Water trade: ACCC finds MD Basin’s markets full of ‘black holes’
Murray Darling Basin states have failed to demand proof of identity and pricing from water traders in a market worth almost $3.5 billion in 2019-20.
THE Murray Darling Basin’s murky water markets need to be flushed out, says Australia’s competition watchdog.
The Australian Competition and Consumer Commission’s interim Murray Darling Basin water markets inquiry is sitting on Treasurer Josh Frydenberg’s desk.
But The Weekly Times has been told the inquiry identifies major flaws in the trade of almost $3.5 billion worth of the nation’s most precious resource in 2019-20, one of which is the failure of buyers and sellers to prove their identity and pricing to state water registers.
“There’s not even a requirement to provide an ABN (Australian Business Number),” one source said of the report’s findings.
Another source told The Weekly Times about 20 per cent of the basin’s water trade was being driven by four water market speculators.
But the inquiry found the biggest “black holes” in the Basin’s water markets were the trades by the farmer-shareholders in Murray and Murrumbidgee irrigation corporations.
Under current rules neither of NSW water corporations were required to reveal details of internal trades of water between their irrigator shareholders.
Water brokers told The Weekly Times Murrumbidgee Irrigation did not even require its irrigators to list the price of trades.
At the heart of the problem was the failure of Basin state governments to demand grater rigour and market transparency.
One insider told The Weekly Times the best way to describe the challenge of creating consistent water market rules and transparency was to imagine trying to get the basin states’ water ministers and their officials to run the Australian Securities Exchange.
The ACCC interim report, which is due to be released within days, showed many of the issues raised in last year’s MDBA audit of water trade pricing have still not been resolved.
Last year’s audit found: “there is no single point of truth for Basin trade data, as it is dispersed between various approval authorities, using a multiplicity of processes”.
The MDBA audit also found “44 per cent of all Basin trades were priced at zero” and many trades were occurring “without requiring evidence to ensure that the $0 price is genuine.
“While there are legitimate instances of zero price trades (for example, the transfer of an entitlement between trading zones by the same owner, such as an environmental water holder, or an irrigator with multiple properties) it is implausible that almost half of the water trades in 2017-18 were for such reasons.”
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