IT HAS long been clear that the exploitation of water resources in NSW and Queensland is a scandal.

But yesterday's release of what is arguably the bleakest report yet on the Murray Darling Basin makes the magnitude of that scandal even more glaringly obvious.

At a time when inflows into the basin have plummeted to levels that only a few years ago seemed unthinkable, NSW Water Minister Nathan Rees and his bureaucrats are giving irrigators the go-ahead for the most absurd developments.

As the aerial photographs taken in northern NSW last week show, local lands boards are approving more exploitation of the nation's most precious resource in one of the basin's most overallocated catchments.

As the saying goes: a picture tells a thousand words. Even the diversion channels on the property on our front page could hold a couple of hundred megalitres.

Land owner Stephen Seery has been able to transfer licences from the northern Gwydir system, where he could not exploit them, to the Tycannah Creek in the south.

The tragedy is while Mr Seery has a right to harvest the creek's flows, it will further undermine the flows down the Gwydir Valley to downstream users and the environment.

Then there's the issue of Mr Seery and other irrigators harvesting floodwaters that spill from the northern Darling's tributaries each year.

Mr Rees argues his new Floodplain Harvesting Policy will deal with the problem, but it does nothing of the kind.

In fact it looks as though NSW will retrospectively approve floodplain diversion works that undermine the Murray Darling Basin cap on diversions which it signed in 1995.

The facts are: floodplain harvesting is unmeasured and ineffectively regulated in NSW.

Real floodplain harvesting reform will take strong leadership and a major investment of resources, but NSW has a paucity of both when it comes to water.

NSW has been more than willing to nod its head in agreement with new deals to revive the basin.

But those agreements are not leading to any real on-ground action in NSW which, in turn, undermines the Federal Government's push to revive the basin.

Without strong commitments from NSW, the Federal Government's investment of $3.1 billion in buying water from irrigators could become an enormous waste of taxpayers' money.