The Murray-Darling Basin Authority will reportedly lose its enforcement powers and environmental water buybacks are to be scrapped in a major overhaul.
Water Minister Keith Pitt will also on Friday announce details of plans to save water by upgrading infrastructure for irrigators, The Australian says.
Communities along the Murray River including battling small irrigators who have railed against buybacks are likely to support the changes but they will no doubt upset environmental groups.
The Murray-Darling authority has supervised the competing interests of irrigators and communities, and environmental concerns for more than a decade.
However its powers will be handed to the Inspector General of Murray-Darling Basin Water Resources, former Australian Federal Police commissioner Mick Keelty, The Australian says.
As recently as July, the Australian Competition and Consumer Commission called for a shake-up of Murray-Darling water markets, warning of serious problems needing urgent action.
The watchdog released and interim report into the $1.5 billion-a-year trade, in which it found market intermediaries like brokers and water exchange platforms operated in a mostly unregulated environment which fostered conflicts of interest and dodgy reporting.
It concluded there were few safeguards against price manipulation and nobody monitoring trading activities of market participants.
Information failures limited the openness of markets and favoured better-resourced and professional traders.
ACCC deputy chair Mick Keogh said water markets had brought significant benefits to irrigators across the Murray-Darling Basin.
“However these markets have significant problems,” he said.
He criticised complex regulation across some areas and concerning lack of oversight in others.
