The Treasurer has today released the interim report of the Murray-Darling Basin Water Markets Inquiry carried out by the Australian Competition and Consumer Commission.
“The report is clear and unequivocal about the need for decisive, rapid and comprehensive reform,” National Farmers’ Federation Chief Executive Tony Mahar said.
“The report notes that ‘the Basin’s water rights markets have serious problems that have to be fixed now, to generate more of the potential benefits of water trade’.
“This independent assessment must now be considered and acted upon. There must be a pathway mapped out to meaningful reform of the water market.”
In its report to the Treasurer, the ACCC found the market was poorly regulated and poorly governed.
“It is clear that duplicative and inconsistent rules and processes between Basin states have led to significant information failures which has created potential opportunities for exploitation,” Mr Mahar said.
“This has undermined confidence in the water market.”
The report also cites a ‘disconnect between the rules of the trading system and the physical characteristics of the river system’.
“The market does not sufficiently consider delivery capacity, conveyance losses nor adverse environmental impacts and ultimately, it is farmers, communities and the environment who lose out. This is clear in the communities we have visited and consulted with,” Mr Mahar said.
“We need clear and robust rules and governance in a system that farmers and Basin communities rely on for their livelihood.”
The report also finds that water markets have brought significant benefits to water users and communities across the Basin. The ACCC clearly articulates that the solution is not to dismantle the system, but to reform the system, to provide greater clarity and confidence.
“The ACCC has proposed a number of reform options. The NFF and its members will consider these in detail in developing a response,” Mr Mahar said.
“Ensuring clarity and confidence is that way the water market operates will be a key focus and critical outcome of this process.
“The NFF notes that over 40 reports into the Murray-Darling Basin have now been released.
“By not implementing recommendations to improve the Plan, Governments are perpetuating the pain suffered across the Basin and demonstrating utter contempt for farmers, communities and the environment.
“The first order of business must be the adoption of the 38 Productivity Commission report recommendations.
“We also keenly await the release of the Sefton socio-economic and Water for the Environment Special Account (WESA) reviews currently with the Water Minister,” Mr Mahar said.