Review of prices for the Water Administration Ministerial Corporation

11 Consent transaction charges
Stakeholders generally accepted the sliding scale fee structure, but Gwydir Valley
Irrigators Association questioned whether the current scale accurately reflects greater
effort in the consent transaction process. For example, it questioned whether there
was a difference between a 300mm and 100mm pump, and that this issue should be
reviewed. We note that in response, NOW indicated that the larger the pump size,
the higher the likely impact on the environment and other third parties, and that
therefore the pump size differential used in the sliding scale is reasonable.
Stakeholders also generally supported NOW’s proposed introduction of the 4 ‘new
water access licence granted by the Minister’ category of consent transaction, on the
proviso that there are no cross-subsidies in the transaction charges across different
valleys (ie, tidal pool licences and Great Artesian Bore conveyance licences).
However, some stakeholders raised the following concerns:
Gwydir Valley Irrigators Association disagreed with fees being applied to the
initial issuing of floodplain harvesting, Great Artesian Bore conveyances, and
tidal pool licences, as these are all processes connected with the move from the
Water Act 1912 to the Water Management Act 2000 and, therefore, should not result
in an extra charge to users. We consider that these charges should be applied the
same way as any other licence category based on the ‘impactor pays’ principle,
and that no special exception should be given due to the move to the Water
Management Act 2000.
Some stakeholders argued that it was premature to consider fees in relation to a
floodplain harvesting licence because the services and efficiencies that NOW will
provide are unknown at this stage. They also stated that these licences are not
expected to be issued within the 2011 Determination period. Further, NSW
Irrigators Council and Gwydir Valley Irrigators Association identified that the
NSW Government has received Commonwealth funding for issuing floodplain
harvesting licences and access approvals. On that basis, it argued that there is no
justification for applying an additional charge to recover what it perceives are the
same costs. We note that the initial funding was intended to cover the set up costs
involved in issuing of floodplain harvesting licences, and the consent transactions
fees relate to processing the individual applications themselves, similar to all
other consent transaction fees.
In response to the Draft Report, many stakeholders (including Murrumbidgee
Irrigation 175 and Murray Irrigation 176 ) have reiterated their concerns that overheads
related to consent transactions should not be recovered through water management
charges (ie, smeared across all water users). They have argued that IPART’s
approach results in water users subsidising the costs of water traders.
Murrumbidgee Irrigation and Murray Irrigation have argued that because a
proportion of the overhead costs incurred by NOW are directly related to consent
transactions, including these costs within the water management charges results in a
cross subsidy. While we note that a small component of the overheads that relate to
175 Murrumbidgee Irrigation submission, 2 December 2010.
176 Murray Irrigation submission, 30 November 2010.
186 IPART Review of prices for the Water Administration Ministerial Corporation