Minister for Sustainability, Environment, Water, Population and Communities, Tony Burke, today announced his intention to make amendments to the termination fee rules applying in the Murray Darling Basin to allow operators to add GST to termination fees.

"These rules will ensure that the termination fee rules provide a reasonable balance between investment certainty for operators and flexibility for irrigators," Mr Burke said.

The termination fee rules came into full effect on 1 September 2009 and provide a uniform approach across the Murray-Darling Basin to setting termination fees.

Under the Water Act 2007, the Minister is required to obtain and have regard to advice from the ACCC on making or amending water charge rules, including the termination fee rules.

"I have accepted advice from the ACCC recommending amendments to the termination fee rules to allow operators to recover GST from irrigators," Mr Burke said.

Terminating irrigators can claim GST paid on termination fees as an input tax credit, providing they are registered for GST and the GST claim is related to their business activities.

The Water Regulations 2008 require the Minister to issue a notice of intention at least four weeks prior to formally making the amendments.

Further information regarding the termination fee rules including the amendments, a summary of the amendments, and the ACCC's advice can be found at www.environment.gov.au/water.