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The Bondi Group is an incorporated organisation which represents the interests of Australian private irrigation water supply enterprises in the continuing public debate over water and the policy setting which follows that debate


PUBLIC SUBMISSION TO WATER MARKET RULES ISSUES PAPER BY


PUBLIC SUBMISSION TO WATER MARKET RULES ISSUES PAPER

BY THE BONDI GROUP [ABN 16358861584]

ON THE 9TH MAY, 2008


The Bondi Group

Australian Private Irrigation Entities Incorporated

5 Tapio Street

DARETON NSW 2717


The Bondi Group is an incorporated organisation which represents the interests of Australian locally owned, private irrigation water supply enterprises in the continuing public debate over water, and the policy setting which follows that debate.  The Bondi Group comprises of a group of successful water managers operating under local ownership structures. 

By representing the interests of private Irrigation Corporations in Western Australia, Queensland, Tasmania and New South Wales, The Bondi Group works to ensure an informed public debate with real examples and hard statistics to correct misinformation and misunderstandings.

The Bondi Group was formed to be proactive and assist policy development and commentary as part of the national water reform process.

The Bondi Group is an incorporated organisation which represents the interests of Australian locally owned, private irrigation water supply enterprises in the continuing public debate over water, and the policy setting which follows that debate.  The Bondi Group comprises of a group of successful water managers operating under local ownership structures. 

By representing the interests of private Irrigation Corporations in Western Australia, Queensland, Tasmania and New South Wales, The Bondi Group works to ensure an informed public debate with real examples and hard statistics to correct misinformation and misunderstandings.

The Bondi Group was formed to be proactive and assist policy development and commentary as part of the national water reform process.

INTRODUCTION

It is important to remember that the implementation of the National Water Initiative and the Water Act 2007 was "to facilitate the operation of efficient water markets and the opportunities for water trading." Water Market Rules are coming at the end of a process that commenced with the Committee of Australian Governments (CoAG) in 1994 and have been prompted by the current drought and the need to optimise the use of the limited seasonal allocation of water. In terms of the water market, the ACCC needs to be clear if it is taking into account the perceived best interest of the Commonwealth Government as this may not always be the best interests of other parties who are participating in the water market.

Some individual Irrigation Corporation's are lodging separate submissions with particular emphasis on their specific irrigation corporation area. The Bondi Group acknowledges the importance of having water for the environment and for human consumption. The importance of the water market in times of the recent drought is also recognised.

This paper seeks to represent the broader views of the Bondi Group and in particular, Private Irrigation entities of which we are the peak national organisation.

Commonwealth

The Commonwealth seeks to act in the national best interest. With regard to the National Water Initiative, a growing economy should have the minimum amount of barriers to the trading of water. Since 1994 the Australian Government’s aim has been to ensure that water achieves the 'highest value and best possible use'. In economic terms the 'highest and best possible use' is considered to be, by default, the highest achievable price and water pricing is the mechanism by which water use will achieve this.



States

Federal Government funds provided an incentive for the States to sign the National Water Initiative. Even though they have signed it, the States still continue to act in their own best interests because they want water to be used productively in their regional area to generate a stronger State economy.

The States have little incentive to upgrade State owned irrigation infrastructure because it would cost them money and they would consider the benefits to be minimal. A cost/benefit (votes) analysis does not justify significant spending by the States and unless they can get the Commonwealth to pay for the upgrades, with the States claiming the economic benefit, they show little genuine interest in providing the sufficient funds themselves.

It should be noted that the Bondi Group members own and maintain their shared infrastructure.

It would appear to us that the States have a valid reason to put up barriers to trade. The ACCC have not substantiated the Issues Paper with actual trade figures so it is difficult to determine the volume of interstate trading. In New South Wales since interstate trading commenced, the NSW Government has underfunded the Departmental resources needed to make trading efficient. Insufficient funding is consistently provided to both State Water and the Department of Water and Energy to enable time efficient water trades. What the ACCC needs to establish is at what point – if the Commonwealth were to provide some funding - would the NSW Government be willing to provide sufficient resources, even though NSW would be likely to suffer a net loss in economic terms as a result of that trade? We are concerned that NSW has consistently underfunded its departments because the NSW State Government suspects it will have a net loss of water entitlements to other States and therefore, their allocated funding is inadequate. There is also a level of complexity in the interstate trading rules which have been drafted by the Murray Darling Basin Commission.

In terms of interstate water trade, South Australia initially thought they would be net losers and because of this have historically not provided resources to improve their trading system. Now that the SA State Government believes that they will be net beneficiaries, the SA State Government is addressing the situation of its underfunded and under-resourced Departments that are needed to help facilitate the operation of efficient water markets. This is because they now have a strong incentive to do this.

In Victoria – where arguably the greatest barriers to trade exist – they have taken the 4% cap and instead of applying it across the entire authority of the Goulburn Murray River, they have applied it over separate zones. The result is that the cap is often reached within a season. The cap also includes water which is separated from land. This is clearly not a permanent movement of water entitlement and should not be included in the cap.

There is a disincentive for States to provide resources and improve systems where there is a belief that there will be a net loss of water and a reduction in their economy as a result of more efficient trades.

Irrigation Corporations

The Irrigation Corporations act in their own best interest – that of the Irrigator members. They are self-managed and self-funded and there is a direct relationship between the money spent on upgrading infrastructure and the benefits to the Irrigators. The Irrigation Corporations fix and build infrastructure so that water user efficiency can be maximised and irrigators can participate in water trading through water savings achieved. Irrigation Corporations understand water trading between States is important and can be efficient because they understand that the benefit of upgraded infrastructure makes for cost effective and time efficient water trades.





Growers

In uncertain environmental times, growers/Irrigators need to be assured that their annual crops and permanent plantings will have enough water for the season. In terms of investment in infrastructure, there is a direct cost/benefit correlation that does not exist at State Government level. If one State Irrigators has surplus water, there should not be barriers and red tape that hold that water from them. Willing sellers should be able to sell to willing buyers. The need to facilitate trade between the States was what instigated the National Water Initiative. It is the drought that has been the catalyst for the proposed water market rules.


The pressure for the water market rules has come about by the insufficient resources to meet the needs of all the participants in the Murray Darling Basin. Participants include cities, towns, Irrigators and the environment. We believe the rules should be designed to get the best use out of a limited resource. Whilst the 'highest and best possible use' may be that which pays the most money, it may not be in the best economic interest of Australia if the use of the limited resource is a non-productive use. It is in the Commonwealth's best interest to get the 'highest and best possible use' of the water and in part, that is to ensure that water generates its productive capacity and that regional and rural communities are sustained and our food is guaranteed.

The Bondi Group supports the principle that Irrigators add disproportionate value to the Australian economy whereas the highest price for water may not generate any production.



Question 3

The water market and trading objectives set out by the ACCC should be practical, attainable, reasonable and necessary. However, we submit that the ACCC carefully look to the interests of third parties. Greater emphasis needs to be placed on the social and economic impacts of large quantities of water being traded away from areas and schemes. To date, there has been insufficient attention or recognition of the potential demographic and economic impacts on community areas that may suffer as a result of permanent water exports from the district. While Government is making reference to structural adjustment initiatives, these have not been clearly defined.

There is unanimous support in favour of protecting the operators, the Irrigators and the wider community they live in from detrimental third party impacts.

We encourage the ACCC to seek the views of organisations such as Regional Development bodies and Local Government Authorities regarding the effects on communities that allowing water to be traded away from the area would have upon them.

Trading rules should be sufficiently robust to enable sensible trading of water without leaving communities with devastating effects.

The Harvey Water (Western Australia) and Coleambally (NSW) Schemes exemplify attention to third party interests and the benefits that come from a well planned trading platform. We strongly suggest that the ACCC contacts them to understand how providing tangible benefits to a community can work. If communities and irrigation schemes are to remain viable in the long term future of Australia, we must ensure the community's interests are specifically addressed. Further, given the increasing world wide shortage of food, the agriculture industry is going to be in demand more than ever.





Chapter 4.1

The Bondi Group does not as a group support the trade of water to non-landholders and/or non-water users unless the termination fee liability is paid on surrendered delivery entitlements. Third parties, such as communities and townships will suffer severe consequences if water is allowed to be traded away from their area and to non-landholders and/or non-water users. However, if water is to be traded to a non-landholder and/or non-water user, the infrastructure operator must have the ability to authorise the quantity of the trade and how the delivery entitlements and water entitlements should be dealt with. This will prevent outside corporations buying water and selling it back at inflated prices. Anne Rzeszkowski of the Coleambally Irrigation Co-operative Ltd made the point that we need to clearly understand what and why it is that an outsider would want water. She asks: Is the water market being developed for those who need, require or use water? Or is it to promote a change of ownership of yet another natural resource where outputs are currently being shared by all Australians?

Tony Chafer used the following example to exemplify what would happen if water was allowed to be traded from an area:

In a channel system, there are 5 farms on a channel and 4 of the farms sell 100% of their entitlement. Because the final farm has retained their entitlement, a full channel would need to remain to provide water to the remaining farm. The volume of losses attributed to evaporation, seepage and operational water (conveyancing, weed treatment etc) would potentially remain constant but there will be less water delivered to apportion these losses over. In lieu of this, and in order to comply with the new national standard for delivery system efficiency, the irrigation provider may be forced to consider piping the water to the remaining farm when there is no guarantee that the remaining farm won't sell off it's entitlement in the future. This makes justifying the capital expenditure to convert to a pressurised system and achieving water use efficiency all but impossible. Also, full maintenance costs for the entire channel would have to be met by the one remaining farm.
An Irrigator and/or an Irrigator providor should not be disadvantaged by higher operational charges because his/her neighbours transfer their water from the area.

Peter Wallis of the West Corurgan Private Irrigation District makes the point that changing the use of water in NSW – from General Security to High Security – is acceptable, providing predetermined conversion ratios are adhered to with no impacts on the security of all other High Security entitlements. 

In essence, what is deemed 'appropriate' must have one test: that the purchaser buying the water will not supply it back at an unreasonable rate, or withhold it and create consequential damage to Irrigators and third parties or participate in cartel or monopoly style behaviour. It is for this reason that restrictions cannot apply generally and across jurisdictions. Any proposals to move water away from agricultural production should be the subject of detailed social and economic assessments. Water markets should be developed to enable the most efficient and productive use of water. Currently the Government is the major purchaser of water for the environment and it has a cheque book of $3 billion to spend on buying back water over a number of years. This is hardly competitive behaviour in a market and has implications for the achievement of an efficient market.

Question 4.2

The constraints on water exports (such as the 4% cap) were put in place to reduce barriers to trade and to allay the concerns of third parties. Efforts must be made to ensure that at no time should the constraints adversely affect the very people they protect – the Irrigators and the Shared Infrastructure.

The main concern, outlined by Less Furness of the Murrumbidgee Private Irrigators is to ensure that everybody is able to execute their property rights and that everyone has an opportunity to participate on equal terms. Further, Wallis comments that in relation to the constraints imposed on water exports, operators should have discretionary power to limit water exports by means of acceptable restriction parameters. Both Furness and Wallis agree that whilst individual rights are extremely important, so too are the rights of those remaining within the operational scope of an operator's district. Each operator is somewhat unique and therefore, should not be bound by ‘blanket legislation’ that fails to take into account that operators particular situation. For example, a scheme which has four members and a total allocation of 2000 megalitres is quite different to the huge capacity and membership of a larger operator. State owned corporations also have the benefit of subsidies when required. Small privately owned entities have no “get out of trouble” clauses.

Rzeszkowski submits that the loss of benefits to third parties if water is traded outside the area can be counterbalanced by acceptable and reasonable termination fees. This, Rzeszkowski comments, should eliminate any third party impacts on remaining Irrigators.

There should be a requirement to offer water entitlements to Irrigators first.

Currently there are specified limits as to the volume and percentages of water that can be traded out of an area. The Inter-Governmental agreement puts this restriction at 4%.

The requirements for a minimum amount of retained water holdings is an important restriction that should be made a mandatory restriction. Rzeszkowski asks:

If a property/properties within an irrigation area are left without water entitlements, who will bear the responsibility for any environmental impacts – such as salinity and rising salt levels from surrounding irrigation properties?

To thwart the dilemma, the requirement for minimum water holdings is as important as it is sensible. As with all water issues and restrictions, the minimum amount should not be a burden on the irrigator. As each operator and irrigator is different, there cannot be a ‘blanketed’ minimum amount. The amount must be relevant to the area and users.

The issue of exit fees seems to have been resolved by the introduction of termination fees. At this time, termination fees are an adequate cognition of surrendering water delivery and 'exiting' the water market. Such fees safe guard third parties from the possible repercussions that would follow such behaviour.

The Irrigation Corporations require clarification from the ACCC as to whether the termination fees will be subject to tax. Additionally, they need to be informed as to whether or not the fees will include GST. If taxes and GST are applicable, this will add to the considerable costs associated with the terms and conditions of trading that have already been forced upon the Irrigation Corporations.

Each time the Government changes their position on water trading, the Irrigation Corporation's incur the costs of changing their policies and constitution to mimic the Government’s position. What is needed is one position and for an organisation – whether it be the Government or an appointed committee – to set fair rules. The costs of disorganised policy-making are rising and those held financially accountable are those with the least surplus to waste.

As for other rules and penalties that would discourage water leaving an area, Coleambally Irrigation Co-operative Limited ask whether on top of termination fees, more restrictions are reasonable to expect:

In relation to exit fees, it is a more reasonable form of restriction as opposed to operators prohibiting trade of water entitlements or imposing stringent conditions on transfers. The problems that further restrictions would cause when transferring water from state to state, or jurisdiction to jurisdiction starts with the very simple issue of how the megalitre is measured.

To transfer water elsewhere, where it is measured differently, will leave a discrepancy. Coleambally Irrigation Co-operative Limited asks who will cover such a discrepancy and further, is it part of the river's unaccountable losses? For example, water used in NSW requires a certain volume of conveyance water to deliver it but if the water is to be traded from NSW and used in SA there is a totally different volume required. Once again this demonstrates that a blanket restriction cannot apply to everyone and instead, restrictions should be placed on an irrigation corporation on a case-by-case basis. 





Question 4.3

As to other constraints on water and transformation, it is necessary to restrict the amount of groundwater that gets traded away from an area not only in order to preserve the financial viability of an irrigator as well as an irrigation corporation's minimum trading restriction but also because of the unique and different characteristics of groundwater. Trading significant amount of groundwater can have quite devastating environmental impacts. The appropriate circumstances where an operator could impose other constraints (other than the ones mentioned above) would have to be ascertained and dealt with on an individual basis and as they arose.  

Question 4.4.1

The plausibility and reasonable expectation that there be security for future payment of access fees and termination fees is an unworkable arrangement. It is the delivery entitlements that would need to be 'secured' as water entitlements are no longer attached to the land. Whilst this provides an avenue for an operator to secure revenue, it increases the financial burden on an irrigator – something the water market rules should be trying to avoid. Wallis states that there should be no ongoing tagged access fee or Government charges attributable to the purchaser when the entitlement is transferred out of an operator's district. Where tagged fees are fine and work well in theory, there does not seem to be a place for them in practice however, irrigation entities should be able to have a range of tools which enable them to collect outstanding monies owed to them for non-payment of fees and charges.

Question 4.4.2

If water rights are transformed from an operators licence it is presumed that the only fees applicable to that transferred water are Government fees, which remain the responsibility of the individual.

The extent and circumstances where it would be appropriate for an operator to require security should be based on whether or not that water right is going to be used within an operator's district. In this event the fees applicable to that use become a negotiable item, as do the conditions of use of that water. Once a water right is transformed, the presumption is that the water can then be used – subject to conditions – anywhere in the area or region.

Question 4.5

Overall, administration fees and charges are negligible to the cost of a water trade transaction. According to Furness there needs to be scrutiny of Government prices and costs on transactions. The fees and charges should be set out by the individual Irrigation Corporation as they vary in size and resources applied and for this reason, one amount will not suit all. Administration fees and charges should be applied but based on cost recovery. If the Government continues to adjust its position on fees, such as termination fees, there will be a further round of administration necessary and fees will go up. Continual amending and changing of Government policy and operations increases fees across all aspects of private water related business.

Question 4.6

The Bondi Group believes that internal trading seasons and cut-off dates should be able to be determined by an operator. Seasons should be predetermined before the start of a season and highly publicised throughout the industry and the membership base of the infrastructure operator.

For temporary trades, the trading seasons are determined by the Governmental agencies if traded between jurisdictions. Where a permanent trade of entitlement is undertaken part way through a season, NSW State Water only assigns the associated allocation to that entitlement at the beginning of the next full irrigation season. This system of monitoring is inadequate when accounting for the losses in the river and water storage systems. Although the Irrigation Corporation's keep track and show changes in entitlements as soon as trades are complete, there is potential for changes to be monitored across jurisdictions on one main register. The benefits of tracking the changes will save time and money and will account for 'lost' water in river systems and storage dams.

An example of a working register being developed and supported by the Bondi Group is NICWER – the National Irrigation Corporation Water Entitlement Register Pty Ltd. In conjunction with the majority of Irrigation Corporation's throughout Australia, it holds vital information pertaining to water trades and has created an easy-access portal for anyone seeking information regarding of water entitlements.

Cut off dates do act as a barrier for trade in timing only. They are necessary to enable an Irrigation Corporation to account for water movement and balance water licences at the end of the irrigation season. The problem is not with the cut off dates, it is the insufficient funding of State Government departments that render them unable to handle trades efficiently necessitating the earlier interstate cut off dates.

Question 4.7.1

Irrigators should have a choice of using a registered broker or conducting trades themselves. It should be a requirement that broker who trades water be a member of the Australian Water Brokers Association who operate under a licence administered by the Australian Stock Exchange. There are arguments against this position with some Irrigation Corporations pointing out that this will give the exchange operators an advantageous position to monopolise on water sales and trade.

There is a substantial argument that water sales and/or trade should be an open market with no restrictions on who facilitates the process. What is agreed is that the broker and Irrigation Corporation operate independently, with the Irrigation Corporation acting only as the 'approval authority'. The two should be kept separate with separate bank accounts and all money kept in trust. A separate chart of accounts is also necessary in order to facilitate each part to be fully auditable.

Question 5.1.1

The terms and conditions for transformation of water rights and/or trade should be comprehensive but not burdening, with a clear distinction between Government conditions and an operators conditions. As has been the essence of our submission, the terms and conditions must be relevant to the irrigator, the irrigation corporation and the surrounding communities. Whilst there may be 'blanket' legislation and terms/conditions from Government entities, there should be room for the individual Irrigation Corporations to create their own relevant terms and conditions. This will better enable parties to be bound by rules that tailor their specific needs.

At the present time there are no fundamental remedies for trading errors made and no parties are held accountable for their adverse actions in the market. If there is to be an efficient water trading system, this issue of appropriate sanctions for under-performance or negligence must be addressed. An independent body must exist to deal with water market complaints.

Question 5.3.1 to 5.3.7

In relation to transformation and/or the trade administrative process, an operator should have the ability to undertake their own checks regarding the application and approval process. Information pertaining to a trade, not including the sensitive and confidential aspects of a trade, should be made publically available so that operator's have correct and rigorous information in order to approve an application. Application checks should remain the responsibility of the operator. The Board of an Irrigation Corporation, not its management, should approve all large permanent trades.  



Question 5.4.1

At the present there is a belief that the timeliness of approval of both permanent and annual trades is too slow. If other forms of trade – such as shares – can be traded in three days, procedures should be implemented that allow water to be traded within three days too.

Permanent transfers and tranformations involve considerable amounts of money and appropriate care needs to be taken. Solicitors and third parties are also involved.

In relation to the temporary market, an irrigator's access to their purchased water as quickly as possible can be critical. Correctly completed applications are vital to the approval times of the relevant infrastructure operator and the Government agency. It is at this point that the processing time slows. Experience across Irrigation Corporations indicates that slow processing times are generally due to the Government agencies, not the private sector. 

Question 5.5.1 to 5.5.4

The establishment of a national register would need to encompass all individuals within an operator's district, as well as all the individual water right holders. At the outset, this appears to be an impossibility as the register would contain sensitive, highly personal and confidential third party mortgage and/or financial information. This may present a privacy issue.

One register which addresses these security issues is NICWER. Access to personal information is tightly restricted and at present the overall operational and maintenance costs of the register are not excessive. If NICWER were to encompass the registers from the Irrigation Corporations that have not joined, it would continue to be a successful and efficient tool for the Australian water market.

For security and integrity reasons, private operators still maintain their own registers and provide their information to NICWER. This is due to the fact that entitlement holders are also shareholders.

Question 5.6

There is a general sense that the market information available at the present time is sufficient to facilitate the trading process, however, this can always be improved. Market information should be made readily available to market participants but at the same time, the cost of this information should not be a burden. Private enterprises, such as broker's, "tout" for business and they will make market information available without the need for direct fees. Specified information should be available to the public on request. 

Question 6.1.1 and 6.1.2

The Water Market Rules Issues Paper references an Australian Banker's Association sponsored paper which discusses the mortgageability of water held as shares, compared to water held on registers. John Palmer of the Pioneer Valley Water Co-operative in Queensland states that in his operation:

It is our experience that not all financial institutions that we deal with agree with the ABA position on this matter and this should be brought to the attention of the ACCC. We have received comments from various institutions that present the totally opposite view – they feel there is more security for them where their customers are members of Irrigation Corporations and have a level of protection form outside forces in water management.

In relation to the processes undertaken by operators to identify whether an irrigation right has an encumbrance, Irrigation Corporation's generally have adequate systems in place to identify encumbrances. The NSW Department of Natural Resources have not allocated enough resources to keep up to date with transformations and trades. It should be recognised that a water entitlement is a chose in action – an intangible thing not similar to real property. The closest analogy of a water entitlement is a share, which is also a chose in action and you can have encumbrances over a chose in action.

Question 6.2

The tax implications in respect to transforming an irrigation right into a water access entitlement for an operator should have nil taxation implications for the entitlement holder. Government administration should not affect the bottom line of an Irrigation Corporation.

There are three tax issues that are a problem.

  1. Liability for tax on termination fees added to the fees applied by the Irrigation Corporation. The problem is, we are not sure whether termination fees are taxed or not and further, we do not believe there should be tax on termination fees. If an entitlement is terminated, the Irrigation Corporation needs the termination fee to cover the costs of maintaining their infrastructure. This is why the termination fee should not be taxed.

  2. The issues of capital gains tax on the sale of water entitlements. We are aware that capital gains tax is applied on water entitlements but we believe this is a significant barrier to trade.

  3. The issue of stamp duty in Queensland. Queensland is the only state that imposes transfer duty on permanent water trades.  Duty is applicable for transactions above $20,000 in value and is on a sliding scale up to 4.5% for transactions over $700,000.  Transfer duty on a trade of 100 megalitres at $2,000/ML would amount to $5,600.  This is one of the worst of all barriers to trade.  We believe that in the Border Rivers area, this affects competitive neutrality between NSW and Queensland border areas

We believe that these tax issues pose significant barrier to trade whereas we do not believe that transactional costs are a significant problem.



Question 7.1.1 and 7.1.2

There should be provision for market rules to be flexible enough to permit the unique situations of all operators to be recognised. Water market rules should be distinguished on the basis of the size and class of the operator. Smaller operators could have delayed implementation as they may not have the resources available to comply if time frames are enforced. There is also the added risk that if one set of rules were to apply to all, there will be large costs imposed on small operators. The Bondi Group stresses the ACCC consult widely with the smaller operators to fully understand the impacts of the draft water market rules.

Legislated regulations that result in compliance costs to operators should be paid by the Government, not the operator.

Question 7.2.1 – 7.2.3

Current contracts need to have an acceptable period of time before compliance issues necessitate change. Future uncertainty is a major issue therefore there needs to be a minimum timeframe before contracts can be varied – the example given by the West Corurgan Irrigators is five (5) years.

Every operator and irrigator has the right to review and amend terms and conditions before they sign. If the terms and conditions become unreasonable, there needs to be a way to review the contract.

The water market rules should take into consideration that the majority of contracts already signed and implemented were entered into in good faith and the parties to the contracts have no problems. Such contracts should not need to be changed. The pre-existing contracts between an operator and an irrigator should be accounted for but not forced to be amended to fit new terms and conditions. The water market rules could account for pre-existing contracts with a clause that states that a pre-existing contract is recognised, as long as both parties (operator's and irrigator's) agree to it. If a contract is entered into in good faith it should be let run until it expires when a new contract could be entered into.

Question 7.3.1 and 7.3.2

Currently, the conduct of operators is monitored by a plethora of Local, State and Federal Government agencies. With the implementation of the water market rules, the ACCC will need to provide information as to the types of monitoring it expects to implement. When the operators know how the ACCC would like to monitor the compliance of their water market rules, it is then that both parties – the ACCC and the Irrigation Corporations – can discuss amendments and various ways of implementation. Whatever the requirements, the ACCC must recognise the fact that a set of blanket rules will not suit all operators. Small operators cannot be expected to keep up the same rigorous monitoring scheme that the larger operators may adhere to.

The monitoring and compliance rules must remain fair and economical. This can only be achieved if:

1.      Irrigation Corporations are heavily involved in making the rules and they begin to be included to allow them to protect their interests. At the present time, the Irrigation Corporations exclusion from Government committees formed for irrigation and water issues is an obvious oversight.

2.      The ACCC should be aware that one set of rules will not fit all. Room should be made for individual and private Irrigation Corporations to implement their own rules. 

CONCLUSION

The Bondi Group submits that the water market rules should pressure States to provide sufficient funding in order to achieve the goals that are set by the National Water Initiative, which the States have signed and agreed to.

The Bondi Group respects the rights of the individual to deal with its water asset whilst still supporting the maintenance and use of the shared infrastructure of Irrigation Entities.

The ACCC should aim to meet the best interests of the Commonwealth and we believe that it is in the Commonwealth's best interest to get the 'highest and best possible use' of the water by ensuring that water generates its productive capacity. The Bondi Group believes that it is Irrigators who generate the most productive capacity, adding value well above anything else that the water may be bought for. A higher price today for non landholders use can not generate as much value as water that is used to grow crops and improve the Australian economy.

We submit that Irrigators add disproportionate value to the Australian economy whereas the highest price for water may not generate any production. We ask that the ACCC ensures both Irrigators and Private Irrigation Corporation’s are included in any future Committee or meeting which discusses their interests.

Appropriate time and consultation must be spent by the ACCC in determining the market rules. Above all, the ACCC should aim to minimise the third party impacts of the market rules.

The Bondi Group submission

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2007SOM3012ATTB3REV1 AGENDA ITEM V CONDUCT PRINCIPLES FOR PUBLIC
24 WTO PUBLIC FORUM 2009 GLOBAL PROBLEMS
COMMENT SUBMISSION FORM PUBLICLY NOTIFIED APPLICATION FOR LEASES


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