Productivity Commission’s National Water Reform Inquiry Issues Paper

Australia has a history of world-leading water reform. The 1994 Council of Australian Governments Water Reform Framework and the 2004 National Water Initiative (NWI) were seminal intergovernmental agreements that drove valuable reform for two decades. However, with the exception of very recent developments on groundwater, climate change, and engagement with Indigenous peoples, water reform has been mostly absent from the national agenda in recent years.

In 2013, the Council of Australian Governments (COAG) Standing Council on Environment and Water was disbanded, and in 2015 the National Water Commission was abolished. ATSE believes that these decisions were short sighted, as they diffused responsibility for implementing the NWI and reduced the national impetus for water reform. The 2016 State of the Environment report found that “progress has slowed in areas such as development of comprehensive water plans, improvements in sustainable water use, standardisation and nationalisation of water markets, and broader adoption of water accounting.”

This reform fatigue has placed Australian water policy and governance at serious risk of failing to meet the challenges of increasing competition for water and the associated water stress in a changing climate. Australia lacks a clear leadership framework to drive the next generation of reform. It is important that Australian governments work proactively and collaboratively to develop and implement water policy that drives investment, innovation, equity, sustainability and water resilience for the benefit of Australian communities.

Australia needs a new generation of evidence-based water reform goals, not just a progress report on the current NWI. Whilst the NWI drove significant progress, a number of reform areas were underdone. Recent research on the issues arising from water reform to date, has identified a number of economic, social, and legal issues which need urgent attention in the next phase of water policy reform. Balancing the multiple tensions of the water-energy-industry-climate nexus is a key challenge for Australia’s governments. Without a framework that addresses these interactions, Australia risks isolated policy decisions that create significant impacts and challenges for third parties.