ACCC reluctance on Murray Darling Basin Plan socio-economic impacts

ACCC reluctance on Murray Darling Basin Plan socio-economic impacts

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Socio-economic impacts not part of ACCC water market remit.

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NARROW FOCUS: The Australian Competition and Consumer Commission's International and Agriculture general manager Gabrielle Ford said the main focus of the inquiry into water markets was on how to make them operate better.

NARROW FOCUS: The Australian Competition and Consumer Commission's International and Agriculture general manager Gabrielle Ford said the main focus of the inquiry into water markets was on how to make them operate better.

The Australian Competition and Consumer Commission has indicated it's reluctant to look into the socio-economic impacts of the Murray Darling Basin Plan, as part of its review of water markets.

Deniliquin, NSW, mixed farmer Louise Burge said she was concerned about the outcome of the ACCC inquiry, if such issues were not examined.

"If the ACCC finds a whole lot of adverse impacts, will it make recommendations that perhaps the original, theorised principle of free trade, may need some adjustment?" Ms Burge said.

Ms Burge said her concern was that if the ACCC didn't look at the broader issues, the reporting process may be inadequate.

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"Is the ACCC guided by the process of further freeing up trade, or will the ACCC acknowledge there are social, economic, physical and geographical barriers to trade?" she said.

The ACCC should look at the natural capacity of river systems, she said.

"There are multiple impacts from the concept of free trade," she said.

"Can the ACCC report to government, that free trade theory doesn't match free trade practice?"

ACCC Advocacy, International and Agriculture general manager Gabrielle Ford said the main focus on the inquiry was on how to make trading markets operate better.

"The question about socio-economic effects is a little bit tricky, because the direction from the government very specifically tells us socio-economic effects are not the ACCC's area," Ms Ford said.

"They are being viewed by another panel.

"I say it's tricky because trading does have flow-on economic effects and that flows on to community effects, we understand that, but we have to be quite focussed."

She said the ACCC was brought in, because its expertise was in analysing markets and why the outcomes were the way they were.

"We are going to focus on how the markets are operating, and what impact that has on prices ultimately - what are the driving forces, behind high prices?" Ms Ford said.

"We have to look at supply and demand factors, are their behaviours, regulatory issues, or gaps, that are causing any sub-optimal, or undesirable outcomes, or are there not?

"We have to keep an open mind, all round."

She said the ACCC had wide information-gathering powers.

"That means we do have the power to compel information, documents and oral testimony, from the relevant people, in relation to the issues we are looking at," Ms Ford said.

"We see this as a very powerful and important, tool if we are to carry out the inquiry robustly.

"It gives us the best possible chance of ensuring that the information we base our analysis and our recommendations on.

"It's the best chance we have to know that it's complete, and there are not things held back, that cloud our analysis."

Using the powers appropriately should give the public confidence the ACCC's processes would get to the bottom of issues that may be subject to speculation.

Carryover and the management of physical constraints would be two key issues the ACCC would be looking at.

"The government is looking for options that might improve the transparency and efficiency of the market, for trading water rights, and that might also include some things on enhancing the regulatory settings," Ms Ford said.

She said it would also be looking at how the practices and conduct of various participants affected pricing, and other, outcomes in water markets.

"We are going to be gathering a lot of trade data, for analysis," she said.

"What we will be looking for is those instances where there is a concentration of holdings, and the periods of time where people have a large holding, or a large enough holding to shift the market."

An interim report would be provided to the federal government by the end of May, with a final report in November.

The story ACCC reluctance on Murray Darling Basin Plan socio-economic impacts first appeared on Stock & Land.

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