Federal political systems provide a greater diversity of options for political action than do unitary systems. Discussions about federalism usually focus on the dynamics between the states and the national government. However, much of the action within federal systems reflects tensions between states and the behavior of stakeholders moving between the levels of government, depending on how they perceive their interests and opportunities.
For example, the place and role of South Australia is central to the history of cross-border water sharing in the Murray system. For South
Australia at the end of the system, the very existence of the state depends on access to flows in the River Murray, so it has persistently used its leverage within the national government to ensure that its interests are taken into account. It is no accident that since federation a disproportionate number of the national government ministers responsible for policy affecting the River Murray have come from that state. South Australia has long been a strong advocate of total catchment management in its various forms, arguing that the environmental health of the lower lakes and estuary should be the yardstick for effective river management. This has intensified conflicts with the upper states as development pressures have increased throughout the catchment.
The growing focus on whole-of-catchment management has fueled debates about priorities. Traditionally, promoting irrigation along the Murray corridor and "drought proofing" the towns and cities of South Australia have been the major goals. The institutional reforms of the 2000s were aimed at more comprehensive management designed to take account of a greater range of stakeholders and the need for long-term sustainability. However, the irrigation sector has worked very effectively to protect its interests. The original intention was that water markets would operate across more than the irrigation sector, but this proved difficult to achieve. Ambitious and well-funded national government plans to restore environmental conditions by water purchases from willing sellers at market price have increasingly been stifled by the irrigation sector operating at state and national level. In the same way, attempts to improve the water security of the major cities of Adelaide and Melbourne by water purchases in the MDB have been blocked by opposition from irrigation-based communities. Instead, both cities have built multibillion-dollar desalination plants even though the water needed is only a very small percentage of the volumes currently being diverted for agriculture in the MDB.