National Water Reform 2024

Terms of reference

National Water Inquiry

I, Senator the Hon Katy Gallagher, Acting Treasurer, pursuant to Parts 2 and 3 of the Productivity Commission Act 1998 and Section 88 of the Water Act 2007 (the Act), request the Productivity Commission (Commission) undertake an inquiry into the reform progress of Australia's water resources sector.

The Inquiry should advise on the progress of all Australian governments in achieving the objectives, outcomes and timelines anticipated under the 2004 Intergovernmental Agreement on a National Water Initiative (NWI) and where practicable on key aspects of water security for Australia, as set out below.

Background

Reform of the Australian water sector has been ongoing over several decades, reflecting the fundamental importance of water to all aspects of our society and environment, and the significant challenges involved in managing a shared natural resource impacted by climate change and periods of scarcity. A national approach to water reform started in 1994 through the landmark COAG water reform framework and has continued through subsequent initiatives such as the NWI (2004), Commonwealth Water Act 2007 (the Act) and Murray–Darling Basin Plan 2012.

The Australian Government has committed to renew the NWI. This inquiry provides an opportunity for the Commission to examine in more detail the issue of water security, as a key driver of national water reform.

Scope of the inquiry

In addition to the requirements in the Water Act, the scope of the inquiry should examine whether the national water reforms agreed in the NWI, along with any other subsequent national water reforms collectively adopted by Australian governments, are achieving their intended outcomes.

In undertaking the inquiry, the Commission should assess:

• progress in jurisdictional adoption of NWI principles, objectives and key outcomes and, where not adopted, issues that may influence implementation, and the opportunity costs of not doing so
• outcomes to date of the NWI and related water reform efforts, taking account of other reform drivers
• where practicable, implications for key water security and management challenges for Australia, including economic, environmental, social and cultural.

The Commission should provide recommendations:

• on actions that the parties to the NWI might take to better achieve the objectives and outcomes of the NWI
• to support all Australian governments in efforts to progress national water reform in light of current priorities, including water security and the involvement of First Nations communities in water management.
• on how the Australian Government can better utilise the Act as a framework for guiding national water reform policy.

In conducting the inquiry, the Commission should consider:

• the objectives provided for in clause 23 of the NWI
• any current Commonwealth, state or territory reform initiatives relevant to the Inquiry scope
• the perspectives and cultural rights of First Nations Australians.

Process

The Commission is to undertake a public consultation process including, where appropriate:

• establishing a stakeholder working group in accordance with section 89 of the Act
• inviting public submissions
• holding public hearings
• releasing a draft report to the public.

The Commission should consult broadly, including with Commonwealth, state and territory governments, relevant sectors and stakeholders and First Nations peoples.

Senator the Hon Katy Gallagher
Acting Treasurer

[Received 22 December 2023]