Deputy Prime Minister Michael McCormack has again rejected a water royal commission despite his predecessor in his rural NSW seat calling for a major inquiry to shed light on the commodity's trade.
Former Riverina MP Kay Hull believes calls for a royal commission should be led by the Nationals in a bid to shine a light on transparency, management and control of water across the Murray-Darling Basin.
"I appreciate what Kay said. Kay is obviously passionate about water and passionate about making sure the right thing is done," Mr McCormack told AAP on Friday.
He said calls for a royal commission were first raised by South Australian senators from the Greens and Centre Alliance, while NSW irrigators were on low or zero water allocation.
"The fact is the Murray-Darling Basin Plan is an environmental document," he said.
The deputy prime minister said a royal commission could cost up to $80 million, and the government had asked the auditor-general to look into water buybacks since 2008 and the competition watchdog to examine water trading.
"It's a cause celebre these days for everybody to call for a royal commission into everything," Mr McCormack said.
However, the coalition has said it will task Australia's competition watchdog with taking a close look at water trading in the Murray Darling Basin if it is returned at the May 18 election.
Agriculture Minister David Littleproud said the move was in response with concerns farmers raised with him about the lack of transparency in the market and the role of investors.
"It's time to get under the bonnet and have a good look at how and if the market is working," he said in a statement.
"We need to shine the light of day in on this. We need to know what's working and what isn't so relevant governments can get to work and fix it."
The Australian Competition and Consumer Commission would be tasked with examining the water market's transparency and operation; developing market trends; and the role of water brokers, investment funds, and significant traders.
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