Water markets and trade

Water markets

The South Australian River Murray is part of the southern-connected Murray-Darling Basin water market which is a connected water resource covering parts of South Australia, New South Wales and Victoria.

The southern-connected Murray-Darling Basin is one of the most mature water markets in the world and is based on a 'cap and trade' system where the cap represents the total pool of water available for consumptive use and water can only move among licence holders, and to new businesses, by trade.

There are also a number of established and emerging water markets operating for other prescribed water resources in South Australia, including parts of the South East, the Mount Lofty Ranges and elsewhere in the South Australian Murray-Darling Basin.

The department is committed to improving the efficiency and effectiveness of water trade markets in South Australia and is continuing work on a range of initiatives to improve information provision and reduce barriers to trade.

Water trade

Water trade allows water to flow to where it can be used most productively, or has the highest value, through the redistribution of water rights including water licences, water access entitlements and water allocations.

Water trading has become a vital business tool for water rights holders, providing an effective way of managing changing use requirements, climate variability and reallocating water during prolonged periods of drought.

The trade of a water right can mean a transfer of ownership, a change of location, or both. Trade can also be undertaken on a permanent or temporary (i.e. lease) basis, and a person/s may seek to trade all or only part of their entitlement or allocation.

In general, the department approves trade applications provided: there is a sufficient volume of water available to trade; all associated fees, charges and debts have been paid; and the trade meets relevant trading rules and water allocation plan principles.

Trading rules and water allocation plan principles aim to ensure that water trade does not result in detrimental impacts to the environment, the water resource or other water users.

A record of all water trades approved in South Australia by the department, including price information (when provided), is publicly accessible for viewing and download through the South Australia's Water Register.

All statewide water licence and permit application forms, including those that facilitate water trade are available for download.

Water market reform

On 11 October 2022, the Minister for the Environment and Water, released the Water market reform: final roadmap report. The Roadmap includes 23 recommendations to drive water markets reforms. The Roadmap addresses the findings of the Australian Competition and Consumer Commission (ACCC) Murray–Darling Basin water markets inquiry final report, published in March 2021.

On 07 December 2023, the Water Amendment (Restoring Our Rivers) Act 2023 was enacted. The Australian Government is working with all Basin jurisdictions to implement the water market reforms. Information about the water market reforms and consultation can be found here.

Making water markets more transparent in the Murray-Darling Basin

The Australian Government is working with all Basin jurisdictions to increase the transparency and integrity of Murray-Darling Basin water markets.

The following information is now required in relation to applications to trade or transfer water:

• Strike date (date the price was agreed) must be recorded where requested.
• Reason for trade must be accurately specified.

Furthermore, in accordance with the Water Amendment (Restoring our Rivers) Act 2023, from 1 July 2024 the following obligations apply to persons providing information to the Department for Environment and Water (as a water market authority) for applications involving trade or transfer of tradeable water rights:

• Persons making applications must ensure that all information on transfer forms submitted to the Department for Environment and Water is comprehensive and accurate.
• Persons making applications must keep records regarding both the reason for trade and price for a minimum of 5 years.

For further information on the new data accuracy and record keeping requirements, please visit the FAQ’s developed by the Inspector-General of Water Compliance.