The first statewide review of the effectiveness of Victoria’s water markets has now been completed and released today.

This is part of the Victorian Government’s commitment under action 9.3 of Water for Victoria to review and report on how well Victoria’s water markets are operating against the elements of an effective water market. The review covered all Victorian water markets, including the northern, southern and western regulated surface water markets; unregulated surface water markets; and, groundwater markets.

Through this review, Victoria is continuing to demonstrate leadership in the active monitoring and development of water markets to make sure that they continue to work efficiently, with effective governance frameworks and trading rules in place to protect existing entitlement holders and the environment.

This first review was conducted by independent consultants (Aither, in conjunction with DG Consulting) in collaboration with the Department of Environment, Land, Water and Planning and a wide variety of stakeholders including water resource managers and regulators (both state and Commonwealth); urban and rural water corporations; environmental water managers; Traditional Owner representatives; various industry representatives; and individual irrigators.

The independent report is accompanied by a short document which summarises the findings from the review and the next steps the Department will be taking to improve the effectiveness of water markets across the state.

Whilst this review found that overall Victorian water markets are effective, we need to make sure water markets continue to develop to match the level of demand and sophistication in the market.  The next steps include statewide actions to further:

  • modernise compliance frameworks;
  • improve public water market information (including for new water market participants such as Traditional Owners);
  • improve water market monitoring to inform policy;
  • improve monitoring of anti-competitive behavior potential and communication of current regulations;
  • improve clarity and streamline water resource management and planning functions; and,
  • ensure the Water Register remains contemporary.

The Findings and Actions document also includes other specific additional actions in each market. The review’s findings will help guide the next steps in developing and improving markets across the state.

In addition to this first review of the effectiveness of Victoria’s water markets, two additional reports are now also available on the history and development of water markets in Victoria. These are reports on Early Trends in Groundwater Trade in Victoria and The Evolution of Water Markets. These reports are available on the water trade reports page here.

This first review of water market effectiveness has established an assessment framework which can be used to monitor water markets into the future and these actions will support continued oversight of our water markets.

Through acting on the findings from this review, Victoria will continue to lead the way in water market development in Australia.  The Government will continue to monitor the market and change settings when and where necessary to meet the needs of water users who are increasingly reliant on it.