The Victorian Government has strengthened the state's zero-tolerance approach to water theft.
Water Minister Lisa Neville has accepted recommendations from an independent review into water theft compliance measures, which she said boosted water market transparency.
"Victoria is a leader in compliance and water management - particularly in the context of the Murray Darling Basin over recent years - and we will continue to lead the way," Ms Neville said.
"Water theft is not a victimless crime, and with limited water to go around, these changes will benefit the entire water market."
In May, the Minister appointed former Victorian Auditor General Des Pearson to undertake a comprehensive independent review to ensure Victorian irrigators and water users had a robust compliance and enforcement system.
Mr Pearson also looked at the checks and balances that were in place to help continue to build confidence in the market.
Ms Neville said Victoria a strong track record when it came to compliance, and the review found most irrigators and water users were already doing the right thing.
While compliance levels were relatively high and processes were already in place to identify and manage water theft - the review identified several areas where compliance and enforcement approaches could be further strengthened.
The report set a clear target for rural water corporations to reduce existing rates of water theft, currently up to 3.6 per cent of the rural water volume, to less than 1pc.
To reach the 1pc target, new regulations were now in place that enabled water corporations to issue on-the-spot fines to water users for water theft.
Better communication would also ensure water users knew when their accounts were running out.
The timing of enforcement processes would be improved, so that large volume couldn't be pumped when accounts were negative.
Other changes include rural water corporations undertaking more rigorous management and monitoring of their compliance and enforcement functions, along with finalising metering action plans and addressing enforcement issues, which inhibited on-ground compliance.
There will also be improved and timely risk-based reporting on compliance and enforcement provided to water corporation boards and the Department of Environment, Water, Land and Planning.
Mr Pearson will return in July 2021 to evaluate and report on the implementation of the recommendations.
The actions build on new legislation that came into effect in October last year that increased the maximum fine for intentional water theft to $990,000 for companies and $198,000 for individuals.
The legislative change also allows water corporations to suspend or cancel licences for water theft.
The Victorian Farmers Federation welcomed the adoption of all recommendations in the Pearson Water Compliance and Enforcement Review.
Water Council Chair Richard Anderson said Victorian farmers expected to see all state governments taking similar action to stamp out unauthorised overuse of water.
"We need all governments across the Murray Darling Basin to take a strong stance on unauthorised overuse and the VFF calls on all Basin States to adopt a similar approach to Victoria," Mr Anderson said.
"Earlier this year the VFF wrote to all Basin State governments calling for tougher enforcement on irrigators who do the wrong thing by taking water they do not own.
"Some irrigators who divert directly from the Murray River are using more water than they have in their water accounts and are then paying it back later in the season."
He said overuse in South Australia caused a spike in water prices as irrigators scrambled to top up their accounts.
"This means some irrigators have purchased water late in the season to top up their over-use, saving them $400 per megalitre than if they bought the water around the time they actually used it .
"For large corporates this can save them multiple millions of dollars, by simply taking someone else's water."
Mr Anderson said he wanted to ensure farmers would be represented with a series of workshops proposed to take place between government and water corporations.
"It is important that a farmer voice is present at all of these discussions," Mr Anderson said.
"As always, we'll be seeking a seat at the table for the VFF."
Details of the Compliance and Enforcement Review can be found at water.vic.gov.au/compliance.
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