Australia’s water markets are recognised globally as a water reform success story.
Water users can buy or sell their water rights, on a permanent or temporary basis. This encourages the best use of our scarce water resources. Trading encourages efficient water use by allowing it to be used where it’s needed most.
Our water markets have grown rapidly over the last 30 years. In 2020-21, the estimated annual market turnover was $6 billion.
Water market reform
Water markets continue to evolve. At times, reform is needed to keep them efficient and effective.
The Australian Competition and Consumer Commission (ACCC) conducted an inquiry into water markets. They published a Murray–Darling Basin water market inquiry final report in March 2021.
On 11 October 2022, the Minister for the Environment and Water, released the Water market reform: final roadmap report. The Roadmap includes 23 recommendations to drive water market reform.
The Australian Government committed to implementing all 23 recommendations in the Roadmap.
The government will introduce legislation to deliver integrity safeguards comparable with other markets. Under these new reforms, the ACCC will regulate market conduct and the Inspector-General of Water Compliance will enforce new water markets data requirements.
The reforms will ensure water users have access to the information they need to make management decisions. This includes:
- A new water market hub – a digital platform for national water data management
- A new water markets website – providing access to minute-by-minute water market updates, and
- New water market data standards for transparency and accessibility.
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Water prices are influenced by supply and demand drivers such as:
- water availability
- climate conditions
- demand for agricultural commodities.
Pricing and catchment information
The Bureau of Meteorology’s water markets dashboard publishes current water market data. It includes information on:
- water prices and volume
- water sources, such as surface water and groundwater
- water availability, storage levels allocations made to entitlement classes
- entitlement types, and historical trade data.
Water markets governance
State and territory governments each set their own water trading rules.
The Water Act 2007 provides water trading and related rules to be made at the Commonwealth level. These rules sit above state and territory rules. They provide a consistent framework across jurisdictions.
These different sets of rules are important to:
- reduce unnecessary barriers to water trade
- enhance transparency
- protect against negative impacts of water trading.
Basin Plan water trading rules
The Basin Plan water trading rules set out the high-level principles and requirements.
The Murray–Darling Basin Authority (MDBA) enforced these rules until 2021. This role now belongs to the Inspector-General of Water Compliance.
Basin state water trading rules
Basin state governments create most of the rules for water trade in the Basin. They develop and maintain the rules on water access and use.
Water market rules and charge rules
The Australian Competition and Consumer Commission (ACCC) enforces water market and charge rules. More information on these rules is available on the ACCC website.
- The Australian Water Market Report is the annual report on water market operations.
- Trends in water entitlement holdings and trade provides an analysis of trends across the southern Murray–Darling Basin.
- ABARES water market outlook (April 2023) provides additional information
Foreign ownership of water rights
Foreign owners of Australian water rights must register their details with the Australian Taxation Office.