Trade
Water trading has been allowed in Victoria since 1991 after the Water Act 1989 allowed permanent transfers of rights and set trading regulations.
In 2004 the Council of Australian Governments (COAG) signed the National Water Initiative to reform the national water agenda and achieve a nationally compatible water market.
Victoria has developed policy and legislative approaches to support interstate water trade, including passing the Water (Resource Management) Act in 2005. This paved the way for reforms in water use and management, including trade and the unbundling of water entitlements.
Most water trade in Victoria is in the regulated water systems in northern Victoria, the Goulburn and Murray river systems.
Water can be traded as trade of allocation available in a given season, or through permanent trade of ongoing entitlement.
Tagging allows water allocated to an entitlement issued in one State to be physically taken in another. Permanent tagged water trading was introduced in 2007 to allow Victoria, New South Wales and South Australia to make interstate-tagged entitlement transfers.
The water market provides the opportunity for the most efficient uses of water. Victorian trading rules aim to promote this as much as possible while preventing adverse impacts on other water users and the environment.