Larvatus Prodeo

In a move that will undoubtedly go down well with their constituents, the South Australian government is going to sue the “upstream states” in the High Court to force trade in Murray-Darling Basin water to be de-restricted. Mike Rann’s statement to the states that they want the High Court to invalidate Victoria’s 4% cap on water trading , which prevents more than 4% of the water in a particular irrigation system being sold out of that system in any one year.

John Quiggin’s view is that the restrictions are undesirable, and mainly benefit irrigation companies at the expense of the river and farmers themselves. I’m not sure that’s the whole story; if water is traded out of an irrigation district, the burden of maintaining the infrastructure will be shared amongst fewer farmers, and ultimately render those districts financially unsustainable. Frankly, I suspect that such districts are probably unsustainable anyway, but the Victorian government hasn’t been brave enough to bite that particular bullet yet. In any case, John also speculates that the basis of the challenge will be section 92 of the Constitution, which states:

On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

Continue reading ‘SA to challenge Victoria’s water trading rules in High Court’