The first ever trading of Commonwealth water holdings signals a new era of water management that can deliver better benefits to both the environment and the economy, Parliamentary Secretary for the Environment Simon Birmingham said today.
“The Commonwealth Environmental Water Holder (CEWH) will today release the Water Trading Framework and announce the first sale of Commonwealth water holdings,” Senator Birmingham said.
“The framework outlines the requirements and standards for Commonwealth activity in the water market, allowing our water portfolio to be used more effectively by better enabling the targeting of environmental priority areas from year to year.
“It is the governments expectation that water trading should boost both environmental outcomes and agricultural production, providing a true win-win result.
“Even though the Water Act 2007 has always allowed for trading to occur, Labor's water policy saw too many non-strategic purchases of water and a static, stagnating portfolio. The Coalition has made the realisation of the benefits of trade an early priority.
“Selling a portion of the annual water allocations that the CEWH has determined are not required to meet current environmental requirements will open up a range of possibilities to invest the proceeds in strategic annual purchases that enhance delivery of the Murray Darling Basin Plan.
“The timing of the first trade to be undertaken means there will also be significant benefit to agricultural production in the region. This will be good news for irrigators who will be keen to secure more water during this period of hot and dry weather.
“While the Water Act outlines the circumstances in which the CEWH may decide to trade, it does not provide any conditions as to how that trade occurs. Developed in consultation with stakeholders and industry, the Trading Framework closes that gap by providing protections to other market participants, measures to minimise impacts on the water market and steps to address any potential CEWH access to market sensitive information.
“The government has also ensured the Trading Framework has an inbuilt review mechanism that is triggered three years from the first CEWH trade to ensure it is functioning as intended, achieving enhanced environmental, social and economic outcomes.”
For more information on the Commonwealth Environmental Water Trading Framework go to http://www.environment.gov.au/aggregation/commonwealth-environmental-water-office.