28 May 2021

Key messages:

• Findings from the ACCC report include:

  • Farmer’s water assets make up about 40% of their farm asset base
  • Water markets allow farmers to sell excess water, to secure extra water, and to free up capital for expansion or development
  • Water markets provide increased flexibility for industry transition and farm succession
  • MDB water markets are extremely complex. The result is considerable uncertainty and sovereign risk
  • Market information is fragmented, incomplete, and neither timely nor comprehensive
  • Market deficiencies are resulting in a lack of trust in the fairness of markets
  • The ACCC did not find evidence that investors exercised market power or manipulated prices
  • Poor quality public data contributes to misconceptions, misinformation, and low market confidence

• Recommendations from the ACCC report include:

  • Create a Water Markets Agency focused on market regulation and surveillance, market information, market evaluation, and market advice and advocacy
  • Improve inter-zone trade processes
  • Implement common water markets data standards
  • Establish a Water Market Education Program
  • Introduce centralised Basin-wide market conduct and integrity legislation, including a mandatory industry code for intermediaries (including water brokers)
  • Comprehensive reporting requirements and digitisation to support market surveillance
  • Improve transparency of allocation decisions, and communicate plans for managing shortfalls
  • Strengthen metering and monitoring, and improve modelling of use, delivery and trade
  • Clarify rules for delivery of environmental water

• Victoria’s perspective includes:

  • No evidence of market manipulation or other market misconduct
  • The recommendations are consistent with the principles that have underpinned water market development in Victoria
  • Implementation and funding need to be sorted out – around 90% of the ACCC recommendations require coordination and unified action of the Basin states
  • The ACCC report recognises Victoria’s leading position in water markets
  • The priority is for tangible action now that will make a difference for water users
  • Expand the annual Victorian water broker audit to form the basis of government-backed accreditation
  • Strengthen metering across the Basin

For more information, watch the webinar recording above, visit the ACCC website, or contact [email protected].

Previous webinars:

Securing your future water needs: Harnessing carryover and other water products

Goulburn to Murray trade and Murray delivery risk

Understanding and managing water price variability on farm webinar recording