The Australian Government has announced new requirements for water trades within the Murray-Darling Basin, which will come into effect from 1 July 2024. These obligations will mean that all traders will face the same record keeping rules, regardless of which Basin state they trade in.

While Victoria already requires water traders to accurately provide the price and reason for trades on applicable trade forms, after 1 July 2024, Commonwealth legislation will mandate that water traders across the Basin record the price and reason for applicable trades and keep comprehensive records for a minimum of five years. 

These changes are part of the Commonwealth’s actions in line with the Water Market Reform Roadmap, addressing the Australian Competition and Consumer Commission’s inquiry into Murray-Darling Basin water markets. They are also part of a broader suite of water market reform measures outlined in the Water Amendment (Restoring Our Rivers) Act 2023 (Cth).

The new rules affect both buyers and sellers of ‘eligible tradeable water rights’, as well as water market intermediaries.

Examples of eligible tradeable water rights in Victoria include water shares, allocations, take and use licence, and place of take approvals.

The Commonwealth’s Department of Climate Change, Energy, the Environment and Water (DCCEEW) have prepared a fact sheet that can be found here (scroll to 'download'). DCCEEW are the lead policy agency for the reforms and any queries can be directed to their Water Markets Team inbox at Water.Markets@dcceew.gov.au.

What this means for Victoria

Victorian Water market participants should be aware of the following changes that will apply from 1 July 2024:

• A buyer, seller, and broker (intermediary) involved in trading a Victorian eligible tradeable water right must continue to provide accurate price and reason for trade information on application forms. These changes mean they now must also keep records of the reason for trade and price for a minimum of five years, including records substantiating that information.
• The changes apply only to information currently requested trade forms. If a form does not require price and/or reason for trade details, there is no obligation to provide or record that information.
• Victorian water trade applications that are affected are:
  • Allocation trade applications (online and paper)
  • Water share transfers
  • Limited term transfers
  • Take and use licence permanent and temporary trades
  • General place of take extraction share transfers
• There will be new penalties for non-compliance, enforced by the Commonwealth.
• By 1 July 2026 all trades or transfers of eligible tradeable water rights will require provision and recording of both reason for trade and price details. All DEECA forms will be updated accordingly.
• These requirements do not apply retroactively.

What this means for brokers (intermediaries)

• Brokers will be required to provide price and reason for trade information (where applicable) back to both buyers and sellers for record-keeping purposes, as well as retain records for a minimum of five years.

Removal of the ‘grandfathered’ status exemption for tagged water entitlements

The Commonwealth is also removing the exemption for tagged water access entitlements previously considered ‘grandfathered’ under section 12.23(2) the Murray-Darling Basin Plan Water Trading Rules. The removal of this exemption will occur from 1 July 2024.

For more information about what this means for Victoria please see this news item.

PDF: Frequently Asked Questions – Removal of the 'grandfathered' status exemption for tagged water entitlements (314kb)