Federal Labor is demanding to know whether Prime Minister Scott Morrison is confident that $80 million worth of water purchases under the Murray-Darling Basin are above board.
Labor Leader Bill Shorten on the election campaign trail in Melbourne said this was the nation's most expensive water purchase but questions have been raised over its probity.
"Our river system is stuffed and it is stuffed because this is a government who hasn't had a plan to look after the whole of the river basin," Mr Shorten told reporters.
"It has played favourites. It has pursued particular commercial agenda and as a result, Australia's mighty Murray-Darling is on the critical list."
Greens senator Sarah Hanson-Young is writing to the Auditor General requesting an urgent audit into all purchases signed off by former minister Barnaby Joyce.
"The Auditor has a responsibility to investigate how $80 million of taxpayers money was paid for water that doesn't exist," the senator tweeted on Saturday.
"We need a Royal Commission. #watergate".
But Liberal campaign spokesman for the 2019 election, Simon Birmingham said a royal commission is not necessary.
He said a 2020 review is already legislated under the the Murray-Darlling Basin plan.
"So that review will take place next year as is already required," Senator Birmingham told ABC television.
The $80 million purchase in question is understood to be the largest ever.
Senator Birmingham explained as the drought hit, there has been increasing volumes of water purchased and "unsurprisingly" prices have gone up.
"It is not a surprise in the last couple of years you would be paying more for water licences in a condition where the market has tightened and the availability of water is less," he said.
