Preliminary water market transparency responses released

The senior staff members, Naomi Douglas and DELWP Water Resources Strategy executive director, Grace Mitchell, gave presentations at meetings in Melbourne and Moama, on the state government's water market transparency options paper.

Consultation on the three options in the paper, full market transparency, releasing the names of the top 100 water market participants and improving real-time information on price and depth, has now closed.

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Ms Douglas told the Australian Water Brokers Association annual general meeting the options paper was based around finding out who owned, bought and sold water.

"I would say full market transparency was pretty roundly rejected - with pretty good reasons - by most people," Ms Douglas said.

"But there was quite a lot of support for it, from people outside the market.

"People inside the market say, 'it's a market, that's what markets do', people outside the market say, 'you are buying and selling water, that doesn't make sense to me'."

She said some of the comments made during the consultation included that full market transparency would kill the market, would gain nothing and contained a number of downsides.

"Full market transparency is pretty much opening up our register and saying you can see, what we can see," Ms Douglas said.

"All allocation transfers are on the water register website; we'd just add names to them."

She said DELWP collated reports on a number of trading practices, including carryover, but they were generally aggregated.

"We could drill it down to individual accounts, and put names on them, that would be full market transparency," Ms Mitchell said.

"There was a lot of interest, particularly from people outside the water market, but some from inside, thinking nefarious things are going on, people are hiding in the shadows

"If you shine a light into all those shadows, that won't happen."

And at the Waterpool Water Summit, Moama, DELWP Water Resources Strategy executive director Grace Mitchell generally said people thought the market was working, although some respondents didn't want one at all.

"There wasn't a lot of support for full market transparency," Ms Mitchell said.

"When people thought through that would effectively mean people had full access to the equivalent of knowing what is in your bank account, and knowing every transaction, there wasn't a lot of support.

"It's fair to say those who were not involved in the water market at all, and would not be subject to full transparency, were more relaxed about it."

Ms Mitchell said when asked if big players should be named, about 56pc of respondents agreed and 44pc disagreed.

"It wasn't as strong as we possibly had expected," Ms Mitchell said.

Two-thirds of respondents said the names of those holding up to 5pc of water should be released.

Ms Mitchell said 13pc of respondents said the top 100 water holders should be named.

Ms Douglas told AWBA water market transparency wasn't just about providing names.

"People are interested in that, but they are way more interested in price data they find trustworthy, and market depth information more important," Ms Douglas said.

"That's what they find they can't find, it's hard to get a sense of the market if you don't know if there is a lot of water on the market, or none, or somewhere in between.

"That's the information a lot of people are grasping for."

There was also significant support for a single platform, particularly from irrigators in the Mildura area.

"You could have a single platform, like the broker portal, that extended across the states, with an interstate trade rules engine," Ms Douglas said.

'Or you could aggregate a site, such as the one Waterflow has built.

"I was astounded everyone didn't say I am interested, but don't want to pay any more."

Respondents also asked about river operations.

Many commented that the Murray River was full and wanted to know where, and who, the water was going to.

"There's been a lot of questions about river operations, and the type of information that goes to making allocation decisions," she said.

DELWP was also seeking to dispel some of the common myths surrounding the market.

Ms Douglas said there was a perception Lower Murray diverters were taking all the water, "and the Goulburn Murray Irrigation District is completely going down the plughole."

While water was going out of the Goulburn-Murray Water district, it wasn't true to say too much was being taken further down the Murray.

"The trend is happing, and that water is going out of the GMW, but irrigators there still have heaps of shares, and they are still using them," she said.

"LMW irrigators are big, they are getting bigger, and that is a big change, but it is not quite as simple as we hear all the time."

She said price fluctuations were also leading to speculation.

"The price at the moment is particularly high, and people are really worried," Ms Douglas said.

"That sort of concern often leads to a whole lot of talk, a lot of self-interest and that's people defending their own positions, and trying to make their own lot better, which is completely understandable.

"But there is also a lot of jumping about at shadows, thinking there is no way the price we see at the moment can be valid, there must be something behind it."

Respondents to the options paper had also raised the issue of water not being linked to land, but being held by people who were "not real farmers.

"If you looked at all the speculation, you would think that it was 90per cent of the market, that they are absolutely dominating the market."

The actual figure for private high reliability water shares, not tied to land, last financial year was 12 per cent, up five pc since 2014-15.

"Real irrigators look like evil investors when they hold water, not tied to land," she said.

"If irrigators commonly transferred water to a single allocation bank account for use on land, we would guess they are probably irrigators."

"It's actually really hard, and getting harder, because people are doing so many things, in so many ways it's hard to put it in categories people want to understand."

The amount of high reliability water shares owned by the evironment had risen from 26pc, in 2014-15, to 28pc, last year.