Budget puts billions up for grabs for regional dam building

BILLIONS of dollars are up for grabs as the Federal Government opens the floodgates to encourage regional Australia to build dams.

Deputy Prime Minister Barnaby Joyce said the scheme slated to begin in July would drive the development of 60 projects across the country, including those in Central Queensland.

As Central Queensland continues to suffer following the collapse of coal prices, the government believes agriculture could help take its place.

An extra $9.5 million will be added to a fund investigating which water infrastructure projects can be built in northern Australia.

The best of those may then be funded by discounted federal government loans.

"Water is the most basic input for life - and a critically important resource for our farmers," Mr Joyce said.

"Where there is water, there is wealth and dams are a bank."

The National Water Infrastructure Fund is already brimming with $500 million to support the building of dams, pipelines and other key water projects.

The goal of the plan is to deliver cheaper water to rural and regional areas in a bid to grow the communities.

The money will be used to fund at least 25 studies into water projects. At least five of those are to be built in northern Australia.

The government is offering Queensland and other states and territories $2 billion in loans specifically for major water projects.

"Water infrastructure is sorely needed across the country as we transition the economy away from mining towards more diverse sectors," Mr Joyce said.

"Agricultural exports are already playing an increasing role in our nation's economy and prosperity - with rural exports overtaking coal to become our second-largest export after iron ore."

States and territories would be expected to pay only the interest on the loans for five years, before then having 10 years to repay the debt in full.

Department of Agriculture budget papers described the plan as one that would help build "a more profitable, more resilient and more sustainable agriculture sector".

Central Queensland developments could be in line for a boost after Prime Minister Malcolm Turnbull discussed the Rookwood and Eden Bann weirs as being important to northern Australia.

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