The Australian Competition and Consumer Commission (ACCC) has called for a new independent Water Markets Agency to oversee trading water markets in the Murray-Darling Basin.
Deputy Chair of the ACCC, Mick Keogh said the creation of the new Agency was one of 29 recommendations in the Commission’s final report Murray–Darling Basin water markets inquiry.
“The Murray Darling Basin’s systems and governance have been designed for water management with a focus on important objectives such as protecting the environment and efficiently delivering water through rivers and irrigation infrastructure,” Mr Keogh said.
“However, until now, there has been a lack of attention to ensuring water trading markets are working fairly and efficiently,” he said.
“With an annual average value of more than $1.8 billion per year, water markets in the Murray Darling Basin are now of a scale that warrants serious and focused attention.”
Mr Keogh said that what started as an informal system for transferring water rights between neighbours had grown into a complex set of markets.
“But unfortunately, the normal regulatory framework that would be expected for a market of this scale has not been developed,” the Deputy Chair said.
“A new independent Water Markets Agency, backed by appropriate legislation, should prioritise making markets work for water users, traders and the economy to deliver the benefits of water trade.”
He said many water users didn’t trust that Murray Darling Basin water markets were fair.
Mr Keogh said it was inevitable that this lack of trust would inhibit efficient investment in agricultural production in the Basin, to the detriment of all Australians.
“The ACCC’s recommendations will help to build trust and market efficiency by strengthening market integrity, improving transparency and information, improving trade services and better aligning market rules and arrangements with the physical characteristics of the river system,” he said.
Mr Keogh said the Commission’s recommendations were grouped across four themes which covered governance of the Basin water markets; market integrity and conduct; trade processing and water market information; and market architecture.
The ACCC’s 706-page Report can be accessed at this PS News link.
