I'd first like to welcome everyone to webinar number three in the Purser Water Literacy series. My name's Rod Carr. I'm a director with Mars and Jacob Associates. And I'm pleased to be your host for the webinar today. As you can see from the title page here, today's webinar is on the coming Water Year 2020-21 irrigation season. And looking at opportunities for you to diversify water holdings is a key theme for this webinar. We'll also be across the webinar hearing from a range of other presenters. I'd like to start by doing an acknowledgement of country. As host to this webinar, I firstly need to acknowledge the traditional owners. As this meeting includes representatives from other parts of the country, it is important all of us to reflect, acknowledge and pay respects to traditional owners and their nations of the entire River Murray system. I acknowledge and acknowledge that the traditional owners and their nations of the River Murray have a deep and ongoing cultural, social, environmental, spiritual and economic connection to their lands and waters. And on behalf of all of us joining in the webinar today, I pay my respects to the elders past, present and emerging and acknowledge all Aboriginal and Torres Strait Islanders joining us here today. I'd like to now do some brief introductions to the presenters that you're going to be hearing from across the next two hours. And then we'll start stepping into some of the detail. So from Marsden Jacob, you can see here we've got three people who you're going to be hearing from. First of all, myself, Rob Carr, Simo Turbinan, who is the principal with Marsden Jacob and Stuart McGlocklin, who's a senior consultant with Marsden Jacob. We're also really pleased to be having Francis Sons from the Department of Water, Environment and Water. So I get tripped up on the name changes from the Department for Environment and Water joining us. Francis is team leader with the Water Licensing Branch. And we've also got Megan Taylor, who is the Water and Administration Manager with Renmark Irrigation Trust will be joining us today as well. I'd also like to just express our thanks to the team at PERSA, who provided a lot of assistance in the preparation of the content and a lot of guidance and advice in putting this together. In particular, to Rachel Kelly, Program Manager of the River Murray Sustainability and to Tarsham McGregor, Support Recovery for Civil Defence. This webinar is being recorded and so to have the previous two webinars. When the webinar is up online, you as a participant will receive an email saying it's now available. So if you want to rewatch it, if there's anything you want to have a think about as part of it and have another look at it, please feel free. If you've got someone who you know was unable to attend today, but you think might be interested, please let them know. And if you're interested in having a look at the previous two webinars, then jump onto the PERSA website and you'll be able to see that there. There will be opportunities and we really hope that you do make the most of this to ask questions. You'll be able to see a Q&A tab on your control panel in Zoom. And we basically ask you to jump in there and ask questions. If you've got a question for a particular person or presenter, it's always helpful to us if you mention their name. If it's of more of a broader policy nature, we may take that on notice and take that to the team at due and be looking to get back to you on that after the webinar is completed. But we'll endeavour to answer as many of your questions as we possibly can over the course of the webinar. So that's basically the intro. And now we're going to step into... I just want to give a quick overview as to what we're going to cover in this program. So here's the outline. We've basically broken the presentation into two parts. In part one, which will take about the first hour to complete, we're going to give you an update on the 2021 Water Year and Looking Beyond and really what's changed since the last webinar in May. We're then going to look at preparing and planning for the rest of the Water Year and we'll look at some options beyond 2021. With a bit of a practical look and some case studies looking into interstate trading options and diversification options. At the end of that session, we've got a Q&A session. So as we're going, if you've got questions, send them to us. But also at the end there, we encourage you to ask questions and we'll basically work our way through the questions. And seek to answer as many as we can. In the second part of it, we're going to be talking about trading water. And how does it happen in practice? And really pleased to have Francis joining us for this session and Francis is going to talk us through some of the issues that can arise where trading is concerned and talk us through some of the practicalities of it. Also really pleased to have Megan Taylor who'll be joining all of this as part of panel discussion, but particularly Megan and I will do some leading commentary to the panel and then we'll open up to a Q&A session at the end where all of the panel, all of the presenters will be available basically to answer your questions at that point in time. So I'm going to now step into the first part of the webinar, which is the market update and outlook for 2020-21. And really with a focus on what's changed since May. And I guess there's a lot of good news. So what we've actually seen since May is quite an important recovery in the system. And we've seen above average inflows into the storages, which is really helping storage levels to recover. And we're in quite a good position now, particularly when we compare ourselves to the same time last year. I guess it's also worth noting that we saw a lot of water carried over. Estimates around 60% more than the previous year carried over. There's been some supplementary access to water in New South Wales. And we've seen some demand and some trading occurring. Prices have come down quite significantly. And that's the good news for mine as well, that this supply-demand relationship often leads to this reaction in the market. We've got an improved supply. We've also got an improved outlook. So the bomb forecast is indicating a wetter winter and spring period, which is basically introducing a degree of positive sentiment into the market. You'll also see there's been a little bit of an uptick in prices since they reached their lowest point over the last couple of weeks. And look, an explanatory of that is there's actually, from what we can observe, quite a few forwards that were traded and agreed last year at last year's prices. And they're contributing to some of this uptick in prices in the market. But overall, we're seeing prices significantly below where they were at the same time last year. The allocation outlook in May, this is what we were talking about based on the outlook in February. And we could see a fair degree of risk that under a dry condition, we're looking at a level that would be below 19-20 and well below the 10-year average. How's it looking now? Excuse me. The outlook has improved and really quite significantly. So this is the allocation outlook now. And we can see that we're now got dry sitting above the 19-20, 40-year outcome and under average inflow conditions. We're actually getting very close to the 10-year average. So it's a much more positive outlook than what we had at this time last year and even back in May when we did this last webinar. So that's a really pleasing development from our perspective because it means there's more water in the market and it's led to softening of prices which presents new opportunities for people to access water out of the market. So all set for the season ahead. And I'm going to now hand over the baton to Stuart McLaughlin, who's coming online now, to talk us through all set for the season ahead. Over to you, Stuart. Thanks, Rod. Hi, everyone. Thank you for joining us today for all the third workshop as part of Purse's water market literacy program. As we'll say, my name is Stuart McLaughlin. And yes, I even know my little profile picture looks a lot different now with my COVID haircut. For the first part, for the rest of part one, we have quite a bit to cover in 35 minutes. So I'm sure we get through it all. These slides, as Rod said, will be provided in a recording and will be provided at the end for you to review. I'm going to start with a few considerations for the start of the season, carry over in account management. And this will follow with a look at interstate leases and entitlement purchases and some things you should be thinking about when looking at these products. And a brief example, we've got some case studies and a brief example of the cost of these two products. So carry over. It's a bit of a tricky thing to get your head around. So did you carry over any water for your South Australian entitlement? So as Rod said, the SA class three allocations now 77% and the allocation outlooks indicating that it's probably going to reach 100% allocation by around October. And what this means is that the water you've carried over will not be available for use in the 2020-2021 water season. The volume above 100% will effectively go into your rollover account. And we've got a little graphic here showing that. So the maximum carry over is 20% of your entitlement. So we've got 77. And now the 20% it will go over once it gets to 100%. It will go in 20% will go into a rollover account. And if allocation is again triggered in the following year, so next year in 2021 with the April announcement, this announcement is less than 50%, then the rollover volume can be credited to your water account in the following water year if the allocation is less than 80%. So as we can see here in the graph, we've got the start of season two, we've got a 50% allocation announcement in April, then in water year two, if the allocation is less than 80% and this is sometimes usually around September, this cause may have been there's a good indication that the allocation for that water year is not going to get to 100%. And the rollover water, it's important to note, it's not actually available for use and it's not tradable until it's converted back into a carrier of allocation onto your water account. Next rodent. Okay, so carrier of in parking, couple of other considerations. So you parked water into state, few things to think about for going to this season. Have you already returned the water to your South Australian account? What were the contract details? If you parked it, the data return, when will it happen? Some considerations for interstate parking is particularly for Victorian entitlements that would be the risk of spill. Is there a risk that you may not get your water returned? The current Victorian Murray system, the risk of spill is 60%. And the other thing to think about is trade restrictions. We can see a little snapshot here of the water flow platform in the market overview section, particularly for South Australian irrigators. The Barma Chokes closed, Golbin to Murray IVT limits closed, as well as the Murrumbidge IVT trade out is also closed. So those three things need to be considered as well as the spill risk when you're returning your interstate parked water for this year. Next, water account management. So to keep your things for South Australian irrigators is not to exceed your site use limit or overuse as penalties will apply. So your site use, the combined volume of announced allocation, carryover, parked water, forward water, bought temporary water, this may exceed your site use limit. But it's important to note that it's not an issue as long as you don't use more than your site use limits. There's no penalty if the water is just sitting on your account ready to use. It's only if you use it and overuse. So River Murray, South Australian River Murray water users must also ensure that they have not used more water than is available on their account by the end of each quarter. Penalty for excess water use will apply if you'd use more water than the volume of water available on your account at the close of the first quarter, which is 30th of September, 2020. And if we look here, we can see some of the rates. Penalty rates for exceeding site use limit can be up to $740 per megalitre and kilolitres there. And these are the penalty rates from Q4 in the last quarter year. And my understanding is that the rates for Q1 this year should be gazetted around mid-August. Next. So water budgeting, we're at the beginning of the season and it's good to think about a few things about what your water use is going to be over this year and how can you best manage your water portfolio to ensure you get the best out of it. So four key questions we're really thinking of here is how much water will I need to use this quarter? And it's important to think about under different climatic conditions. Rob spoke about at the beginning of May in our first webinar, we had quite different outlooks, allocation outlooks as we do compared to now. So it's different too. It's important to think about dry, average and wet conditions and what under those scenarios you might use. How much allocation water will I have available? Is that sort of what your supply going to be for the year? Is there any anticipated surplus or deficit? Am I at risk of needing more water than I have? And it's important to have this understanding because you can then develop a trading strategy. So you can go into the market now or plan ahead of purchasing forward water or something like that. So you're not stuck in the peak water and season purchasing water prices are potentially high. And then how much water can I use? Budgeting actual, sorry, budgeted versus actual water is it greater than my site use? Do I need to consider going to the market to purchase more site use? So then I can actually get through this season and use the water that I have. Just a quick note, as part of the water literacy program Perse and Mars and Jacob have developed a set of fact sheets. There will be four fact sheets released after this webinar as well as a water balance checklist. And that's just going to go through these questions in a little bit more detail and a few other questions to help you, help stimulate your thinking around what should I budget and what should I consider in each of the four quarters of the water year next. So the next part is going to look at two products. So we're going to look at entitlement leases and we're going to look at interstate entitlement leases and entitlement purchase. And we're going to have a couple of case studies. So Rob next. So we're just going to briefly retouch on market connectivity. We've spoken about this in the last couple of webinars but it's important just to cover to provide some context. So in the Southern Connected allocation can be traded across catchments and state boundaries subject to trading rules and limits. And this essentially increases the market size and gives South Australian irrigators access to interstate entitlements and allocations that have a range of different characteristics in terms of their carryover, et cetera. For a little bit of comparison here we can see the South Australian class three entitlements on issue 608 gigalitres, getting to Victoria, you've got 900 New South Wales 11 high security, you've got 164 in general security, you've got 1800 gigalitres available. And that little graph there is just showing the back end of our water flow platform and how the trade limits are adjusted for when looking at different buy and sell listings. Next. Okay. So as we discussed under the current trading rules September water could always be traded to South Australia from Victorian zone six B and seven and New South Wales zones 11 without limits. This means that buying or leasing entitlements from these zones comes without delivery risk. That is not being able to get the water returned back to you. And so it's important to know that other zones there may be restricted restrictions. And we touched on a few of these at the beginning. The key ones are the farmer choke. So from above to below, the Victorian, sorry, the Goldman IVT and the Marin Bigi IVT. Next. And just as a little bit of demonstration here, we've got just a screenshot of our water flow platform. And here we are looking at, I've got SA Murray as my zone of selector and I've just gone in and looked at what the sell listings are. So I'm going to look at some buying some water. I'm going to see what the sell listings are. And here we can see from SA Murray, I've got these three zones available to me and it takes into account where you are and it will display only results based on the current trade limits. Next. So connectivity really underpins water delivery to South Australia. So how do I actually get water to my property in South Australia if I own or lease an interstate water? So for this water, if you've purchased permanent water, you can throw an allocation trade or you can get it through establishing interstate tag. So the benefit to tagging versus allocation trade is that you only have to pay a one-off tagging fee. After that, you do not have to pay a transfer fees as you would with allocation trades. However, you need to order the water each time you want to use the tagged entitlement but there's no fees with ordering water. So it's a useful function to look into. If you've leased water, really the only way is through an allocation trade. And obviously you can lease water, you can lease not interstate, but you can lease an SA entitlement well. In that case, water will be credited to your account automatically. In terms of applications, we're going to touch on that next and look at what sort of applications are involved in this trading process. Allocation trades need to be lodged in terms of interstate. Allocation trades need to be lodged both with due and the interstate water authority and potentially with the IAOs or if that's involved in the trade. Thanks. Okay, so we're just going to go through a couple of trading samples here. The important to note that these are not necessarily all the applications you personally have to submit if you're part of a trust. And the trust will assist you with these trades, but we're just going to cover up a brief overview of what some of these trades look like. So here we've got a trade between South Australian River Married Private Diverter and Interstate Private Diverter. And it essentially has five steps. The buying sellers matched either via an intermediary, a broker, or through a direct agreement with your parties. And then step two and three, the trade application is lodged with due and the interstate authority. And then four and five, once approved, if approved, the trade is recorded to the South Australian and Interstate Water Registry. Next. So example two, a trade between a trust, irrigator CIT or RIT, and an Interstate Private Diverter. And it involves a few more steps. First, we've got, again, buying seller is matched via an intermediary or through the trust. Two, a trade application is lodged with the trust. Three and four, trade application is lodged with due and the interstate authority. And then four, five and six, if approved, trade is recorded to the IO, to the trust accounting system register in both water registers. So that's three applications. Next. And the last one. So this is a trade between a trust, the South Australian trust, CRT, RIT, and an Interstate IO member. So it might be Murray irrigation, for example. And this involves the most steps. Again, buying seller is matched. We then have a trade application. It's lodged with the trust and the Interstate IO. Then the trade application is lodged with due and interstate authority. And then the final four, if approved, these are recorded with the trust, the IO and both the state registers. So there's four applications in this. Next. So just a brief overview. Water delivery to South Australia via allocation trades. It contains multiple steps and can require multiple applications and approvals. There is help out there. Water brokers or intermediaries, they can certainly assist you with the trade applications and they can provide a full service handling or the paperwork. You can also do it, alternatively, you can do it yourself. And this help will touch on these processes later with a due guest speaker. Now you can answer any of your questions and help you through that process. Trust members can get assistance from their trusts and private diverters, as I say, can seek guidance from the department. So next. So an entitlement lease. So as we said at the beginning, we're gonna touch on lease, entitlement lease and permanent purchases. So an entitlement lease, maybe a beneficial option for you to consider going forward in terms of diversifying your water portfolio. So an entitlement holder, seller release, or they transfer complete access to the entitlement to the buyer or leaseee for a specified period of time. And this is generally three to five years. At the end of that period, the access to the entitlement returns back to the leaseee, the lease or all the seller. Tip of contract features, you've got entitlement, entitlement location, length of the lease and your price increase, CPI, maybe their responsibility for ongoing entitlement fees, which we're gonna touch on in a little bit. And how and when the allocation is transferred, might be through a separate allocation or might be a term transfer and the benefits. For buyers, leasing water provides water and financial security by guaranteeing access to a water entitlement for a known period compared to buying water entitlements outright. Leases are a less capital intensive alternative for water use of users and it can mitigate some of that risk. For sellers entitlement leases, it provides a secure income for the lease term while retaining the potential for the longer term asset appreciation and capital gains. Next. So we've just got a little bit of data here, the popularity of entitlement leases. So this is just South Australian Victorian turn transfers and we can certainly see an increase from 2013, 14 up until the 2019, 20 more to year. It's important that this graph only includes term transfers in Victoria, anecdotally more leases than our written via allocation trades but this just shows you that they're becoming more and more popular. Got the percentage of the market on the right hand axis there and we're certainly increasing. Next. So as we've touched on previously, access to interstate water for from South Australian irrigated perspective has significant benefits. Purchasing an entitlement in Victoria or New South Wales can give a greater water security and improve carryover capacity. So you can see just in that little table there, we've got all the different zones and their high reliability and low reliability and their carryover capacity. So carryover capacity for Vic and high and low and New South Wales general, sorry, New South Wales general security entitlements and that's greater than it is in South Australia, particularly New South Wales high security entitlements. They received 95 to 97% allocation on one July in all but extremely dry years such as the Millennium drought. So there is a greater water security increased capacity in looking at interstate products. Next. So I've just got a little snapshot here of the Waterflow platform. Permanent purchases is still a good option as opposed to leasing just an outright permanent purchase of an entitlement. However, it does require significant capital. As you can see here, we're in the report and outlook section. We're looking at permanent water. We've selected zone 12 River Murray. We've got the date range there going back to 2015. So as part of the free account, you can go back five years and look at volume weighted average price over that time. And we can certainly see there's been a sharp increase up until 2015, 17, 18, started to increase 2019 and we're now up to $6,000 or $7,000. Next. So what are the costs associated with leasing on any entitlement? So these are 2021 fees. They're both administrative and transactional and ongoing fixed fees associated. So ongoing fixed fees, these are payable for each mega-liter of entitlement year on. There may also be an annual account or service fee. For example, in Victoria, $119 per account in Victoria. And it's important that these fees are separate to using water in South Australia. There's no usage fees for South Australian River Murray entitlements or water traded into SA and used in SA. IOS are a bit different. Also need to think about delivery rights. Transfer and fees for as part of an allocation trade. So getting the water into state back into South Australia. $277 per trade for South Australia. Victoria, $47. New South Wales, $49. Plus, if you're going into state, there's an added on fee. And these varies between, and fee varies between different brokers and service providers. And you can see that on it. When looking at the water flow platform, we've got some of those indicative costs for you. And just there, the little table, we've got the fixed fees for each of the areas per when you own the entitlement. What fixed fees are per megaliter? Next. So what are the risks with leasing and owning an entitlement? So in order to manage a risk, it's essential to know what types of risks are associated with these products. So you can be best informed when going into state and looking at these products. So one, an allocation risk. Will the entitlement yield sufficient allocation for your requirements? And that's really important. Delivery risk, trade limits. If it's in a particular area above the choke, Murrin, Bidgie or Goldman, you need to be aware of those different IVTs. So when you call on your water, you can actually get it. For Victorian and less so in use of those, you've got a spill risk. So this can be partly mitigated by smart use of carryover capacity. Ensure that it's carried over in those zones where you don't have any trade limits and a price risk. Always present in some shape or form, but depends on the frame of mind. For example, buying perm and water at $7,000 per megaliter and then temp stays at $50 to five years in a row, it's something that needs to be weighed up. Next. So looking at these different products and their risks, it's the allocation risk. They both have, they're both in permanent entitlement trade and entitlement lease. They've both got allocation risk. Delivery risk, they've both got that acquiring entitlements. They may be subject to many trade limits. Can be spill risk in Victoria. Price risk, more so in the entitlement lease. If leases can lock in the price, but the price risk associated with paying more than the eventual spot market price. So we're going to touch on an example later. You've rented an, you've leased an entitlement and the allocation for that, maybe only 50% and the sort of the levelized cost of that entitlement and that allocation may be more than what the current temporary market, but we'll go through that example. Risk bearer, one's on for permanent entitlement trade. That's on the buyer. Entitlement lease uses a bit of hybrid and counterparty risk. The counterparty risk could eventually to the buyer in a situation where sort of the bank refuses to discharge any commitments or a mortgage. So there's some things to think about when you've got any permanent entitlement trade. Next. So a couple of case studies, we've just got two here. We also had a couple of case studies in the last webinar. So make sure you check out those as well. Next. Okay, study one. We've got a grower looking to diversify their water portfolio. And again, we're going to stay on entitlement leases and permanent, the theme is going to get permanent entitlement and leases. And so entitlement process is a little softening. Outright ownership still requires alternative, still requires capital. So is an entitlement lease a good alternative? And the key here is need to factor in trade limits, getting your allocation water delivered to your SA account, especially in consideration with your Goldman, public cheque, and Marabici entitlements. Allocation yield, how much allocation are the entitlements likely to yield, year on year. In leases can be three to five years. So you can have that entitlement for quite some time. New South Wales high security entitlements, for example, have historically provided good allocation in all but the extreme, water extreme dry years. Carryover capacity, New South Wales high security. Well, the one can't carry over, but the others have varying carryover capacity that are better than the South Australian entitlement. Fees and charges, as we've touched on, there was a range of fees and charges for not only holding up trading and allocation from a lease or a permanent purchase to your South Australian account. Next. So entitlement leases, they give access to entitlement characteristics without the capital costs. And some considerations apply, as with the entitlement purchase, and we've just touched on a range of those, the deliverability, how much entitlement you're going to receive. And leases are generally three or more years. So considerations of what the alternative is, is the average water price. So considering what the average water price is going to be over that time. And we'll look at some of those figures in the next slide. So here we go. We've got some calculation examples and these are just indicative. So lease prices late last year were around $350 a megaliter for zone seven, higher reliability in Victoria, and about $500 per megaliter for zone 11 high security in New South Wales. And this is for a three to five year lease term. Example one. So you've leased a hundred megalitres of zone seven. Assume this year's allocation is 48% dry scenario. You will receive 48 megalitres available. You've paid for the full hundred megalitres, i.e. 350 times your hundred megalitres, that's 35,000. The effective dollars per megalitre you've paid is a 35,000 divided by 48. That's the megalitres you have available based on the allocation. And that comes to $729 a megalitre for that allocation water. So that when you consider that against the current spot price, it's quite a bit higher. Example two. You've leased a hundred megalitres again of zone 11 high security. Assume this year's water allocation is 97%. You'll have 97 megalitres available. You've paid for the full hundred, i.e. $500 a megalitre times 150,000. The effective dollars per megalitre you've paid is 50,000 divided by the 97 megalitres, and that's $515 a megalitre. Still quite a bit higher than the current spot price now, but if you consider the spot price during the peak around December, January last year, up to $800 in some cases. For reference, we've got here the Murray-Darling blow, the choke, the VWAP, so the volume weighted average price since 2010 has been $181 a megalitre. But the VWAP has the last four years, 307.  And we've got a little table there, 2016-17. The VWAP, quite a wet year, $71 up until 2019-20. $654 with the volume weighted average in the last quarter year. Next. So case study two. We're gonna look at permanent purchase here. Historical calculation example. So an SA irrigator buying 100 megalitres of zone seven again in 2015-16 versus buying 100 megalitres from the allocation water market. What's gonna be the difference? Some of the assumptions we've used here, allocation water can be bought from the spot market at annual VWAP prices, so we haven't taken into the fluctuation over the year. Both irrigators use 100 megalitres of water per enemy in South Australia. And it excludes broker fees and commissions. So we've got here purchase price, $3,000 per megalitre, 100 megalitres, $300,000. Set up an interstate tag, for example, one off fee, 277. It's a Victorian entitlement. So as we've touched on before, Victorian has a fixed cost estimated over the four years, about $540. So 2019-20 temp price. We're looking at about $22,000. So in total, over the buying the permanent, you're looking at about $323,000 in the total cost. And if you consider holding that entitlement from 2015-16 up until now, prices are around $6,500. So we can consider a net capital gain there on that entitlement of around $350,000. And we can see here, here we go to B down the bottom there. If you consider just, instead of buying the permanent entitlement, you're just buying allocation water. Over that time total cost about $131,000. Next, so a bit of conclusion here. We've touched on those two case studies. We've looked at entitlement leases, we've looked at permanent purchase. And divine interstate diversifying water holding with interstate water can provide significant benefits to SA educators. It provides opportunities to access in times with a range of different characteristics from improved carryover capacity and allocation or allocation yield. However, these things need to be considered. Cost of the products, purchase cost and ongoing fees. Which one's right for you? Which one fits your water portfolio? Deliverability, can you securely get that water to your SA account? Or are there trade limits that are impeding on this? Entitlement characteristics, such as the allocation yield, the carryover capacity or if it's a Victorian risk of spill, need to do your own research. And there's a lot of good information out there. And the fact sheets will help you with that research. And the analysis in relation to what's the best fit for you and your requirements. And also the broader availability outlook. Is there a shift towards a wetter pattern? We saw 2016, quite a wet year. Tending towards the 2019, quite a dry. You know, it's three years, we've seen quite a big change in the price from the $71 BWAT to $600. So those things need to be considered and it's good information out there. And so as I've touched on, it is pivotal to access reliable and independent information to support your decision making. So, and as part of these workshops, we've got the fact sheets and the water balance checklist, which will go through some of these questions to help you think about some of these considerations. Next. So I'm going to pass back to Rod. We're going to move on to part two. So before we do, there's been a couple of questions that have come through thus far. I'm just sort of jumping into the chat and making sure we pick those up at this point in time. I think Simo is also here for some questions. So Simo, you should also be online and feel free to unmute at this stage as well. Maybe we'll direct this first one to you, Simo, as well. So there's a question that's come in saying if carry over water was not available in the second year, what happens to it after that? Yeah, so basically, if in year two, the SA carryover is not available, i.e. the early April announcement for minimum allocations is greater than 50%. Yes, it will mean that the roll over water will not be available that year. So basically, you won't get access to the water you carried over from year one to year two. And yeah, there was a follow-up question. Where does this water go? Is it socialized to South Australian accounts? In a way, yes. So that water, it's not lost entirely. Albeit you will lose direct access to it, yes. But my understanding is that that water, the roll over water, it will contribute to future carryover ability as these roll over volumes will still be underpinned by the deferred water South Australia is holding in the shared Murray storages. Obviously there are separate account management rules for that deferred water SA can hold for private carryover. But my understanding is that water still continues to contribute to future carryover ability. Great, thanks Simo. Now we'll do a couple more questions, but we've got five minutes and then we're going to turn to Francis, who is our next presenter. So I've got another question here around the cost or value of water sold and what are the best options? Someone's asking about water quality. I guess water quality is something that individuals need to consider. And we're really focusing on river water as part of this, as part of recycled water. So I might take that one on notice. Rather than trying to move into water quality because we've got very much focus on the river at this stage. There was a question earlier around buying space in zone seven to park water or lease and thinking about that as a strategy. Stuart, I wondered if you wanted to jump in on this one. Yes, there we go, sorry. Buying space in zone seven to park water leasing. So as we've just touched on there, two very different strategies. Leasing present really three to five year strategy as opposed to buying space in zone seven just to park and retrieve the water the next year. So a couple of things you need to park water you might consider. Risk bill if it's Victoria and trade limits leasing, you need to consider the cotton mega leader based on allocation return. And we touched on a couple of those in the last slide. There's another one here which is saying can you determine if you're paying too much for water? Sima, I wonder if you jump in on that one. Yeah, sure, right. I suppose there are multiple angles to that. Like it all depends on the individual's capacity to pay what is considered too much. And obviously that comes down to if you're an irrigator, the crop you're growing and then the margins you have for your operations. So obviously if the average cost of water per mega leader exceeds your net margins on an ongoing basis obviously then the conclusion would be that you're paying too much for your water. But I suppose in the water market it's based on supply and demand and closely monitoring and tracking the market movements you can stay on top of things and at least assess what is the fair market price at the moment so that you will know not to pay a top dollar more than the the price. I think the other thing on that Sima and for everyone to think about as well is that if something looks really cheap in the market, there's in my observation usually a really good reason for that. And we've spoken about some of those reasons already such as IVT risks and the like. So if you see something in the market that is significantly different, do some further research to understand why that's the case. And there can be a range of reasons for that depending on what is the status of the market at this point in time. And I guess one of the things we showed before is that the rules engine in the back of water flow can give you some assistance with that because we've got those trading limits programmed in. And there's a subsequent question there around sort of why is it cheaper to park water in Goldman IVT? And for mine, that's really linked to the risk associated with getting that water out of Goldman and getting it delivered elsewhere in the Murray or either the Vick or New South Wales or even down into South Australia. And so that traditionally leads to a higher risk attributed to it. And there's also risk of spill in that area as well that needs to be factored into consideration. Maybe one more question and then I'll move to Francis. We do have a couple of Q&A sessions programmed in to the agenda. So we will come back and look to answer some more of these questions. But strategies to minimize financial impact of quarterly water balancing has also come up as part of the question set that I can see. So I wondered if maybe Simo, you could talk about strategies that could be used to minimize that financial impact. Yeah, thanks Rod. Like as we have touched on earlier in the presentation, budgeting and then preparing like a water budget, it's really important. So and we have developed some resources to assist you with that. So basically mapping all the debits and credits in terms of water that will be available for you and then your anticipated use at different points and in the season, it's really important for you to determine if you're likely to be over or under, for instance, at the end of each quarter during the water year. So that's pivotal to know where you're likely to be at. Obviously, things can change. You might get a good liquor frame which will reduce your water requirements, but also there might be a heat wave. So you might actually use more than you anticipated. But still, you know, preparing a budget and updating them, I think that's pivotal. But also looking into the market and even products that are available, you know, it can reduce your risk of paying peak prices significantly. So looking at where the market is going and also the alternatives as we flagged here, you know, if not, you know, permanent purchase or in time at least, but also forwards and, you know, and also carry a parking to maximize your, the available water you might have within the water season. So looking into doing your research, looking into different products, what they can offer to you, what is the cost of a mega leader for products and yeah, it's just the hedging your bets really, you know, the team of this webinar is diversifying. So which in a broad sense means that just widen your horizons to look into different options and then you're in a better position to make an informed decision and manage that risk. Thanks, Sima. So I'm now gonna actually hand over to Francis. I'm just gonna have to end the share in a second and get Francis' presentation up and running. So it'll just take me a second and then I'll do an introduction. But Francis is gonna be talking about transfer applications, meter reads, application, lodgements with Jew and the like and the things that you need to consider. So just give me a second and I'll get your presentation up and running Francis. And now we should be up and running and I'd like to welcome Francis. So Francis is with Jew. She's a team leader within the Water Licensing Branch for the Department for Environment and Water. Her team members are based in both Barry and Murray Bridge. She's been team leader for about 12 years. Francis and her team implement the water allocation plans for the 10 areas including the River Murray Prescribed Watercourse. Francis is the chair of the Interoperability Group and Introduction Group made up of members from New South Wales, Victoria, South Australia and the Murray-Darling Basin Authority. This group covers the operational River Murray Interstate Allocation and Tag Trade. Francis has in the past been a local councillor for the Lockston-Wakery District Council District for a period of 10 years, been a South Australian Murray-Darling Basin NRM board member for a six year term and been involved in the developing and operation and maintenance of the Crocon Sunlands Groundwater Control Scheme including the development of the legislation around that as well. So look, you're bringing a wealth of experience to us, Francis. Really grateful that you're able to join us and I will hand over to you and I've got your presentation up and running. So just let me know when you want me to move to the next slide. Thank you Francis, your turn. Thanks, Rod. Thanks everyone for coming along. So I do have no prescribed water clause which is finished by the Water Life Companion Ferry and the trading occurs via application forms and the application forms which have occurred then have determined by the Ministry's delegate. That means at the moment that there are other Ministers delegates in the department so it can't happen in other areas. Next slide, please. Some of the issues we've come across on the application form are making sure that we've got your details and for your company's details correct at all times. So I did a condition on the water instrument that you do notify due event changes with your contact details within 21 days especially in mobile phone numbers and email addresses and this is extremely pertinent when you're doing trade because we are aiming to send your approved application and advice out back to you via email. So you'll get a much quicker turnaround time if you do have an email address and are able to use that. In the contact details we really like to include them on the application form and that way if you maybe have your farm manager filling out the application form then that's the person we can go back to to ask questions, just to clarify the volume or the correct licence number or account number. So to say a handy hint that might save a bit of time in the application processing. Next slide, please. So, Rod says, signing the application. Again, this is where some applications are held up. So if there are two or more parties or names on the water instrument the form needs to sign the application form. That is unless you have an authority that's already been provided to you or your water broker if you're using a water broker. But remember, two or more parties and names also would have to be signed on with your authority and that is then matched up with what's in the water license system, the application can proceed. The same with a water instrument in a name of company. Scanning the two signature trees with the two company directors with companies separate each board director.  Quite often customers get a bit annoyed if we do that and we actually get a help not annoy you. So if you get the right information in the first place we'll save everyone a bit of time and let's head over. Next slide please. So on the application form if you are the seller of the allocation whether it's a permanent entitlement or an allocation you will need a current meter read from you and that's entered into the water license system and to make sure you do have enough water to trade and again that quickens the process if you actually put it on the application in the first place it's got it ready to go and we won't have to come back to you. I've also just noted for your information that quarterly and annual meter fees to be taken in the first order and calendar days of the appropriate months that are listed there and supplied to the department and just to note that non-reply of a meter read may result in an actuation not a paying issue to do and the current fine of that $1,000 was less than that last year but we have new legislation so $1,000 plus the victims of crime dollars which is around $60 but quite a hefty impact if you don't supply a meter read and there are quite a lot of options to provide your meter read either online, phoning in or emailing and if you have any problems just give us a call and we'll help you through that but really important is your lodging and application that we do get that current meter read. Thanks for your next slide. Just touch on interstate application I do it touched on a little bit of this already which was excellent but just remember, South Australia works in kiloledas all the other states in Australia work in megaledas so when you're filling in South Australia's paperwork you need to remember to put it down in kiloledas or if you write megaledas you might have a phone call just to clarify but we do match it up with the interstate paperwork as well. The trade is only till one decimal so you can't have 18,999 kiloledas it needs to be 18,000 kiloledas or 1.8 megaledas if that's how you're thinking. If you use a juxtaposition of reference number the application will be refused we have a system that talks to the other states that is called interoperability and if the number has already been used the system cannot match so always make sure you have unused reference numbers don't use the juxtaposition. If the trade, unfortunately for you, is refused you will be advised of the reason and do what already touched on this the reason it could be that the barma choke IVT is closed so if the trade doesn't come through and you really must remember to lodge your paperwork in both states sometimes customers lodge in South Australia and they forget to lodge in either New South Wales or Victoria and then they're ringing up each state and saying where's my trade, I haven't done it yet so just a handy hint to do that if you use a waterproofer they will do that for you but if you're doing it yourself you should remember there's too much of paperwork and the next slide, thank you. Trade and quarterly accounting so quarterly accounting we've introduced in the beginning of last year and to ensure that your trade is considered in each quarter you really need to make sure you lodge your application before five o'clock on the last day of the relevant quarter so if you want the trade to be relevant for quarter one you need to submit it by 5pm on the 30th of September and then it will be included into the calculation of balancing that order account we might not have it completed in the system but as long as we have got it in the very office and the status that it's been received relevant time the calculation will be including that volume of water that you wanted to trade. Next slide, thank you. Just a hint for you some account holders and they open their water brokers to ensure that their quarters accounts are balanced. They do this, they pay for the water but they omit to tell the broker that this must be done for the particular quarter so their account is in a balanced situation. So if it's not lodged by the broker then again you'll end up being in penalty so just let your broker know if it's needed for the balancing of that particular water account period and then I'm sure they'll work with you and get it lodged in the timeframe. The quarterly accounting being a new introduction just takes a while for some people to get used to so we'll again work with you where we can to help you through those some minor issues that come up. Next slide, thank you. The past period for the year I've touched on the quarterly accounting already there will be a message displayed on the environment and water connect website so this is just a heads up for the end of the year. So guaranteed processing and determining of your application will occur if the trade is lodged by the 18th of June 2021. If you lodge it after that time we will endeavor to do our best to ensure your application is determined but we're not going to guarantee that it will be determined so just try to be a bit smarter with your planning to make sure you get all these information through. And it is a slight issue with interstate lodging. Again try and get it in by the 18th of June but if it's still lodging application then you happen to lodge it on the last working day of the month 30th of June last working day of the year. We can't get it into the system to get it matched with the interstate area if the application is not actually processed in the system by 11 o'clock on the 30th of June but if it's out of our control the trade areas close their water registers down and if that happens then your application is going to be refused and you'll need to have hopefully a second option up your flow. Thank you. Next slide. The main current requirement for applications at the moment is making sure you have the value of the trade recorded on the application phase. This is mandatory but if the value is zero then at the moment you're required to put a reason down but it could be the reason is it's a related party for its own business and that's a perfectly reasonable reason but we do have a future requirement and that's to make sure that the reason of all trades is recorded on application forms. Again it could be a related party trade could be standard commercial could be allocation trade as part of a shared transfer there will be a list that's been developed across all of the states so that this is standard list because there's a lot of people that deal with all in-state states so just be aware that that is coming your way as we've been dealing with that in the form of the time and the other current future requirement or opportunity for you that you're heading your way that changes the development and you water a life-saving system and there'll be an opportunity when that's developed for you to have a lot more control over your account it'll probably be up and running for the next quarter year but it's something that you can look forward to because you'll be able to have a user password and go in and actually view your account without having to ring us up and have a look at that so that's quite exciting news for you all and next slide, thanks. Next slide is really for your information we have to report with a Murray trade on the website this is the Water Connect website so we did a little table just to show what kind of remote trades we get in and whether we're meeting the time frame that are there for interstate trade at the moment is 20 business days and we have only one life-saving system in place that processing time frame will reduce we do actually currently get most interstate trades completed within five business days so if they went up considerably in 1920 I think that was a fit to do quarterly accounting but it didn't end off as yet it certainly was impacted by the carrier of the parking into the last of Victoria Interstate trade also went up in 1920 and again that may be because of quarterly accounting people trying to buy only the water they needed in each quarter to be in balance and entitlement trade then the permanent trade has been selling steady throughout the four years that you've got there entitlement trade tends to go up a bit if there's a government opportunity like the previous copy program where you could apply to get some funding from the government if you gave up some of your entitlement next slide, thank you the application form for the river Murray and all the other areas across the state can be found at these two sites you have an opportunity to lodge the application in a paper form or online, online you can click on and use and at the moment you can also scan and send your application paper form through an email and that's helping a lot of people out the water life of the team is there to help you so please don't hesitate to contact them if you're doing your own applications and you just want them to be checked before you send them in you're welcome to send them in to the email address that's on the screen and someone can check that to you and tell you if you need to have any more information and last slide, thank you this is the most important one, two birthdays thank you for your time and I have to send the application of you, thank you so Francis maybe stay online that was really really helpful and really interesting and I think there's some really important messages for everyone in that particularly around ensuring you're doing things in a timely way and lodging things in a timely way so that you can get the outcome you're seeking and I think a number of the dates that you've put in there are really helpful reminders to everyone around dates and times when things need to be done by so thank you for putting that together there is one question for you someone has asked or said hi Francis wouldn't it be a good idea for South Australia to conform with the other states and use megalitres instead of kilolitres I don't know if there's anything you can say or comment on on that side of things because most people seem to be able to navigate it but it can be a source of some confusion yeah it seems like it's at the moment so that's why we use that my staff are very adept at helping through people through that and these people make a mistake they just need to give us a callable system but yes it is looked at and I'm sure it will probably be part of the next review of the land state at which we'll involve water but I'm not sure that's the year or two away I think of course that might happen into the future now I can't see any more questions on there so obviously you've been very clear in your presentation so very well done thank you so much please stay with us we're now going to switch across to do to start the the panel session of this where Megan will first be talking and then myself just bear with me a second and I'll get back to the other presentation continuing in the theme of really practical considerations we're now going to hear from Megan Taylor who's Water and Administration Manager with Renwick Irrigation Trust Megan's responsible for the Trust's business management team has extensive experience in water license compliance and water trading together with all aspects of administration Megan joined the Trust in 2006 and was appointed Water and Administration Manager in July 2017 and Megan I understand you're going to particularly focus on some of the considerations from the temp market perspective when someone is operating within a trust or within the Renwick Irrigation Trust so I'd like to welcome you now Megan maybe if you could unmute and turn your video on and I'll hand over to you to start with hi thanks for that Rod yes so I will be focusing more on the temp side of the market in particular some of the biggest questions and concerns that we have from our customers so we have a diverse range of customers so we get a diverse range of questions however in particular the most common one of course is around the market about the price of water where the market's going if it's going to go up or down when's the best time to buy or sell so we get so many of those questions from our customer because so many of our customers rely just on the spot market which is one of the disadvantages in that so as Stuart discussed earlier about the entitlement leasing and you know forward leasing or parking you know there's some advantages with using those products that have an advantage because they you know not subject to the spot market where it's you know quite volatile so there are some advantages of using those those products in particular if you're within an IIO there are some advantages there because you don't have to enter into these products on your own we have a number of customers who actually band together and group and access these products as one entity because often you know we don't have a lot of large irrigators so maybe they only want 50 at 100 megs so there aren't always these products available you know in these smaller sizes so you know an advantage of being within an infrastructure operator is that you can group with some of your billet irrigators and access these these products that Stuart discussed discussed earlier so you know we have another number of customers that do that which will help you know with the volatility of the spot market if you you know inquire about these products speak to your brokers and your fellow irrigators to see if you know any of these options for you to use and of course you can work with your infrastructure operator to find out what the best option that we can help you work out or maybe even group you with some of the other customers and of course there is trading that you can do you know within your trust or your operator so you don't have to just rely just on the spot market and brokers you can do trading internally as well so in terms of the market this the last couple of years the carrier of a policy has has created a bit of concern so you know one of the biggest questions we get for the last two years about is about what to do with your remaining water so rather than just having evolving water left at the end of the year irrigators are now you know having to decide about whether they want to lease it out or save it for for carryover of course if they save it for carryover they do run the risk of potentially losing it depending on how how allocations go in the next year so I mean this year it's 77 percent so we're hoping that it's going to get to 100 100 percent anybody that's saved carryover from last year it's it's kind of like shrewding this cat you don't really know whether you have access to that carryover until April when the minister makes this next announcement and that you know is a source of great concern for our customers obviously they want the full economic right of their of their water so it affects you know when they go into the market there too so the trust is actually being advocating for a more workable carryover policy because our customers come in we hear their concerns so it's something that we've been working on and with value support there we're you know improving that for our for our irrigators so yeah that are a couple of the biggest biggest concerns that we have in terms of trading within the within the market and yeah this there's options so if you're looking at so leasing allocation you know speak to your infrastructure operator and find out you know what options are best best for you we're here to help your brokers here to there to help you as well so yeah thanks Rob thanks Megan look that that's really helpful and and really interesting about how I guess irrigators are coming together to bundle a transaction and and get a transaction done at their scale given many of them a smaller yes that's really you know that's great that people are working together like that to achieve that and the trust is able to help them in doing that and look I think it's interesting how people are and I think that's a key reason this literacy series is being done is around issues like carry over risk and what are your other options yeah we'll do around this because the South Australian allocations are very reliable and so they you know they bring you know the 20 percent is fantastic and few months ago we were uncertain I expect many of the irrigators were quite uncertain as to how much they were going to be getting this year and so the carryover was quite useful to ensure they at least had that in their account plus whatever allocation but a new question emerges is clearly emerging now around the allocation side of things I'm going to speak a little bit now and keep your video on but maybe I'll ask you to go on mute briefly Negan and then we'll bring everyone back together for to go through some of these questions that have come through as part of the session or you can turn your video off if you want to out of mind either way I just want to talk a little bit about the permanent side of things and some of the considerations so it was interesting when I was preparing for this session I had a few made a few inquiries and to just understand some of the key issues and opportunities being faced by participants in the water market and two key issues emerge they want to talk about briefly that are still occasionally tripping some up the first one is around what's the difference between wet and dry and people have been in the market for years they go I understand that that's all okay but for new people new participants in the market wet and dry as a terminology they might not have come across before so first of all dry relates to a permanent trade for water where the allocation doesn't transfer with the trade because it might have been used might have already been sold to another party whereas wet is basically the convention usually is that the trade includes the full announced allocation for the water year but it's always important to check if that's the case to confirm how much allocation is coming with the entitlement trade so why is this important well wet trades are generally and understandably more expensive than dry trades and the differential in the price is often reflected in what you can see in the temporary market in terms of their prices because they come with the value of that allocation attached obviously if there's make a transaction you purchase permanent water you get the next allocation announcements on it come what may but if you've already got the announced allocation that value is coming to you as well and if you as a buyer want all the water this season this can become this it can be really important to you because if it's a dry trade then you obviously got to be looking at what could be announced in terms of allocation going forward that water year but it may also mean that you need to step into the temporary market to access some more water the second issue that emerged was around delivery shares and delivery rights and megan you probably will have some insights into this as well I expect but first of all what is a delivery right or a share now I acknowledge that this is particularly an issue in the context of irrigation infrastructure operators such as CIT Central Irrigation Trust or Renmark Irrigation Trust but a delivery water delivery right or water delivery share both terms tend to be used represents an irrigator share in the capacity of a trust pumping and pipeline infrastructure and these delivery rights are a key component of the unbundling of water rights and designed really to provide flexibility for irrigators to manage them separately from their irrigation rights. Water delivery shares are issued by the irrigation infrastructure operator on a volume or mega-later basis they're allocated to an owner of an irrigation outlet associated with a defined parcel of land but they can be transferred but that transfer needs to be with the approval of the irrigation infrastructure operator and critically the transfer must be hydrologically possible so it's really important that if you're thinking about a transaction that the check is done on the delivery shares but why is this a key issue and why has this become a problem was interesting the sort of issues that emerged in the discussions that I had so one of the challenges here is if delivery rights actually can be an asset or a liability and it really varies on a case by case basis so it's really important that if you're a seller and you're selling an entitlement that has delivery rights that you take this into consideration and because there are termination cost risks if the buyer doesn't want the delivery shares and this can reflect a significant transactional cost and there were some examples that people pointed to where the seller hadn't realised that they actually had a cost with this and they hadn't really done the checks on this side of things so what's involved well should a holder no longer wish to retain some or all of their delivery rights they can be transferred to another person or they can be terminated by the trust but there are termination considerations there and both renmark and irrigation and central irrigation trust have a termination fee attached to the board delivery rights which is 10 times the annual service charge which I guess in the in the context of the trust can amount to hundreds of dollars well I'm aware it adds up to hundreds of dollars per mega liter of water delivery right so it's really important that when you're participating in these parts of the market that you've done your research on delivery shares and that equally applies to buyers and sellers what's coming with this transaction or what's moving off their account with this transaction you need to ensure that you're really clear on the contextual arrangements because you're going to need this information when you get to completing the transfer forms and obviously also you need to also keep an eye out for encumbrances as part of the process as Stuart spoke about previously in terms of risks but it has emerged and it was interesting that it did emerge in some of the questions that I was asking people across South Australia as a recurring issue where one or other party either the buyer or the seller has periodically got a bit of a surprise in this area around water delivery rights and whether the contract was clear or silent on these issues is is a really important consideration Megan if I can turn to you on delivery rights you spoke particularly about temporary market considerations but I wondered if you have any comments on the permanent side of things as well and whether you witness these sorts of issues in your role with Renmark Irrigation Trust and you're on I'll get you to unmute and turn your screen back on then that's okay Megan sorry Rod yeah uh yeah so within our trust we don't have a real lot of issues in terms of delivery rights in particular terminating the delivery rights it is it is quite quite quite low most of our members do do try and come in and see us before they they sell their water in entitlements so that they are aware of the of the rules and you know and this you know once they sell their entitlement they're still ongoing delivery right charges that's still that's still occur um yeah well that's really pleasing that's a good outcome for for your trust that's obviously some of what I was hearing must be in the context of others so but look it's just a reminder to all to really talk to the trust if you're looking to do this sort of transaction now we're looking to move to a bit of a broader Q&A discussion now and I I know there is a fair list of questions that have been captured as part of the process and I'm now suggesting that we bring back some of the other speakers so Francis and Stuart if you also want to come back in I think we can start working through some of these questions and Simo you've joined us as well fantastic great sorry so looking through some of the questions I might just throw some questions to different people across those that have come in thus far and maybe I'll start with one for you Megan if that's okay yeah let's come in and say what's the difference in trading within an IIO as compared to working with a broker so I presume the question is around how does it differ between them working with you guys or with a broker yeah I mean the obviously obvious difference is that when you go through your IIO trade through them then there isn't a broker so you deal direct direct with your operator in terms of when you go through a broker you still have to deal with your infrastructure operator so rather your broker will deal with your your operator so it's whatever terms and conditions your infrastructure operator have will still be applicable whether you go through an infrastructure operator your operator or whether you go through a broker the main difference will be that your dealings with going through a broker will be through the broker and then they will deal direct with the operator because obviously your operator is still involved because the border still needs to come off of your account your operator will be the main license holder so they will still need to do that so there will still be the involvement of the two parties there and if you just go through your infrastructure operator you deal direct with them whatever terms and conditions they have within terms of trading there are some advantages and disadvantages of going through your operator as opposed to a broker sometimes the cost can be reduced obviously you won't have brokerage costs with a broker but that depends on your on your operator they may have may have a have a charge for that but it's generally less than what you would pay through a broker a disadvantage though sometimes with your operator is that there is less of a market so if you're looking to do a quick trade it may not may not happen as fast as if you went through through a broker who has the whole whole market out there that they can interact with to train buy or sell you entitlement or allocation so there are a couple of the differences right yeah thank you Megan no that's excellent now just a reminder that if you want to ask a question as a participant we've got a few that we've got to work through here but if you'd really also like to just ask the question live if you raise your hand we can unmute you so you can ask the question of the panel directly if you prefer I've got another question here and I think I might direct this one at you Simo what's the range of commissions charged by brokers in relation to the volume of temporary water traded per transaction and I'll hand that one to you Simo yes so these commissions they vary in a couple of different ways in the water market for instance some intermediaries they charge both sides i.e. the buyer and the seller whereas some only charge commission on one side typically it's seller only in these cases there's also a difference in terms of whether they're the broker's charge a fixed dollar per mega liter fee for temp trades or if it's a percentage commission of the trade value and in the latter case typically the commissions we've witnessed in the market over the years they've been between 0.5 to 3 percent of the trade value typically when when market prices are higher the intermediaries tend to lower their commissions for instance last year when temporary water was trading at $1,000 per mega liter charging a 3 percent commission on that would be you know fair additional cost to that so they have a bit of a wiggle room there to adjust their their fees but yeah we encourage people to talk to multiple brokers to shop around and then perhaps get the best deal that suits your requirements but yeah there's a fair bit of variability in these commissions that the broker's charge so it's really important that you do your homework isn't it yes as part of the exercise and ask that question i'm going to take a question now if that's okay so someone has emailed his message in and said in relation to delivery rights can we comment on the fact that in some irrigation areas the rights have a value and vendors are paid for them rather than being a liability and certainly can and i think it's a really important point and a really important question to us because we are observing in a number of IIOs in certain circumstances where there is some form of you know there's a high level of water usage in that area and so there's a hydrological constraint in that part of the system that the delivery rights are accruing a value it's not universally the case everywhere but there are certainly circumstances where delivery rights are not a liability but actually are an asset in that circumstance so it certainly can work both ways that they can be a liability or an asset but it's really important that you're you're aware of whether it is or isn't an asset moving into the transaction so that you'll your eyes wide open to that i've got a question here on what's the likelihood of the april 15 allocation forward announcement being greater than 50% based on historical inflow data really that's a crystal ball exercise but i wanted to see mo are you able to comment at all on that one as well or is that one steward you want to comment on yeah i can comment on that yeah as you said right it's better for crystal ball territory but obviously there are some things we can learn from the history like in general the access to s a carryover has been very infrequent so it's only during the very dry years when it's flag data it may be available for use like as happened last april i think the last time before that was few years ago 2016-17 from memory but yeah like it depends on so many things like the future inflows for for this season also what's the what are the volume shared between the three states in the shared mdba storages the sas entitlement flow stuff like that so really hard to predict but yeah historically speaking access to s a carryover has only been made available during very dry years thanks simo maybe a question if you're used to it now so someone's picked up from this obviously that there is risks associated with carryover and the comment that's come through was so effectively that real water that has a real value is ultimately lost to the irrigator who may have invested to manage upcoming risk hence not much better to carry over an s over and a pocket on a low security water license it's unlikely to ever spill might be a better consideration seems to be the point being made so stewart yeah potentially i think it's about people understanding the options that have available to them and the associated risks i guess if you're parking in a low security vixx such as gullman then not just the spill but you're also going to need to worry about the trade restrictions and getting it back into your account so i think that as we've discussed the purpose of these is of the workshops is to ensure people are informed as possible to make the best trading decision and to look in the state to see what all your options are and to see and to see whether you know a low reliability and gullman might be the best you just might need to get the water out at a certain period of time and there is information out there so you can see when these trade restrictions are open and when they're shut so yeah well you've got the floor stewart and look yeah it's it's around finding the right opportunity and being really mindful of the risks that present isn't it um there's a question in here around what's the best place to find information on water trading which is a pretty open and broad question but i think it's you know it's a good one to think about the various places that um someone who's thinking about doing trading could actually where some of the key sources they might want to turn to to to inform themselves and what are some of the products that are out there definitely um well i'll start with the HRSA water market literacy program that we're currently doing we've done two webinars and workshops before that are up and available and we've covered water market fundamentals and we've covered secondary different secondary products such as parking and carryover and our leases and so that would be my first stop certainly due has a range of information and also the trusts have a range of fact sheets on there as indicated we in not not immediately but in the coming week the fact sheets for these webinars will be available and also Marsden Jacobs of Waterflow which we gave a presentation and a demonstration in the first webinar and a video is available as part of this work first workshop that will take you through and show you you know all the current prices the trading the connectivity and that's another really good resource. Thanks Stuart. I'm actually going to address this next question if I can to you and also to Francis because there's a couple of considerations in this so it's around parking water interstate and the question is when's the best time to park water what are the costs involved and I guess Stuart if you wanted to jump in I'd be interested your thoughts on when's the best time to be thinking about parking water is now a good time or not but I think the other consideration is in doing that sort of process that we need to be very mindful and this is Francis we're a great opportunity to remind people of some of the timelines they need to adhere to when they're thinking about parking water around particularly if there's an interstate consideration to it but Stuart did you want to go first and then maybe Francis if you go second yeah certainly I think it really depends on the product I guess here we're talking about parking interstate and the best time to park water I guess the purpose of parking is to utilize the characteristics of those entitlements in the other states that have that enable you to carry over and so that would be over the water here and having a certainty of an amount in the at the beginning of the next water year so typically carry over starts to you know to become available around the end of quarter four in the water year we certainly saw last year a lot of carry over occurring up to indications about 600 gigalitres was carry over and the southern connected so it was a very used product and at times there was no space available in some of those more accessible zones so yeah Simo if you've got any yeah if I can jump in just to continue on that that's exactly right Stuart and yet for parking it's it's only really topical during the second half of the year and you know if there are any water brokers in the audience correct me if I'm wrong but you would hardly ever see a carry over parking trade going through during the first six months of the season because not many people are willing to commit to to offering you know a carry over space on their entitlement because they are not really in a position to assess how much they would have available you know heading towards the tail end of the season so it's yeah it's very you know the the high season for parking is typically the last quarter of the year but obviously there is a long-term solution like if you want to secure some carry over space in the state you might consider leasing a low reliability entitlement for a long term and this happens you know it's it's not the most I suppose liquid lease market but it does happen so you know and the prices are somewhat in line with the annual parking fee so you know there may be parcels available for you to to lease low reliability water in Victoria for three to five years and that will give you additional carry over capacity for the term of that lease Francis from your perspective yes definitely it only happened in the second half of the year people this year nearly did it in the last two weeks of June so that's probably when most of the parking carryover occurs definitely take the opportunity to remind people that they must have their trades lost before 11 o'clock on the 30th of June and another little item to factor into their carry over is to make sure you read your meter and take into account any border you've used is your last lever read because you will trade what's available on your account but if you haven't factored in the last amount of youth then you may go into an overview situation which includes a penalty so it's too fact that the people need to consider with that now very important reminder you've got to have always got to be mindful of that as well see my building on what you were just saying then there's a question here can I buy water parking space interstate and what is the cost it's not really a uniform cost situation here but I wanted if you were able to sort of talk about some of the experience that we're witnessing in different parts yeah sure rod and a reminder in the last webinar we actually had some case study examples of parking water and what's the cost involved in that under some specific scenarios but yeah you know it depends on the location to begin with you know if you're in the Murray then as we've touched on previously finding parking space interstate in the Murray so that you can safely get that water returned to you in the new season those parking parcels were very much in high demand last year and the prices because of the higher demand were higher so we've witnessed prices you know up to 50-60 dollars per megaliter parking water in the Murray on a lower reliability in Thailand for instance in Victoria where the risk of spillage is minimal then in the golden you could find more affordable parking space but as we've touched on many a time during this workshop there was a risk of getting that water back because of the IVT Maron Bicci a lot of water was parked in the Maron Bicci as well and this was evident looking at the the transactions in the new water year that caused the Maron Bicci IVT out trade to be closed because water was parked in Maron Bicci and it was traded out so now you actually can't get water out of Maron Bicci so the cost it depends on the risk of spillage characteristic of the entitlement but also the location and broader speaking we're talking about a cost between five to sixty dollars per megaliter on an average year but it depends on a couple of different things and I wonder just building on Francis's comments there Megan if there's anything else that someone should be mindful of if they're doing something like temp parking arrangement or the like and they're within an IIO around processes and timing considerations and these sorts of things that we'd like to share with the group yep so if you're looking at transferring varying parking parking water and you're within an operator then you're obviously have to factor in the delays that might happen in terms of your operator processing your trade they have to you know check that you have the available water and make sure they have your approval to do that sometimes it can create delays because there is an extra party involved with doing that it is best if you use a broker to do those types of trades they ensure that you know it's done in a timely matter to the right to the right licenses through the right values and that so yes you just have to factor in the extra extra time so you know you don't want to leave it too late when you do these these trades to fit into the timelines so early engagement with the IIO is important early engagement with the respective departments is important and if you're dealing interstate be mindful as well of the cut-offs interstate as well and I think there's some excellent information in what you've put together Francis for us but I think from what I'm hearing Megan a few days in advance of that at the least as well there's always helpful particularly when you're going through peak transactional periods as well and you know with much of this occurring in that final quarter and even the final month or months there can be significant peaks in the workload at that stage which every obviously does the absolute best to get everything done in time but that there are challenges there and forms have to be submitted I think we've only got time for one more and this is I guess a pretty broad question I wonder if any of the guys in the panel want to have a chat about or want to comment on it but are there the question says referring back to comments about outlooks does the panel have any comment about the trade constraints currently in place and the amount of water in the Lower Murray namely SA Vic in New South Wales through the 2020 season which is a really important and good question I wonder Simo you've had a little bit of a look into this in recent times as a Stuart do you want to open in terms of responding to that can do yeah thanks Rod yeah in the first in the April webinar when the first sort of outlooks for the for the 2021 season were coming in we looked into this and had a present this slide about you know how much water is potentially made available in the Lower Murray assuming all the major trade limits restrict water coming into the Lower Murray so say be the Obama Chalk being closed for the full year the golden IVT being closed for the full year and the mara BG IVT out trade being closed for the full year and at that point in time the outlook was pretty grim you know under the worst-case scenario where you can't get water from other parts of the connected system into the Lower Murray but now you know the resource availability outlook has significantly improved and also the opening allocations have been fairly encouraging across the board really so obviously still if all these three main trade limits remain closed for the entire year sure you know water will be in high demand in the Lower Murray if it's dry but yeah I think the improved outlook is offsetting the current trade restrictions to a point does anyone else want to comment on that side of things or is nope look I agree exactly with what you're saying Simo thankfully the improved outlook is offsetting those sort of things I think the important message though always from a SA context is that it's always important to look at those zones for mine where there isn't restrictions and you are beneficially placed in the context of zones both in Victoria and New South Wales where no restrictions come into play and I personally would suggest starting in those and then if you are thinking about doing a transaction that is either into the Murrumbidgee, the Golden or above Balmachoke that there are very good information resources out there in terms of where the limits are at at this point in time and it's well worth having a look into the status of those we do on waterflow record the status of those limits but I'd also you know encourage you to go and have a look at what's on the relevant states or mdba websites for that sort of information Stuart did you want to comment further on that or should we bring this to a point I was going to mention the mdba and some of the reasons for moving water you know the underlying architecture of actually moving water from say using the storages in the golden to transfer water out can at times change those trade restrictions quite quickly so you know having notifications or something set up so you can get those alerts and be on top of when they're available because they're usually pretty hot property to get your trades through look we're right on time so I think I'll draw this to a close now first well I'd like to pass on our sincere thanks to Francis and Megan for your contributions today really grateful for your contributions really insightful comments and really helpful comments for everyone involved in the webinar I'd also like to thank my colleagues Stuart Simo and Amanda who you can't see in the background but who's the person who's made all of this happen technologically she's doing an awesome job there and also thanks to the guys at Persa Rachel and Tasha for all the time and contribution they've made following the webinar you'll be directed to a survey it might take you a couple of minutes but it is really helpful to us in terms of getting your feedback on what the matters that we've covered today whether there's other topics that you feel will be great to cover and how the webinar went as a whole and with that I'd like to wish you all a very happy afternoon and I hope you're all staying well and safe in these uncertain times all the very best and thank you so much for joining us today