ACCC Demands Comprehensive Overhaul of Murray-Darling Water Market

According to the Australian Competition & Consumer Commission (ACCC), an independent body should be established to oversee trading activities in the water market of the Murray-Darling Basin.

This is one of the 29 recommendations made by the Consumer Watchdog in the final 700-page report (pdf) Of the water market research in the Murray-Darling Basin.

Prime Minister Scott Morrison called for a survey of the Murray-Darling water market in 2019 after widespread anger from local farmers over price concerns during the drought. The research recommendations are aimed at improving current trade agreements, strengthening market governance and information flow, and strengthening market design.

ACCC Vice-Chairman Mick Keough said that watershed systems and governance have traditionally been designed around protecting the environment rather than providing an efficient labor market.

“No attention was paid to ensuring that the water market is functioning fairly and efficiently.” Keough said In the statement. “The water market in the Murray-Darling Basin, which averages more than $ 1.8 billion a year, is now on a scale that requires serious and focused attention.”

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Former Water Minister David Littleproud (right) on a tour of the southern basin of Renmark, South Australia, September 1, 2019. (AAP image / Matt Cofran)

Research has shown that the current water market is extremely complex to navigate, the interstate trading process is inconsistent, lacks regulation and transparency, and centralized legislation prohibiting fraudulent transactions. Turned out to be missing.

These factors contributed to the lack of trust in the market by traders and discouraged their participation.

Due to the lack of trust, many local traders believed that large investors were manipulating the market through price-fixing, insider trading, and collusion. However, the ACCC has found no evidence of such illegal activity.

“Inevitably, this lack of trust will hinder efficient investment in agricultural production in the basin and hurt all Australians,” said Keogh.

“ACCC’s recommendations are to strengthen market integrity, improve transparency and information, improve trade services, and better align market rules and arrangements with the physical characteristics of river systems to build trust. It helps build market efficiency, “he said.

Water Market Agency

The proposed Water Markets Agency is central to addressing most of the concerns raised by users at the ACCC, which ensures that users navigate the market and that the market is operating fairly and that the market operates. We encourage you to provide advice to the government from a focus on.

Despite analyzing 8 million transactions in the market between 2012 and 2019, Keogh had difficulty understanding market trends due to unclear data.

“40% of [the transactions] There were no prices associated with them, no dates associated with many of them, and many occurred in multiple jurisdictions. ” Keogh told ABC..

To address this and the lack of confidence in the user’s market, the ACCC will introduce new legislation banning market manipulation, allowing the Water Agency to take action against fraud when identified. Proposed to be able to control and enforce the law.

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When the beginning of the stream arrives in Brewarina, Australia on February 17, 2020, you will see a dry section of the Burwon River. (Jenny Evans / Getty Images)

Minister of Water Keith Pitt said The government was already working on ACCC recommendations, including a $ 5.4 million investment in a single water information platform.

“We will also develop new legislation to strengthen compliance and establish the statutory status of the Commissioner-General’s Inspector General for the Water Compliance Bill,” Pitt said.