In a lively panel session held at the ABARES Outlook 2021 virtual conference, entitled ‘Improving water market outcomes in the southern Murray-Darling Basin’, Mick Keogh, the Deputy Chairman of the ACCC responsible for small business and agriculture, and lead author of a report on the water market recently handed to the Federal Treasurer, alluded to the idea of establishing a water market in Australia akin to the regulatory environment of the Australian Stock Exchange (ASX).
Such a concept would appear to be an excellent way in which to commence the process of both reforming and developing confidence in the Australian water market.
Kookaburra must admit to always having had some reticence about the establishment of a water market in Australia, especially in the Murray Darling Basin, in the first place. Separating land rights from water rights has never seemed like a good idea to Kookaburra. The ensuing wild west water market which has developed with consequences such as farmers watching water flowing passed their irrigation channels, foreign fund managers acquiring enormous amounts of water entitlements, the establishment of high water demand crops very far downstream, irrigators finding their allocations halved, charges being levied for water never allocated, obscure trading arrangements, zero dollar trades of water and other anomalies demonstrate the clear need for reform.
An ASX of water would appear to be a very good place to start – the appointment of an industry regulatory authority, transparent pricing, proper disclosure requirements, registration of brokers, duties to be owed by brokers to their clients, and timely and ready availability of relevant information for market participants, not least of all, farmers, would appear to be just some of the benefits of such a concept.
Let us hope that the Federal Government has the imagination and the courage to pursue such a reform.