more effective engagement of stakeholders in planning and implementation through decentralized catchment scale organizations.

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