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What you need to know about the Productivity Commission’s National Water Initiative draft report

The importance of nationally coordinated water reform

Australia’s water sector warrants national policy attention. It is a sector that provides essential services to almost all Australians, delivers a vital input to agriculture, businesses across the industrial and services sector, and is playing an increasing role in enhancing the liveability of our urban communities and circular economy. The efficiency and quality of its services can impact the national economy, the productivity of cities and the health and wellbeing of all Australians.

The National Water Initiative (NWI) represents the country’s blueprint for water reform, but the 17-year-old NWI is showing signs of age and is not fully equipped to deal with new and emerging issues.

The Australian economy and water sector have seen significant gains from over two decades of nationally coordinated water reforms. However, as stated in the Australian Water Association’s (AWA’s) 2020 submission to the NWI review, water reform principles have not been fully embedded in government processes and there is evidence of regressing on previously delivered reform outcomes.

The future of Australia’s water reform journey is now at a critical junction after decades of positive gains under Australia’s nationally coordinated water reform agenda.

The Productivity Commission’s National Water Reform Inquiry looks at the progress of all Australian governments in achieving the objectives, outcomes and timelines of reform directions proposed in the 2004 Intergovernmental Agreement on a National Water Initiative (NWI). Following the release of an issues paper in May 2020, the Australian Water Association (AWA) coordinated an industry wide submission, based on feedback from over 100 members, with the draft report being released by the Productivity Commission on 11 February 2021.

AWA’s submission called for a focus on six key areas, including urban water, rural water, groundwater management, community engagement, research and development, and national reform agenda.

While substantial outcomes have been realised under the NWI, there is a need to refresh the principles to capture emerging risks and opportunities. AWA sees the NWI as the key vehicle for nationally coordinated reforms and supports the Productivity Commission’s findings.

There is a compelling case for continued reform

Nationally coordinated governance arrangements have been a key feature of enabling reforms under the NWI, however since 2014, the Council of Australian Governments (COAG) Ministerial Council has disbanded, the National Water Commission no longer exists, and states no longer prepare rolling implementation plans.

In its submission to the Productivity Commission, the AWA outlined how a strengthened governance structure with national leadership on water policy would help to identify opportunities for progress of the national reform agenda.

The Productivity Commission’s draft report recommends modernising and strengthening the framework to provide clear guidance to governments, communities and industries over the next 10 to 15 years.

Corinne Cheeseman, CEO of AWA said, “In the past decade we have seen our communities face significant water challenges, it’s important that the NWI modernises to meet these challenges  so that we’re fit for the future.”

To achieve this, it recommends that water ministers meet regularly to monitor the development of the renewed policy, and to consider the advice received from periodic reviews. It also recommends three‑year rolling implementation programs by jurisdictions, which would describe how they aim to achieve the outcomes set out in the renewed agreement.

There would also be independent triennial assessments, an independent policy review of the agreement every 10 years, and ongoing supervision of the agreement by the multi‑jurisdictional National Water Reform Committee.

Improving community engagement and cultural water management practices

As reflected in AWA’s submission, community engagement should also be factored into water governance arrangements. Community expectations of providers in urban areas have extended beyond clean, reliable and affordable water and wastewater services, to include the role of enhancing liveability.

“Meaningful and inclusive community engagement will be critical to achieving the needs and values for water in our communities. Including with our First Nations people and embedding cultural practices and values into water management” Cheeseman said.

AWA’s submission also included the requirement of a First People’s Water Council to ensure genuine engagement with Indigenous communities in water planning across each jurisdiction. It notes that consideration should also be given to reserving a share of entitlements from new infrastructure for Traditional Owners. Feedback is now being sought by the Productivity Commission on whether planning processes for new infrastructure projects are culturally responsive and should be added to the NWI to reflect requirements for deep consultation with Traditional Owners and protection of cultural assets.

Understanding and supporting Aboriginal and Torres Strait Islander people’s aspirations for greater access and control over water resources has also grown since the implementation of the current NWI. The draft report advises that a new NWI element should be developed by the recently formed Committee on Aboriginal Water Interests, to include advice on water management measures. This will help to achieve cultural and economic outcomes for Aboriginal and Torres Strait Islander people, as well as the inland waters and service delivery targets in the 2020 National Agreement on Closing the Gap.

Diversifying infrastructure options in remote and urban areas

The draft report also includes recommendations for new criteria for infrastructure projects. Modernising and strengthening the current NWI will help to ensure our precious resource can meet the future needs of all Australians and remain resilient in the face of climate change.

Central to the modernisation of the NWI is acknowledgement of the uncertainty of climate change scenarios. This includes the likelihood of an increase in the frequency and severity of droughts and floods across the country and a significant reduction in the availability of water across the country.

“Looking at achieving water security through diversity of supply options, as a part of an integrated water cycle management (IWCM) approach, will be vital to ensure that the water sector can meet future challenges and continue to deliver essential services for our changing communities in cities and regional areas” Cheeseman said.

Australia also faces the challenge of less water and more people. Capital city populations are projected to increase by 11 million people by 2050, placing further pressure on water supplies.

In addition to recommendations to modernise and strengthen the existing agreement, the report identifies the major water management issues to be addressed. This includes the potential future policy directions that will reflect the importance of both sustainable water resource management and effective, equitable and efficient water service provision.

Next steps and how you can get involved

Submissions for the draft NWI report are due by Wednesday 24 March 2021. After this a Public Hearing will start on 29 March 2021 with the final report submitted to Government in June 2021.

 AWA’s CEO, Corinne Cheeseman will also be attending a Stakeholder working group meeting in early March 2021 to discuss feedback. If you’d like to provide comments or feedback to the draft report you can do so independently, however AWA is happy to hear your feedback too, contact us feedback@awa.asn.au before COB 28 February 2021.

The final report will be released in May 2021. AWA and the Water Services Association of Australia (WSAA) are considering holding a session at Ozwater’21 to engage with members on the final report if the timing aligns.

You can find all information for the National Water Reform inquiry on the Productivity Commission’s website.