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ACCC trading review released

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After 18 months the long awaited ACCC review into Australia’s unregulated water markets has been released.

According to the Australian Competition and Consumer Commission, Australia’s $2 billion water market needs a major overhaul.

Water trading

Over the past two decades water trading has evolved into a complex, Basin-wide set of markets with an annual average value of more than $1.8 billion.

Affordable and reliable water is a key priority for Australian food and fibre producers.

The last two decades have seen significantly reduced water availability for food and fibre producers through a range of factors in government buybacks, reduced inflows, river management decisions and increased competition for our most precious resource.

Under the government lead water reforms, water trading is mostly unregulated, not even requiring an ABN to trade water.

“There is no law against market manipulation in the Murray-Darling Basin water markets,” ACCC deputy chair, Mr Keogh said.

“So, it’s not illegal, even if it is occurring.”

In Australia we now have multinational corporates, foreign buyers and the big end of town able to buy, trade and, in some instances, remain capital gains tax free as they bid for water against Aussie food and fibre producers.

The ACCC’s report identified the following problems:

• there is a lack of quality, timely and accessible information for water market participants
• there are scant rules governing the conduct of market participants, and no particular body to oversee trading activities, undermining confidence in fair and efficient markets. In particular, water market intermediaries such as brokers and exchange platforms currently operate in a mostly unregulated environment, resulting in a lack of clarity regarding the role brokers play and permitting undisclosed conflicts of interest to arise
• trading behaviours that can undermine the integrity of markets, such as market manipulation, are not prohibited, insider trading prohibitions are insufficient, and information gaps make these types of detrimental conduct difficult to detect.

Even with this latest report, how do mum and dad food and fibre producers have confidence that the politicians will act? We still have consecutive governments cherry picking legislation and interpretation of legislation. For example, the national water register called for in 2004 National Water initiative among other requirements like water tagging and conveyance loss.

The ACCC report is the latest in a long line of reports that identify huge failings within the past two decades of Australia’s largest water reforms.

The Koondrook and Barham Bridge Newspaper 8 April 2021

Federal Water Minister, Keith Pitt, has not committed to a timeframe for implementing the ACCC’s reforms.

This article appeared in The Koondrook and Barham Bridge Newspaper, 8 April 2021.

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