The Australian Competition and Consumer Commission today issued its position paper seeking submissions on the development of rules for charges for water planning and water management activities, under the Water Act 2007.
The Water Act 2007, which came into effect in March 2008, creates new functions for the ACCC.These include the development of water charge rules and water market rules for consideration by the Minister for Climate Change and Water, Senator Penny Wong; and for the ACCC to monitor compliance with and enforcement of these rules.
The water charge rules are an important component of the Water Act 2007, and will contribute to the sustainable and efficient management of water resources in the Murray-Darling Basin.
This position paper relates to rules applying to charges levied to recover the costs of water planning and water management activities. The rules aim to facilitate pricing transparency and improved information reporting about water planning and management activities, costs and charges.
Water planning and management activities benefit users by defining rights to water and establishing a resource management framework, to ensure the long-term sustainability of the water resource.
The ACCC proposes to develop enforceable rules to require the publication of water charge information and voluntary model rules for reporting on water planning and management activities and costs (including any associated charges).
"Establishing a set of water charge rules that apply to all Basin jurisdictions' water planning and management charges will assist the development of water markets by sending clearer pricing signals," Acting ACCC Chairman, Dr Michael Schaper, said today. "When users understand the costs of the activities associated with the planning and managing of water resources they can make better decisions about the water they use."
“This will also mean that users and the general public have better information about water planning and management activities, which are funded through water charges and general taxation.”
The ACCC does not propose to make price determinations for water planning and management charges now, given the limitations on its power to regulate water planning and water management costs under the Act and the current variety and scope of cost recovery arrangements across Basin jurisdictions.
Under the National Water Initiative (NWI), Basin jurisdictions have committed to adopting consistent ‘user pays’ approaches to pricing and attributing the costs of water planning and management activities. The Act incorporates these NWI commitments as the Basin water charging objectives and principles, and the water charge rules must contribute to achieving these objectives and principles.
A copy of the position paper, which includes details on how to make a submission, is available from the ACCC website. Submissions should be provided to the ACCC by 5 pm on Friday, 27 February 2009.
The ACCC will also issue draft advice and draft rules in April 2009, which will be open to further consultation before final advice is given to the Minister for Climate Change and Water.