PIAC responded to the Australian Competition and Consumer Commission’s (ACCC) inquiry into the operation of water markets in the Murray-Darling Basin (MDB).
As we are not a direct market participant, we confined comments to Issue 5 – competition and market outcomes – as we consider this the key assessment of the failure of the market.
We contend ‘caps’ and their formulation, definition and operation represent the ‘rules and parameters’ of the market, and that they have been undermined in such a way as to result in fundamentally failed outcomes for the market and the communities that rely upon it.
We contend the sustainable diversion limit (SDL) and Ecologically Sustainable Level of Take (ESLT) are set in a way that is flawed, and are not based upon the best available science, and are not capable of achieving the intended outcomes.
We highlight the recent Royal Commission made a number of findings in relation to these and other issues surrounding market ‘caps’ and concluded that the flaws were so egregious as to represent maladministration, neglect, and misleading and unlawful conduct.
We support the findings of the Royal Commission and recommend the ACCC consider the current market parameters as unsustainable and unfit for purpose.