Earlier this month, the Australian government implemented the Register of Foreign Ownership of Agricultural Land Amendment (Water) Act aimed at tracking foreign ownership of water rights.
The amendments form part of the government’s broader focus on understanding what property rights are owned by foreign interests. As such, a register has been established to track all foreign ownership of water rights in Australia. Effectively this recognises that, in many instances, water rights are as important as interests in land and it is therefore essential that the government understand who owns them.
In the last decade, water rights have become easier to trade, markets have been established and the business of water broking has become an important part of the agricultural business community. This has, in turn, led to a rise in the prevalence of water speculators and accumulators.
Previously, water rights tended to be traded so that they could be used immediately for irrigation, but now water brokers are developing products which make deferred settlement and future trading a reality making it more attractive for new entrants who aren’t directly involved in irrigation to enter the market. From a policy point of view, there is seemingly a risk that these speculators could significantly impact water security and, consequently, food security.
This policy decision gives further credence to what we already know, that water is a key asset to facilitate any agricultural production. Water rights attached to land can enhance the value and productive capacity of that land.
Now that the changes have come into force, what will it mean for you?
Unless you are a foreign entity, nothing at all. However, if you are a foreign entity (or become a foreign entity), then you will need to lodge annual returns of your water rights ownership, and updates to your holdings if you acquire or dispose of water rights during the year.
The policy amendments can be found here .
If you would like to discuss any aspect of water law, please contact Mark Henderson, our water law expert.