Victorian environmental trades not affecting price: report

By Geoff Adams

A new report says the selling of water by the Victorian Environmental Water Holder has not impacted on water trading prices.

Independent auditors, Marsden Jacobs, found the Holder, transparently signals its trading intentions to market participants, and effectively avoids market distortion and adverse impacts on other parties.

To support the VEWH’s continuous improvement, Marsden Jacobs have also suggested some minor improvements in how the VEWH reports its trades once completed, the details included in its public announcements and to provide more flexibility in its decision making.

The VEWH has sold or bought small volumes of water allocation in systems across Victoria in every year since it commenced in 2011-12, with all water sales occurring in northern Victoria and most purchases occurring in western and southern Victoria.

Environmental water supply and demand across systems varies due to climatic and ecological conditions. Being able to sell small volumes of water allocation allows the VEWH to effectively and efficiently manage its environmental water portfolio.

Under the Victorian Water Act, the VEWH can buy, sell or exchange water to meet environmental needs. Water set aside for the environment has strict rules governing its sale. Any trade by the VEWH must protect the environment, be in the public interest and have no adverse impacts on the community.