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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2008-06-04 Daily Xml
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WATER TRADING

Mr WILLIAMS (MacKillop) (14:46): Does the Minister for Water Security concede that her actions have directly led to insider trading in the water market? Today The Weekly Times,published in Victoria, reveals that the minister admits that she discussed her pending carryover announcements with some irrigators before the 7 February announcement. The announcement resulted in temporary water value doubling from under $200 a megalitre to around $400 a megalitre. The CEO of South Australian water broker Waterfind, Mr Tom Rooney, is quoted in the same article as saying that 'some evidence that information about water policy announcements has leaked and in turn impacted water market behaviour'. The opposition has been told that some three to four days before the minister's formal announcement, a spike in the volume of water traded occurred with the price increasing immediately after the announcement.

The Hon. K.A. MAYWALD (Chaffey—Minister for the River Murray, Minister for Water Security, Minister for Regional Development, Minister for Small Business, Minister Assisting the Minister for Industry and Trade) (14:47): This is a very amusing question from the shadow minister for water security who actually has a lack of understanding and has also not taken time to consider the chain of events. What actually happened in the time frame that The Weekly Times refers to is that two announcements were made. On 7 February, there was a carryover policy announcement made: no surprises. That carryover policy had been widely consulted with the irrigation community; in fact, a draft policy was released in mid-January to industry leaders for consideration.

What actually happened on the day that the prices spiked—and this is really interesting—the day that the prices spiked coincided with—

Mr Williams interjecting:

The SPEAKER: Order! The member for MacKillop has already been warned.

The Hon. K.A. MAYWALD: The volume of trade increased and the price increased two days prior to the carryover announcement on 7 February, because on 5 February there was another announcement. That announcement was that allocations were going to remain at 32 per cent. That information probably affected the price, as does any announcement that actually puts information into the marketplace about the resource availability. The spike occurred on 5 February, according to The Weekly Times, and The Weekly Times have tried to link that to the carryover announcement on 7 February. It had nothing to do with it. What caused the market to react was an announcement that the 32 per cent was likely to be maintained for the remainder of the year.

Mr WILLIAMS: I rise on a point of order. The relevance of the answer being given by the minister to the point I made—

Members interjecting:

Mr WILLIAMS: No, I am trying to get the minister to answer the question that I asked.

The SPEAKER: Order! There is no point of order. The minister is answering the substance of the question. If there is something that the member for MacKillop wishes to clarify then there is ample opportunity for him to do it, but there is certainly nothing the minister has said that strays from the substance of the question.

Mr WILLIAMS: I beg your indulgence, sir, but you have not heard my point of order. The point of order was that the question was nothing to do with the price spike before the announcement on 7 February. It was to do with a volume spike three to four days, not two days, before the announcement on 7 February.

The SPEAKER: Order! There is still no point of order. The minister is answering the substance of the question. The substance of the question was whether statements the minister had made had led to insider trading. That was the question the member for MacKillop asked. The minister is answering that question. If he does not like her answer, then he has other opportunities to make that known to the chamber or to follow up with other questions, but the minister is certainly not engaging in debate and is certainly answering the substance of the question.

The Hon. K.A. MAYWALD: The carryover announcement on 7 February was expected by industry. It was expected by industry because we had been consulting for well over two weeks before there was any impact in any markets. People knew that the state government was going to introduce a carryover policy. We had actually released the document to industry leaders for consultation. Those industry leaders were seeking input from their membership in relation to a carryover policy and what it would look like, and we told the industry that we would be making an announcement in relation to carryover policy. That is not insider trading: that is information that was out in the public arena. It is good public policy to consult with people who are going to be impacted by decisions, and that is exactly what we were doing.

The Hon. M.J. Atkinson interjecting:

The SPEAKER: The Attorney-General will come to order!

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