Regulated water charges varied substantially between the different states in the Murray-Darling Basin in 2021-22 as wet conditions across the Basin kept water availability high, the ACCC’s annual Water Monitoring Report 2021-22 shows.
The Murray-Darling Basin focused report monitors regulated water charges, compliance with the water rules by infrastructure operators, and ‘transformation’ arrangements that allow irrigators to convert an irrigation right into a standalone water access entitlement, held by the irrigator or traded to another person.
“The ACCC’s report aims to keep stakeholders informed of the changes in regulated water charges and the irrigation market in the Basin, the largest and most complex river system in Australia,” ACCC Deputy Chair Mick Keogh said.
As part of its water monitoring, the ACCC prepares ‘typical bills’ which estimate the annual charges that irrigators pay for different water entitlement and delivery scenarios from on-river (bulk) operators and irrigation infrastructure operators.
“Transparency helps water users understand the charges they are paying, water markets to work efficiently and policy makers to assess the impact of reforms to the regulatory framework,” Mr Keogh said.
This report is structured by state and highlights that regulated water charges differ substantially between different Basin states, and that state government policies have a significant impact on on-river typical bills.
The wet conditions in 2021-22 allowed off-river infrastructure operators in the northern Basin, where annual crops such as cotton are common, to deliver 47 per cent more water compared to 2020-21. In the southern Basin, where dairy and perennial horticulture crops are more common, off-river infrastructure operators delivered only one per cent more water in 2021-22 compared to 2020-21.
Queensland
“The Queensland Government discounts and rebates for irrigators substantially reduced the charges paid to Sunwater by irrigators, especially horticulturalists,” Mr Keogh said.
New South Wales
Typical on-river bills for WaterNSW customers rose substantially in 2021-22 compared to 2020-21.
“Increases in input costs and the ending of the New South Wales drought relief waiver for fixed government charges led to substantial increases in our typical bill calculations for 2021-22 compared to the year before,” Mr Keogh said.
The report shows that, in most cases, rises in typical bills for NSW off-river operators, particularly larger ones like Murrumbidgee Irrigation, Coleambally and Murray Irrigation, were driven by rises in the on-river component of these bills, due to Independent Pricing and Regulatory Tribunal’s 2021 price review and the ending of the drought rebate.
Victoria
In Victoria, charges levied by Goulburn-Murray Water and Lower Murray Water have risen by less than inflation since 2019-20, meaning they have fallen in real terms.
“Water storage levels were high in Victoria in 2021-22 and substantial rainfall kept demand for irrigation water down,” Mr Keogh said.
South Australia
Similarly, in South Australia, typical bills for private diverters and Central Irrigation Trust and Renmark Irrigation Trust customers fell in real terms.
The charges that SA Water levies on its transportation customers are higher than any other regulated water charges monitored by the ACCC, reflecting the higher cost of service.
Trading water: transformations, terminations and complaints
Across all Basin states, irrigators transformed small volumes of irrigation rights in 2021-22. The volume of water delivery rights terminated was a very small proportion of the rights on issue (generally less than one per cent).
“Low numbers of transformations and terminations suggest the industry was relatively stable in 2021-22,” Mr Keogh said.
The ACCC received 7 complaints about water-related matters in 2021-22, including one from an irrigator. This continues a decline in water complaints and inquiries to the ACCC since 2018-19.
“Fewer complaints may in part be attributed to the rules having been in effect for over 12 years, meaning that most infrastructure operators have a mature understanding of the water rules,” Mr Keogh said.
Background:
The Water Act 2007 (the Water Act) provides the frameworks and institutions to ensure that the Basin is managed in the national interest.
The ACCC has several roles under the Water Act that include monitoring regulated water charges (including termination fees), transformations, and compliance with the Water Market Rules and Water Charge Rules (the Rules) under sections 94 and 99 of the Water Act. To provide greater context the ACCC also includes the water allocation trades processed by off-river infrastructure operators, and total transformation processing times.
An infrastructure operator is an entity that owns or operates infrastructure for the storage, delivery or drainage of water for the purposes of providing a service to someone who does not own or operate the infrastructure. Some infrastructure operators store and deliver water on-river. These operators include WaterNSW, Sunwater and the Department of Regional Development, Manufacturing and Water (DRDMW) in Queensland, and Goulburn-Murray Water (GMW) in Victoria. They are referred to as either bulk water operators or on-river operators.
An off-river infrastructure operator provides services such as the storage, delivery and/or drainage of water diverted from a natural watercourse through a network consisting of off-river channels to another operator.
An on‑river infrastructure operator harvests and stores water through infrastructure such as dams, lakes, weirs and reservoirs located primarily on a natural watercourse, and delivers water, primarily through natural watercourses.