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ACCC hears concerns about how the water market operates at a Shepparton forum

By Rodney Woods

Irritated irrigators filled the room at the Shepparton Golf Club last Wednesday to vent their concerns about the operation of the water market.

One farmer went as far as saying that for dairy to prosper again, carryover had to be scrapped, while at least one other was in attendance to support the water market in its current form.

Many other issues were raised, but it was the need for a transparent water market, a fairer go for irrigators and a need for change so that future generations could prosper that dominated discussion during the Shepparton leg of the Australian Competition and Consumer Commission's inquiry into the operation of water markets in the Murray-Darling Basin.

ACCC staff heard the concerns of about 130 people, and the commission's deputy chair Mick Keogh said the biggest point made at the forum was that markets did not consider the effects of communities being unable to compete when purchasing water.

“The strongest view expressed here was a view that water markets are all well and good but they don't consider the broader impacts of what happens when, for example, a region or district is no longer able to pay the same price that some competitor can pay for that water,” Mr Keogh said.

He said market transparency was critical.

“I think transparency in the market is something that is more broadly recognised as a weakness and certainly you've got the Victorian Government at the moment consulting on some models of transparency.

“You've got arguments between states about the extent to which they agree to transparency, but the ACCC's general perspective of markets is that the more transparent they are, the more freely available information is and in a useful form, the better those markets perform.”

Mr Keogh was confident the Federal Government would take on board the ACCC's recommendations after an interim report is delivered to the Treasurer in May and a final report in November next year.

“We've got a pretty reasonable track record with our inquiries and recommendations,” he said.

“We can look at issues like the electricity market, the dairy market, and governments have taken notice of our recommendations so I'm confident that should we see issues that need to be addressed they'll certainly be looked at pretty seriously by the government.”

To coincide with the meeting, Fruit Growers Victoria has called for Commonwealth and state governments to address "clear failures in the past decade of water reform".

“The basin plan, as it was negotiated, attempted to remove too much productive water too quickly and focused too much on meeting end of system flow targets based around the flawed approach of attempting to keep a naturally estuarine Lower Lakes fresh,” Fruit Growers Victoria water spokesperson Peter Hall said.

Mr Hall also called for a review of how to best address excessive losses through the system.