The US and China are Australia’s largest sources of foreign investment in water entitlements, a new report has revealed.
The Federal Government’s Register of Foreign Ownership of Water Entitlements, which was released in March, shows 10.4% of Australia’s total water entitlements, or 4035 GL, have a level of foreign ownership.
Both the US and China have 1.9% of the total water entitlement, followed by the UK with 1.1%.
This water is mainly used for agriculture and mining, which account for 66.5% and 26.3% respectively.
The register reports on water assets with a level of foreign ownership of at least 20%, which means there might also be a significant portion of Australian equity in the same water entitlement.
Legislation was passed in 2016 requiring foreign entities to inform the Australian Taxation Office (ATO) of any water access entitlements they own.
The ATO has been collecting this information since July 2017, but this is the first time it has been made public.
In a statement, Treasurer Josh Frydenberg said the water register, along with the agricultural land register, would provide greater transparency about foreign investment levels and trends in the market.
“Foreign investment plays an important role in the growth and productivity of our regional communities and the Government continues to welcome foreign investment where it will support our national interest,” he said.
Group CEO and President of Australia’s water trading organisation Waterfind Tom Rooney told the ABC it was alarming to find out one in every 10 water entitlements was foreign owned.
“I think part of the concern is … the unfair advantage, which some of these foreign entities are getting, in terms of the cost of finance and/or access to cheap money,” Rooney said.
However, Agriculture Minister David Littleproud said the numbers shouldn’t be cause for concern.
“At the moment, there’s a small percentage of water owned by foreign interests and much of that is by one property – Cubbie station,” he said.
State of play
Just over half of all water entitlements on issue in Australia are located in the Murray-Darling Basin. Of this, 9.4%, or 1800 GL, is foreign owned.
New South Wales and the Australian Capital Territory have the greatest amount of foreign-owned water entitlements by volume with a combined 1306 GL. Queensland is next with 1219 GL, followed by Western Australia with 995 GL. The remaining states all have less than 250 GL each.
All foreign investors with an interest in a contractual water right or registrable water entitlement, which includes irrigation rights, the right to hold water, and/or the right to take water from a water resource in Australia, are required to register with the ATO.