Water reforms delivering benefits for Murray Darling Basin water users but significant issues remain

6 June 2016

The Australian Competition and Consumer Commission has publicly released the 2014–15 Water Monitoring Report.

The report provides information on the level of water infrastructure charges that irrigators and other customers face in the Murray-Darling Basin. It also reports on the progress that has been made to increase the efficiency of Basin water markets.

The water market rules and water charge rules have played a critical role in improving the efficiency, transparency and flexibility of water markets.

“The water monitoring report highlights the benefits that these reforms have had for water users through improvements in water markets and water charging arrangements,” ACCC Commissioner Cristina Cifuentes said.

“For the first time in several years, transformations increased in 2014–15. This is positive news as it enables greater flexibility in water trading and usage decisions.”

The volume of water delivery right (WDR) terminated in 2014–15 is the lowest since the ACCC began monitoring in 2009–10. Across all operators, only 7 per cent of the volume of WDR on issue at 1 July 2009 has been terminated to date, although termination activity has been much greater in some operators than others.

“The rules have promoted increased transparency by requiring operators to inform their customers of charges for infrastructure services before they come into force,” Ms Cifuentes said.

“Nevertheless the ACCC is concerned at the charging practices of some operators which favour some customers over others. Further, it is not always clear to customers how operators are passing on-river infrastructure and government charges onto them.”

The ACCC’s monitoring shows that charges faced by most customers increased in 2014–15. For the customers of on-river infrastructure operators, typical (‘hypothetical’) bills calculated by the ACCC increased in real terms for 26 out of 36 systems, with real changes over that time ranging between a decrease of 11 per cent to an increase of 30 per cent.

Hypothetical bills for most customers of off-river infrastructure operators also increased in real terms, with real changes over that time ranging from a decrease of around 7 per cent to an increase of 8 per cent.

This report is timely given the ACCC’s current review of the Water Charge Rules. It provides useful information related to issues raised in the ACCC’s draft advice. As previously announced, the ACCC intends to provide its final advice to the government after the end of the caretaker period.

“Clearly much has been achieved with regard to water market and charging arrangements in the Murray-Darling Basin. Water market and charging practices continue to evolve and the ACCC will monitor these developments and the impacts they can have on irrigators and other water users,” Ms Cifuentes said.

Release number: 
MR 98/16
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