Water charge and water market rules

Water market rules and three sets of water charge rules have been made under the Water Act:

More information

The Australian Competition and Consumer Commission (ACCC) has released guidance material to assist infrastructure operators, irrigators and Basin state governments and agencies to understand and comply with the rules. This material is available on the ACCC website.

Water market rules and termination fee rules

The Water Market Rules 2009 and the Water Charge (Termination Fees) Rules 2009 are now in full effect. A copy of the rules and associated explanatory statements is available on the Comlaw website.

Amendments to the termination fee rules to allow operators to add GST to termination fees

The Water Charge (Termination Fees) Rules 2009 were amended in 2011 to allow irrigation infrastructure operators to add goods and services tax (GST) to termination fees.

The amendments came into effect 17 February 2011. A copy of the amendments and the associated explanatory statement are available on the Comlaw website:

Summary of amendments

Summary of the Water Charge (Termination Fees) Amendment Rules 2011

Subsection 92(1) of the Water Act 2007 provides for the Minister for Sustainability, Environment, Water, Population and Communities to make and amend water charge rules. The Water Charge (Termination Fees) Amendment Rules 2011 amend the Water Charge (Termination Fees) Rules 2009, which relates to termination fees in the Murray-Darling Basin.

Part 1 – Preliminary

Rule 1 sets out the name of the amendments as the Water Charge (Termination Fees) Amendment Rules 2011.

Rule 2 specifies that the amendments commence on the day after they are registered on the Federal Register of Legislative Instruments.

Rule 3 sets out the schedule to amend the Water Charge (Termination Fees) Rules 2009.

Schedule – Amendments

Part 1, Rule 3 – The definition of total network access charge has been amended to explicitly exclude any amount of GST from the calculation of the charge.

Part 3, Rule 7 – The calculation of termination fee has been amended to provide that where GST is payable in respect of a taxable supply relating to the termination or surrender of the whole or part of a right of access, termination fees may be increased by an amount not exceeding the GST payable in respect of that taxable supply.

ACCC advice to the Minister, including draft amendments

Amendments to the water market rules and termination fee rules

On 10 October 2012 the Minister made amendments to the Water Market Rules 2009 and Water Charge (Termination Fees) Rules 2009 to address technical issues that arose during implementation. The amendments provide clarity for irrigation infrastructure operators and irrigators in the Murray-Darling Basin about how the rules operate.

The amendments came into effect on 17 October 2012. A copy of the amendments and the associated explanatory statement are available on the Comlaw website:

Summary of amendments

Amendments to the Water Market Rules 2009

Subsection 97(1) of the Water Act 2007 provides for the Minister for Sustainability, Environment, Water, Population and Communities to make, including amend, water market rules to apply in the Murray-Darling Basin.

Rules 1, 2 and 3 – Name of rules, commencement and effect

Rule 1 sets out the name of the rules. Rule 2 specifies that the rules commence on the day after they are registered on the Federal Register of Legislative Instruments. Rule 3 provides that the Schedule amends the Water Market Rules 2009.

Schedule – Amendments

Items 1 and 2 amend subrules 7(1)(b) and 7(1)(c) to provide that when an operator provides, on the request of an irrigator, details of his or her irrigation right, this must include in addition to the number of units or volume of water to which the irrigator is entitled, the details necessary to confirm the accuracy of the operator's calculation.

Item 3 amends subrule 7(2)(a) by deleting the reference to the current financial year in the formula to calculate the number of units or volume of water by which the irrigator's entitlement may be reduced under rule 7. The reference to the current financial year has been removed because it might have suggested that operators were required to give details of the volume of water an irrigator is entitled to receive in annual allocations, rather than, as the rule requires, the volume of water that an irrigator is entitled to receive under an irrigation right against the operator.

Item 4 amends rule 10 by inserting new subrules 10(1A), 10(1B) and 10(1C). Subrule 10(1A) permits operators that have converted their volumetric delivery rights to delivery rights on the basis of flow rate or other basis to require security against payment of future access fees in certain circumstances if the holder of an irrigation right applies for transformation and continue to hold water delivery right. Subrule 10(1A) also provides that the operator will calculate the security threshold by using the appropriate conversion formula, adjusted for any changes to delivery rights that take place after the date of conversion of those delivery rights.

Subrule 10(1B) applies where operators define delivery rights on a non-volumetric basis and initially issued a number of units under a water delivery right either equal to the number of units under an irrigation right, or that reasonably represents the person's delivery right as agreed in writing. Subrule 10(1B) permits an operator to require security against payment of future access fees if the holder of an irrigation right applies for transformation and continue to hold a water delivery right, and either:

  • transform the whole of their irrigation right; or
  • subject to subrule 10(1C), the number of units under the delivery right is more than 5 times the number of units the person is entitled to under the irrigation right retained after transformation.

Subrule 10(1C) provides that subrule 10(1B)(ii) does not apply if delivery rights have been restructured after they were first issued in a way that has altered the number of units under the delivery right, other than as a result of the holder acquiring, transferring or terminating the delivery units.

Amendments to the Water Charge (Termination Fees) Rules 2009

Subsection 92(1) of the Water Act 2007 provides for the Minister for Sustainability, Environment, Water, Population and Communities to make, including amend, water charge rules to apply in the Murray-Darling Basin. The Water Charge (Termination Fees) Rules 2009 were made in accordance with subsection 92(1).

Rules 1, 2 and 3 – Name of rules, commencement and effect

Rule 1 sets out the name of the rules. Rule 2 specifies that the rules commence on the day after they are registered on the Federal Register of Legislative Instruments. Rule 3 provides that the Schedule amends the Water Charge (Termination Fees) Rules 2009.

Schedule – Amendments

Item 1 amends the definition of 'total network access charge' to mean the total amount that would have been payable to the operator in respect of a full financial year by a terminating irrigator, if termination or surrender had not occurred.

Item 2 amends rule 5 by inserting a new subrule 5(3). Subrule 5(3) prohibits operators from charging or receiving any fees that relate to the access (and services provided in relation to that access) that has been terminated or surrendered by an irrigator, in respect of a financial year commencing after the termination or surrender.

Subrule 5(3) is a civil penalty provision.

Item 2 amends paragraph 6(1)(b) to prohibit operators from imposing termination fees where the operator seeks to terminate access for breach of contractual obligations associated with the act of trading the whole or a part of a water access right.

Item 3 amends paragraph 7(a) to ensure that the maximum termination fee permitted under rule 7 is calculated based on the total network access charge applicable at the date the notice of termination is given, or the date specified in the notice for termination to take effect, whichever is later.

ACCC advice to the Minister, including draft amendments

Water planning and management information charge rules

The Water Charge (Planning and Management Information) Rules 2010 are in full effect. A copy of the rules and the associated explanatory statement are available on the Comlaw website.

Summary of the Water Charge (Planning and Management Information) Rules 2010

Subsection 92(1) of the Water Act 2007 provides for the Minister for Climate Change, Energy Efficiency and Water to make water charge rules which apply in the Basin States (New South Wales, Victoria, Queensland and South Australia) and the Australian Capital Territory. The water charge rules apply to 'regulated water charges', which include charges for water planning and water management (WPM) activities.

The Water Charge (Planning and Management Information) Rules 2010 relate only to WPM activities.

Rules 1, 2, 3 and 4 - Name of rules, commencement and definitions

Rule 1 sets out the name of the rules.

Rule 2 specifies that the rules commence on the day after they are registered on the Federal Register of Legislative Instruments.

Rule 3 sets out the objects of the rules which are to improve WPM activity pricing transparency and the availability of information about WPM charges.

Rule 4 sets out definitions of certain terms that are used in the rules. 'Regulated charge' is defined to mean a WPM charge to which Part 4 Division 1 of the Water Act applies. This Division applies to regulated charges to the extent that the charge relates to Basin water resources, water service infrastructure that carries Basin water resources or water that has been taken from a Basin water resource, or water access rights, irrigation rights or delivery rights in relation to Basin water resources. The Division does not apply to charges in respect of urban water supply activities beyond the point at which the water has been removed from a Basin water resource.

The rule defines a transitional period beginning on the commencement date and ending on 30 June 2011.

Rule 5 - Publication of information about regulated charges

Under subrule 1 the person responsible for publishing information about regulated charges is the person determining the charge.

Subrule 2 sets out the information relating to the regulated charge that is required to be published.

Subrule 3 sets out when the information is required to be published.

Transitional provisions

Information about regulated charges that took effect before the commencement date and relate to a period that ends after the transitional period must be published before the end of the transitional period.

Information on regulated charges that took effect on or after the commencement date but before the end of the transitional period must be published no later than 3 months after the date on which the charge takes effect or the end of the transitional period, whichever is later.

Charges which take effect after the end of the transitional period

Information about regulated charges which take effect on a date after the end of the transitional period must be published before the charge takes effect. If there is a change to the charge, such as the description or the amount, the information must be published before the change takes effect.

Subrule 4 requires the information referred to in subrule 2 to be published:

  • in the Australian Government Gazette; or
  • while the regulated charge is current, on the website of the person setting the charge, or the website of the person or agency to which the charge is payable.

The information must also be made available while the charge is current during business hours at the principal place of business of the person that determined the charge, or the person or agency to which the charge is payable.

Subrule 5 requires notice of the availability of information to be published in newspaper(s) circulating in the areas where any person liable to pay the charge resides or carries on business.

Under subrule 6 the person determining the charge must provide a copy of the information referred to in subrule 2 if a person requests it, as soon as possible after the request is made.

ACCC advice to the Minister, including draft rules

Water infrastructure charge rules

The Water Charge (Infrastructure) Rules 2010 were registered on 11 January 2011 and took legal effect from 12 January 2011. A copy of the rules and the associated explanatory statement are available on the Federal Register of Legislative Instruments website.

The rules were developed on the basis of advice from the Australian Competition and Consumer Commission (ACCC), and further public consultation. A copy of the ACCC's advice to the Minister in relation to the rules, including further advice on accreditation under the rules, are published below.

ACCC advice to the Minister, including draft rules

Public submissions