The Federal Government is investing $31.6 million in “once-in-a-generation” water market reform, prioritising trust and transparency for farmers and industry.
The reform will update and improve how buyers and sellers trade and sell water licences.
The funding will implement the Water Market Reform: Final Roadmap Report – which will improve the functioning and governance of water markets and improve overall confidence.
The Reform Roadmap recommendations are split into four sections: Integrity and transparency, Data and systems, Market architecture and Governance.
The funding includes:
- $12 million over four years to the Australian Competition and Consumer Commission (ACCC) to regulate water market conduct
- This will ensure the ACCC can enforce the new mandatory code of conduct for water market intermediaries and enforce new market misconduct prohibitions
- $9.1 million over four years for the Inspector-General of Water Compliance to regulate market data
- This will ensure enforcement of new water markets data requirements, which are critical to the success of the new integrity safeguards. The ACCC found that lack of information was a major barrier for transparency and compliance with existing laws
- $9.4 million over four years for the Department to implement the roadmap recommendations
- This includes drafting necessary legislative amendments and preparing new legislation for the whole suite of water market reform measures
In addition, the Bureau of Meteorology will receive funding of $1 million to scope the development of a National Water Data Hub which will improve national water information to provide industry with quality, timely and consistent data.
Water markets have become increasingly important as irrigation increases, water reliability falls, and the differences between high and low flows across the Basin become more extreme.
This investment will strengthen the Murray-Darling Basin water market and will enable greater checks and balances. This will also aid delivery of the Basin Plan.
The Australian Government will prioritise working collaboratively and cooperatively with Basin jurisdictions to achieve these commitments.
Federal Minister for the Environment and Water, Tanya Plibersek said the reforms will deliver trust and certainty to irrigators and industry.
“Water markets reform will crack down on the cowboys of the system, and make sure it’s a level playing field for those doing the right thing,” Ms Plibersek said.
“Our investment of $31.6 million to deliver water market reform will go a long way to improve integrity, prohibit market manipulation and provides us with avenues to deal with instances of insider trading.
“As an example, the integrity reforms will include: prohibiting market misconduct, introducing a mandatory code for water market intermediaries, introducing mandatory rules and processes for water announcements and broadening and strengthening price reporting obligations.
“I look forward to working in collaboration with state and territory Basin Ministers to deliver this reform.”
The Australian Water Brokers Association (AWBA) said they have actively supported and advocated for positive and proactive change in the regulation of all Australian Water Markets for several years.
“Increased transparency and increased market confidence for the benefit of all water market participants has been at the core of the AWBA goals,” a spokesperson for the AWBA said.
“The current funding announcements by the Federal Government are welcomed by the AWBA as a timely and critical step after over three years of water market inquiries, commencing the actual regulatory and system changes necessary to meet those goals.”
