One in three Victorian water trades are for zero dollars, a Murray-Darling Basin Authority audit of 2017-18 water trades has revealed, with the authority calling for an overhaul of basin water markets to promote transparency and confidence.
The audit found no basin state had robust arrangements to ensure comprehensive and accurate price information, leading to incomplete and inaccurate data.
While acknowledging there were legitimate reasons for trades to be marked as $0, the MDBA said it was ‘‘implausible’’ the 17903 $0 transactions registered in Victoria, and the more than 27400 transactions across the entire basin, were for such reasons.
‘‘It seems common practice for sellers to deliberately misreport the price of trades as zero dollars, and for states to accept this deliberate misreporting,’’ the audit said.
MDBA compliance executive director Brent Williams said water trade data tended to be built around the needs of water managers, rather than the needs of the market.
‘‘Mandatory price reporting is relatively new, introduced in 2014, and the audit found compliance and enforcement practices remained sporadic,’’ Mr Williams said.
‘‘Of all trades reported in the basin in 2017-18, for example, 44 per cent were submitted with a $0 price.
‘‘The water market plays an increasingly important role in the farming sector, and it is in everyone’s interest that participants at all levels adapt their processes to ensure the full range of transactions are reported transparently and accurately.’’
The audit has called for a number of reforms, including adding a compulsory trade-price field for all trade application forms by December 31, and a trade price validation process be in place by basin states by June 30, 2020.
Mr Williams said the MDBA would contribute to the upcoming investigation into the water market by the Australian Competition and Consumer Commission, as announced by Federal Water Resources Minister David Littleproud.