26 September 2023

River water report rocks the boat

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Water markets in the Murray-Darling Basin need major changes to allow for open, fair and efficient water trading, according to a new interim report from the Australian Competition and Consumer Commission (ACCC).

The Commission said its report, Murray–Darling Basin water markets inquiry Interim report, found that the $1.5 billion-a-year basin water markets had outgrown the frameworks that governed them, with change needed for the market to operate efficiently and for the benefit of industries that depended on it.

Deputy Chair of the ACCC, Mick Keogh said water trading had brought substantial benefits to water users across the Murray-Darling Basin.

“However, these markets have significant problems,” Mr Keogh said

“In basic terms, there is overly fragmented or complex regulation in some areas, not enough regulation in others, and a concerning lack of regulatory oversight and robust enforcement in important areas,” he said.

“This has led to a lack of trust in the markets among many water users and has undoubtedly reduced the benefits generated by those markets.”

“These problems exacerbate distrust when water is scarce or when demand is increasing. They make a difficult situation worse.”

Mr Keogh said the ACCC had identified problems in several key areas, particularly with the current governance arrangements for the Basin’s water markets.

“A significant issue is that a range of different bodies oversee water markets in the Basin under different legal frameworks,” he said.

“Roles and responsibilities overlap in some areas, while leaving significant gaps in others.”

He said the Commission’s interim report also found the integrity of the markets must be improved; lack of transparency was compounding problems; and trade rules may not reflect physical constraints.

ACCC’s 542-page interim report can be accessed at this PS News link.

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