Foreign water register working just fine: Productivity Commission report

The organisation found the current foreign water entitlement ownership register played a small but useful role and apart from a few tweaks should continue in its current form.

The Productivity Commission's draft report noted there was support for foreign investment within the agricultural sector, but a sizeable share of the broader community had unease about foreign investment, and often conflated it with other water market concerns, such as water market manipulation.

Canadian holds the most foreign owned Australian water (1.8pc of total entitlements), closely followed by China (1.7pc) and the United States (1.7pc).

The current system requires foreign persons to notify the Australian Taxation Office if they acquire a water asset.

The Productivity Commission said the information provided by the register was "sufficient for its limited purpose" of providing transparency and community confidence, and its reports were clear and easy to use.

"There is not a compelling case to provide more granular information on foreign ownership, such as at the water source or catchment level," the report stated.

"Such information could be used to identify registrants, violating confidentiality provisions, and potentially damage Australia's attractiveness as a destination for foreign investment.

"There is no alternative approach to the current register that would provide the appropriate transparency at a lower cost."

There is scope for some minor tweaks to improve the current register, such as including data on the proportion of foreign owners of water entitlements that also hold agricultural land.

It also recommended states and territories should link to the register from their water information portals.

Submissions to the draft report are open until September 10.