Water Charge Amendment (Termination Fees) Rules 2020

Administered by Department of Agriculture, Fisheries and Forestry

Legislation au F2020L00815 Rules Not in force Legislative Instrument

Legislation content

 

Explanatory Statement

 

Issued by Authority of the Minister for Resources, Water and Northern Australia

 

Water Act 2007

 

Water Charge Amendment (Termination Fees) Rules 2020

 

Legislative Authority

 

The Water Act 2007 (the Water Act) makes provision for the management of the water resources of the Murray-Darling Basin, and for other matters of national interest in relation to water and water information, and for related purposes.

 

The Water Charge Amendment (Termination Fees) Rules 2020 (Amendment Rules) are made under subsection 92(1) of the Water Act.

 

Subsection 92(1) of the Water Act provides that the Minister may make rules (to be called water charge rules) that apply in Basin States that regulate and deal with water charges, and contribute to achieving the Basin water charging objectives and principles.

 

The Amendment Rules insert subrule 74(6) in the Water Charge Amendment Rules 2019 (2019 Amendment Water Charge Rules), which will in turn include that provision in the Water Charge Rules 2010 with effect from 1 July 2020.

 

Purpose

 

The purpose of the Amendment Rules is to make a minor or technical amendment to clarify the limit on termination fees under certain circumstances. This has the effect of imposing a quantitative cap on termination fees in the circumstances set out in subrules 71(2)(a) and (c), including where a customer gives less than 6 months’ notice of exit to the relevant infrastructure operators.

 

Background

 

On 21 September 2016, the Australian Competition and Consumer Commission (ACCC) provided its Review of the Water Charge Rules: Final Advice to the then Minister for Water, including proposed amendments to the water charge rules.

On 3 April 2019, pursuant to the ACCC’s advice, the former Minister for Water then made the Amended Water Charge Rules to combine the three sets of rules (the Water Charge (Infrastructure) Rules 2010, the Water Charge (Planning and Management Information) Rules 2010 and the Water Charge (Termination Fees) Rules 2009). The rules, as amended, will be known as the Water Charge Rules 2010. To allow operators time to prepare for commencement, the Amended Water Charge Rules are due to commence on 1 July 2020.

The 2019 Amendment Water Charge Rules relevantly amend the current Water Charge (Infrastructure) Rules 2010 to repeal Part 9 and replace it with new Part 10 which deals with termination fees.  The Amendment Rules will, by amending the 2019 Amendment Water Charge Rules, make minor amendments to new Part 10.

 

The Amended Water Charge Rules are designed to improve pricing transparency and make it easier for operators to comply. The broad intent of the amendments are to:

  1. make schedule of charges requirements clearer
  2. simplify the calculation of termination fees, and
  3. simplify the regulatory framework by largely returning the regulation of water infrastructure charges levied by on-river infrastructure operators back to Basin States.

 

Impact and Effect

 

It is not anticipated that the Amendment Rules will have any adverse implications for stakeholders, as the Amendment Rules are technical in nature. The Amendment Rules will have the effect of providing greater certainty for water users and infrastructure operators.

 

Consultation

 

The Department of Agriculture, Water and the Environment has consulted with the ACCC on the development of the proposed Amendment Rules. Basin States, infrastructure operators within the Murray-Darling Basin and the public have been invited to make submissions. A public notice was published on the department’s website on 27 May 2020 (www.agriculture.gov.au/water/markets), and in a nationally circulating newspaper, as well as a newspaper with an agribusiness focus circulating in all Basin States, consistent with the requirements in the Water Regulations 2008. No submissions were received during the four week public notice period.

 

The Office of Best Practice Regulation (OBPR) was consulted by the ACCC to inform the Review of the Water Charge Rules: Final Advice. The ACCC certified that the Final Advice meets the OBPR’s requirements for a process and analysis equivalent to a Regulation Impact Statement (RIS). The estimated change in regulatory costs to business, community and organisations were agreed by the OBPR (ID: 19056).

 

Details/ Operation

 

The Water Charge Amendment Rules 2019, and therefore the Water Charge Rules 2010, are amended to prescribe the limit on termination fees under certain circumstances for the purpose of the Water Act.

 

Other

 

The Amendment Rules are compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.

 

The Amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003.

Attachment A

 

Details of the Water Charge Amendment (Termination Fees) Rules 2020

 

Section 1 – Name

 

This section provides that the name of the Amendment Rules is the Water Charge Amendment (Termination Fees) Rules 2020.

 

Section 2 – Commencement

 

This section provides for the Amendment Rules to commence the day after the instrument is registered.

 

Section 3 – Authority

 

This section provides that the Amendment Rules are made under section 92 of the Water Act 2007.

 

Section 4 – Schedules

 

This section provides that each instrument specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned. This is the formal enabling provision for the amendments to the 2019 Amendment Water Charge Rules made by Schedule 1 of this instrument.

 

Schedule 1 – Amendments to the Water Charge Amendment Rules 2019

 

A termination fee is a fee levied in accordance with subrule 71(1) of Water Charge Rules 2010, to be included by the 2019 Amendment Water Charge Rules. Paragraphs (a) to (c) of subrule 71(2) outline the circumstances in which an infrastructure operator may levy a termination fee if a person who holds a right of access terminates or surrenders the whole or any part of that right by notice in writing given to the operator. Rule 72 provides details of the method for calculating the maximum general termination fee

 

Item 1 - Item 85 of Schedule 1 (subrule 72(1))

Item 1 inserts subrule 74(6) after subrules 71(6) and (7).

Subrules 71(6) and (7) provide that the general termination fee must not exceed the amount set out in the termination information statement or by the amount set by rule 72. Inserting a reference to subrule 74(6) makes it clear that rule 72 also sets out how the maximum general termination fee is calculated for the purposes of subrule 74(6).

Item 2 - Item 85 of Schedule 1 (at the end of note 3 to subrule 74(5))

Item 2 inserts the reference to subrule (6) of rule 74 at the end of note 3 to subrule 74(5). As note 3 makes reference to the maximum amounts that may be levied as general termination fees or additional termination fees, this note should also refer to subrule 74(6).

Item 3 - Item 85 of Schedule 1 (at the end of rule 74)

Item 3 inserts subrule 74(6), specifying that the general termination fee set out in a termination information statement must not exceed the maximum amount set out by rule 72.

This item provides a quantitative cap on termination fees in the circumstances set out in subrules 71(2)(a) and (c) in item 85 of Schedule 1 to the 2019 Amendment Water Charge Rules.

 

 

 

 


 

 

 

Attachment B

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Water Charge Amendment (Termination Fees) Rules 2020

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

Section 92 of the Water Act provides that rules may be made by the Minister applying to Basin States that are referring States and in the Australian Capital Territory that relate to regulating and dealing with water charges, and contributing to achieving the Basin water charging rules and objectives set out in Schedule 2. The Amendment Rules insert subrule 74(6) in the Water Charge Amendment Rules 2019 outlining that the general termination fee set out in a termination information statement must not exceed the maximum amount set out by rule 72 of the Water Charge Amendment Rules 2019.  The Water Charge Amendment Rules 2019 will in turn include these amendments in the Water Charge Rules 2010.

 

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

 

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

 

The Hon Keith Pitt MP

Minister for Resources, Water and Northern Australia

 

 

 

 

 

 

 

 

Overview

The Water Charge Amendment (Termination Fees) Rules 2020 were enacted to make a minor technical amendment to the Water Charge Amendment Rules 2019, which were themselves amendments to the Water Charge Rules 2010. These rules were introduced under the authority of subsection 92(1) of the Water Act 2007 by the Minister for Resources, Water and Northern Australia. The primary purpose of these Amendment Rules is to clarify the limit on termination fees under certain circumstances, thereby imposing a quantitative cap on these fees. This change was in response to advice from the Australian Competition and Consumer Commission and aims to improve pricing transparency, simplify the calculation of termination fees, and streamline the regulatory framework for water infrastructure charges. The rules are not anticipated to have any adverse implications for stakeholders, and are designed to provide greater certainty for both water users and infrastructure operators within the Murray-Darling Basin.

Scope and Application

The Water Charge Amendment (Termination Fees) Rules 2020 is a legislative instrument made under subsection 92(1) of the Water Act 2007, aimed at clarifying and setting a limit on termination fees for water access entitlements in the Murray-Darling Basin. The Amendment Rules apply to the Basin States and the Australian Capital Territory, impacting water infrastructure operators and water users within these regions. The purpose of these rules is to provide greater certainty for water users and infrastructure operators by imposing a quantitative cap on termination fees when a customer gives less than six months' notice of exit. These rules amend the Water Charge Amendment Rules 2019 and will subsequently be included in the Water Charge Rules 2010, effective from 1 July 2020. The Amendment Rules do not impose any new regulatory costs and are designed to improve pricing transparency, simplify the calculation of termination fees, and streamline the regulatory framework. Additionally, the rules are compatible with human rights and freedoms as recognised or declared in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The Water Charge Amendment (Termination Fees) Rules 2020 (Amendment Rules) serve to make a minor technical amendment to clarify the limit on termination fees under certain circumstances, primarily where a customer provides less than 6 months’ notice of exit to the relevant infrastructure operators. This is achieved by inserting subrule 74(6) into the Water Charge Amendment Rules 2019, which then incorporates it into the Water Charge Rules 2010 from 1 July 2020. This amendment imposes a quantitative cap on termination fees under subrules 71(2)(a) and (c). Section 92 of the Water Act 2007 provides the legislative authority for these Amendment Rules, which are designed to achieve the Basin water charging objectives and principles by regulating and dealing with water charges in Basin States. The obligations imposed by these Amendment Rules primarily concern the regulation of water charges, particularly termination fees, in Basin States. Infrastructure operators within these states must now ensure that any termination fees charged to customers comply with the new quantitative cap specified in subrule 74(6). This includes providing clear and accurate information about termination fees in any termination information statement. Additionally, operators must adhere to the calculation method outlined in rule 72 for determining the maximum general termination fee. These obligations are intended to provide greater certainty for both water users and infrastructure operators. There are no specific offences, penalties, or consequences for breach outlined in the Amendment Rules themselves. However, any breaches of the Water Charge Rules 2010, including the new provisions inserted by these Amendment Rules, could potentially result in enforcement actions under the Water Act 2007. This may include administrative penalties, compliance orders, or other measures to ensure adherence to the regulatory framework. The precise penalties would depend on the nature and severity of the breach, as well as any relevant provisions in the Water Act or other applicable legislation. The Amendment Rules are designed to be compatible with human rights and freedoms as recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The accompanying statement of compatibility confirms that these Amendment Rules do not engage any of the applicable rights or freedoms, and therefore do not raise any human rights issues. This ensures that the changes made by these Amendment Rules are consistent with Australia’s obligations under international human rights instruments.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.