ACCC issues draft advice for water planning, management charge rules

The Australian Competition and Consumer Commission today issued its draft water planning and management charge rules and draft advice to the Minister for Climate Change and Water, for public consultation.

"State governments undertake water planning and management activities to establish and define water rights and manage the environmental impact of water use. Governments recover some of the costs incurred through environmental levies, licence fees and a range of other charges," ACCC Chairman, Mr Graeme Samuel said.

The proposed rules would require state government departments or agencies to publish details of water planning and management charges. The ACCC also intends to collect data and report annually on water planning and management activities, costs and cost recovery from users. Under the Act, the ACCC does not have power to collect some of this information so will rely upon cooperation from states.

"The ACCC's report will promote transparency and facilitate comparisons of approaches to water planning and management across Basin states and territories. It will help water users understand why they pay water planning and management charges, and policy makers to assess the impact of different charges on the water market," Mr Samuel said.

A copy of the draft rules and draft advice, which includes details on how to make a submission, will be available from the ACCC website. Submissions should be provided to the ACCC by 5 p.m. on Friday, 5 June 2009.

This will be the final opportunity to inform the ACCC's development of the water planning and management charge rules before preparation of final advice to the Minister for Climate Change and Water.

The Water Act 2007, which came into effect on 3 March 2008, creates new functions for the ACCC.  These functions include the development of water charge rules and water market rules for consideration by the Minister for Climate Change and Water; and for the ACCC to monitor compliance with and enforcement of these rules.  The Act also allows for the ACCC to advise the new Murray Darling Basin Authority on water trading rules.

The Minister, Senator Penny Wong, has requested that the ACCC develop advice on water market rules and water charge rules.  This draft advice relates to rules applying to charges levied to recover the costs of water planning and water management activities. 

Water planning and water management activities provide benefits to water users by defining rights to water and establishing a resource management framework. They are undertaken to ensure the long-term sustainability of the water resource, and may also manage negative external impacts of the use of water on the environment and on other users.

Under the National Water Initiative, Basin jurisdictions committed to adopting consistent approaches to pricing and attributing the costs of water planning and water management activities and to implementing a user pays approach to cost recovery for water planning and management. The Act incorporates these National Water Initiative commitments as the Basin water charging objectives and principles. The water charge rules must contribute to achieving the Basin water charging objectives and principles.