Australian Bankers' Association welcomes funding toward the
development of a national water system

Sydney, 16 November, 2009: The Australian Bankers’ Association (ABA) welcomes the Federal Government’s announcement of $56 million in funding for the development of a national water market system.

The ABA says it’s positive that the funding is being put towards a national system  because there are still differences between water registers in each State and Territory.

David Bell, Chief Executive of the ABA, said: “The banking industry supports policies for the sustainable resource management of water nationally.”

“Farmers need to be able to use their water entitlement, like they do their land, to obtain access to finance. Due to the impact on land values, the separation of water from land means that a bank needs to be able to have a mortgage directly over the water, in addition to the land, so that a farmer’s access to finance is not compromised.”

“However, to be able to do this, banks need reliable registers and clear titles so that banks and other third parties are informed before the water is traded, ” he said.

To ensure that financing issues do not distort the trade of water from one area to another, the title given to water and the registries used to administer its ownership need to be equivalently robust.

Mr Bell said: “It is vital that banks, which operate across Australia, have nationally consistent water registers so that administrative differences between each State and Territory are abolished.”

“If a true national system emerges then banks can set aside costly State-by-State compliance programs and exchange it for an efficient national model. A national system of secure registers could minimise conveyancing costs and time.”

Also, for compatible registers to be effective, the title given to water by the States and Territories also needs to be equivalent.  This is important to avoid distortions in financing the trade of water between different States.

Distortions will occur if there are differences in the robustness of titles and the protections afforded third-party interests such as banks, in different States and Territories.

The ABA hopes that this funding does deliver the promised common registry system, the national portal and interstate processes to speed up cross-border water trades.

For further information:

Heather Wellard, ABA PR
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
           
ENDS