National Water Reform 2024

Australia needs a revitalised National Water Initiative

Australian governments must renew and update the National Water Initiative (NWI) agreement to navigate water security challenges driven by climate change, growing and changing demand for water and the transition to net zero emissions, according to the final report of the Productivity Commission’s review of the agreement.

The 2004 NWI sets out principles for water management, covering everything from access rights to pricing principles and investment in infrastructure. The Australian, state and territory governments are currently negotiating to renew the NWI, with a new agreement expected later in 2024.

“Water is essential to the wellbeing of all Australian communities, the environment, and the economy. It is in everyone’s interests that water is well managed. The National Water Initiative has served Australia well for the past 20 years and it is time to build on these strong foundations to meet current and future challenges,” said Commissioner Joanne Chong.

“Climate change is making rainfall harder to predict and is leading to more frequent extreme weather events. The new agreement currently being negotiated by Australian governments needs to protect water security in the face of these challenges,” said Commissioner Chong.

The current NWI objectives focus on water resource management, but there are also challenges with providing water services in both cities and regional areas.

“Some regional and remote areas still lack access to safe drinking water. In a renewed National Water Initiative, State and Territory governments must commit to ensuring all Australians have access to a basic level of service for safe and reliable drinking water,” Commissioner Chong said.

A renewed NWI should also better support the unique role of water in the lives and livelihoods of Aboriginal and Torres Strait Islander people.

“The NWI needs to better recognise Aboriginal and Torres Strait Islander people’s reverence and ongoing responsibility for water and support their participation in water management,” said Commissioner Chong.

The report emphasises that a renewed NWI must build on the 2004 agreement.

“The water reform compact between all Australian governments needs committed leadership and better governance practice – one that prepares us for the future by building on the strengths of the old agreement. That a Ministerial Council plans to meet this week for the first time in 11 years to talk about national water reform is a hopeful sign that it is again a priority for Australian Governments,” said Commissioner Chong.

Read the report at www.pc.gov.au.

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• The 2004 National Water Initiative (NWI) has served Australia well as a foundation for water management. But a renewed and updated NWI will help governments navigate growing water security challenges.
  • Climate change is making rainfall as a water source increasingly less reliable.
  • Demand for water is growing and changing.
• Planning for water security should be a greater focus of a renewed NWI, in the face of an increasingly variable and changing climate.
  • Jurisdictions need to plan for threats to water quality and availability from an increased risk of flooding, storms, bushfires and sea level rise, as well as drought.
  • Governments also need to collectively model and plan for the water demands of the transition to net zero emissions.
  • All options need to be on the table and transparently assessed, to ensure water security is achieved at least cost to the Australian community and to sustain the underlying health of water systems.
• A renewed NWI should improve and expand on the existing agreement while retaining its foundations.
  • A recommitment to the core principles of the NWI will provide a consistent authorising environment for jurisdictions to implement and continue to improve on best-practice.
  • The current advice for renewing the NWI is consistent with advice provided in the Productivity Commission’s 2021 National Water Reform Inquiry report.
  • A renewed NWI requires modernised and additional objectives that reflect community expectations for effective, efficient and equitable delivery of water services.
• A renewed NWI should include both an objective and a new element, recognising First Nations peoples’ reverence and cultural responsibility for water and the continued involvement and participation of First Nations peoples in water management.
  • The Committee on Aboriginal and Torres Strait Islander Water Interests should continue to lead the development of this new content in a renewed NWI.
  • Governments should ensure alignment with their commitments under the National Agreement on Closing the Gap.
• Many of the discrete actions under the NWI are complete, and most jurisdictions continue to make progress implementing their remaining and ongoing 2004 NWI commitments. However, gaps remain.
  • Western Australia and the Northern Territory have not implemented statutory perpetual water rights.
  • Fully independent economic regulation of water utilities has not been adopted by all states and territories. In Western Australia, Queensland and the Northern Territory, independent economic regulators do not have the power to set water prices.
  • Jurisdictions are in the process of developing action plans and strategies to include First Nations peoples in water planning and decision-making processes, but implementation is in the early stages.

• Preliminaries: Cover, Copyright and publication detail, Transmittal letter, Terms of reference, Contents, and Acknowledgements
• Overview - including key points
• Recommendations and findings
• NWI renewal advice
• 1. Governance for a renewed national approach to water reform
  • 1.1 Benefits of national co-operation in water
  • 1.2 The Commission’s 2021 NWI governance renewal advice is still relevant
  • 1.3 Greater knowledge sharing, effective coordination, and promotion of best practice
  • 1.4 The role of the Water Act 2007 (Cth)
  • 1.5 Renewal advice
• 2. Water interests of First Nations peoples
  • 2.1 Introduction
  • 2.2 First Nations peoples’ representation in water planning
  • 2.3 Incorporating First Nations peoples’ objectives and strategies for achieving them in water plans
  • 2.4 First Nations peoples’ access to water, including through native title rights to water
  • 2.5 Renewal advice
• 3. Water security in a changing climate
  • 3.1 What is water security?
  • 3.2 Climate change poses a major risk to Australia’s water security
  • 3.3 Climate projections to inform water planning
  • 3.4 Using the renewed NWI to manage the risks to water security from a changing climate
  • 3.5 The water demands of transition to net zero
  • 3.6 Planning to provide cost effective urban water services in a changing climate
  • 3.7 Renewal advice
• 4. Water access entitlements and planning frameworks
  • 4.1 Water access entitlements
  • 4.2 Water planning
  • 4.3 Water for environmental and other public benefit outcomes
  • 4.4 Addressing overallocated and overused systems
  • 4.5 Assigning risks for changes in allocation
  • 4.6 Interception
  • 4.7 Integrating surface water and groundwater management
  • 4.8 Renewal advice
  • 4.9 Annex
• 5. Water markets and trading
  • 5.1 Removing unwarranted trade barriers
  • 5.2 Publicly accessible and reliable water registers
  • 5.3 Reducing transaction costs by improving water market information
  • 5.4 Compliance with trade approval service standards
• 6. Best practice pricing and institutional arrangements
  • 6.1 Best practice pricing and regulation
  • 6.2 Investment in new or refurbished infrastructure
  • 6.3 Cost recovery for water planning and management activities
  • 6.4 Environmental externalities of water use
  • 6.5 Release of unallocated water
  • 6.6 Separation of water management from service delivery
  • 6.7 Performance benchmarking
  • 6.8 Findings
• 7. Integrated management of water for environmental and other public benefit outcomes
  • 7.1 Identification of specific environmental and public benefit outcomes
  • 7.2 Management and institutional arrangements
  • 7.3 Water recovery for the environment
  • 7.4 Findings and renewal advice
  • 7.5 Annex
• 8. Water resource accounting
  • 8.1 Water accounts
  • 8.2 Environmental water accounting
  • 8.3 Water metering and measurement
  • 8.4 Compliance and enforcement
  • 8.5 Finding and recommendation
• 9. Urban water reform
  • 9.1 Urban water service quality
  • 9.2 Water reuse, end use efficiency, water sensitive urban design and innovation
  • 9.3 Findings
• 10. Knowledge and capacity building
  • 10.1 Priority setting and coordination of knowledge generation
  • 10.2 Knowledge generation
  • 10.3 Capacity building
  • 10.4 Overall assessment
  • 10.5 Annex
• 11. Community partnerships and adjustment
  • 11.1 Community partnerships
  • 11.2 Community adjustment assistance
  • 11.3 Renewal advice
• A. Public engagement
• B. Assessment of progress ratings and indicators
• References

Printed copies of this report can be purchased from Canprint Communications.