ACCC 2015-16 Water Monitoring Report shows rural water sector adapting to change

The Australian Competition and Consumer Commission’s seventh annual Water Monitoring Report, covering 2015-16, shows the effects of structural changes in the Murray-Darling Basin rural water sector on regulated charges and terminations, transformations, and trades.

“This year’s report highlights that operators and customers are responding to change in a variety of ways,” ACCC Commissioner, Cristina Cifuentes, said.

“For example, infrastructure operators have been upgrading existing services or offering new services. Customers are using market mechanisms in innovative ways to adjust their water holdings and access to infrastructure, signaling greater confidence in using markets.

“We’ve seen substantial volumes of ‘temporary’ trade this year which suggests that temporary water markets are an important tool for customers. However, some operators continue to place restrictions or high transaction costs on the temporary trade of water available under irrigation rights, which can reduce the benefits of trade.”

The report also provides information on the level of water infrastructure charges that irrigators and other customers face in the Murray-Darling Basin. ACCC analysis indicates that for on-river customers, estimated bills have increased, except in the southern Murray-Darling Basin. For off-river customers, estimated bills increased in about two-thirds of monitored networks this year, although these changes were small and close to inflation. In some networks, infrastructure upgrades have resulted in significant increases in customer charges.

“Compliance outcomes for this year indicate that operators are broadly familiar with the rules. The few instances of alleged non-compliance with the water rules enforced by the ACCC were resolved administratively, which is a positive outcome for operators and their customers,” Ms Cifuentes said.

The full report is available on the ACCC website.