Australia has built two powerful responses to climate change: a national adaptation agenda and a generation of water reform. But they are still running on separate tracks. With the Productivity Commission reporting in September, governments have a rare opportunity to connect them and make water reform the foundation of climate adaptation.
During the Millennium Drought, we learnt a lesson Australia cannot afford to forget. Climate change arrives as water change. Every hard decision made through those years, about towns, farms, rivers and industry, was ultimately a decision about water.
A drought is a creeping natural disaster, unlike a flood or a fire, which does its damage and lets you plan the recovery. In the middle of that drought there was no way of knowing whether we were near the start, the middle or the end. Nothing like it existed on the record, so government had to assume it was not going to end.
On Melbourne Cup Day in 2006, the Prime Minister and premiers met because the existing rules for sharing water could no longer guarantee critical human needs.
In South Australia the response became a whole of government effort: a Water Security Council drawing together every agency with a touch point on water, one channel to Cabinet, Treasury at the table, and community liaison people on the ground. Irrigation seasons opened on allocations as low as 2%. Yet critical human water supplies were maintained and the worst predicted ecological consequences, including widespread acidification of the Lower Lakes, were avoided.
Water reform, done properly, is what climate adaptation looks like. We know how to do this, because we have done it before.
Ask any Australian how climate change will reach them and they will describe water: the dam that did not fill, the river that flooded the town, the bore that turned salty. Yet twenty years on from that drought's hardest days, Australia runs two good systems that rarely speak to each other.
One manages climate adaptation, with a national risk assessment that names water security among its highest cross-system risks, an adaptation plan, and official climate scenarios that count the towns at risk of running short of drinking water.
The other manages water, through the rules and institutions now being assessed in the Productivity Commission's fourth national review of reform, with a new National Water Agreement on the table. No formal mechanism requires them to use the same objectives, the same scenarios or the same evidence. Two national plans, sitting side by side, are free to assume different climates: two streams in the same catchment, fed by the same rain, that never meet.
The need for a more joined-up approach is reflected in the water sector’s advice to government. Across its first and second submissions to the National Water Reform 2026 inquiry, the Australian Water Association has called for climate adaptation to be better embedded in water planning and for the findings of concurrent national reviews to be brought together. AWA's National Policy Forum Outcomes Paper, shaped by leaders from across the sector, similarly calls for water to sit at the centre of coordinated national planning for climate resilience, productivity and community wellbeing.
What made the last generation of water reform endure was not clever policy drafting. It was shared ownership. The National Water Initiative was developed through the Council of Australian Governments, with every jurisdiction at the table from the outset, not presented with a finished agreement to sign.
It was backed by investment, underpinned by independent reporting to First Ministers, and built on the best reform governments could collectively agree to at the time. It was necessarily prescriptive in places because trust was still being built. As confidence grew between governments, so did the flexibility to adapt the framework. That's an important lesson for today: lasting reform is built on trust, and the more trust you build, the less prescription you need.
Since COAG became National Cabinet, water has lacked that sustained first-minister attention, and the authorising environment that once held every government to the same agenda has thinned. The remedy is not Canberra directing more. Water reform succeeds in this country when the states own it.
Adaptation does not happen inside a national plan; it happens in a catchment, an aquifer, a town water supply, under state laws and institutions. The new National Water Agreement will succeed the way its predecessor did: with the states and territories at the table from the first draft, not invited in at the signature line.
So what should governments actually do? Four practical things. None needs a new institution, and all of them cost less than the alternative, because reform is always cheaper than emergency response.
First, start from the same evidence. Australia should not have one picture of climate risk for adaptation policy and another for water planning. Governments should agree on the climate scenarios, the core water information and the way risk is assessed, then let states and catchments apply that evidence to their own circumstances. Decisions will differ, as they should, but they should all begin with the same understanding of the future. It also means Australia assesses water risk once, not twice in two portfolios.
Second, count water planning as climate adaptation. Water planning is already Australia's biggest adaptation tool: statutory plans set the long-term rules for sharing water, and allocations respond every season to the water actually there. The new National Water Agreement should recognise it as exactly that, and expect every water plan to show how it has faced climate risk.
Third, guarantee a basic level of service. Regional and remote Australians will feel water change earliest and often have the fewest options to respond. Australia should commit that every community, however small or remote, can count on safe and reliable drinking water, build climate resilience into that standard from the outset, and fund it through transparent, multi-year commitments rather than grant by grant.
Fourth, resource Traditional Owner-led water adaptation. We do not write on behalf of Aboriginal and Torres Strait Islander peoples. But the structural requirement is clear: bringing water and climate together must not simply consult First Peoples’ communities about frameworks designed elsewhere. It must fund Indigenous-led work, including on governance, access to water, cultural water outcomes and control of Indigenous data, and create pathways for its findings to shape water planning, investment and governance.
The decision in front of ministers is simple. When the Productivity Commission's report reaches government on 4 September, ministers should use it to adopt one shared proposition: water reform is climate adaptation.
Write it into the National Water Agreement as a shared principle, with the four actions above as the commitments that deliver it, and match it on the Commonwealth side when the National Adaptation Plan is next updated. Australia has one of the world's most sophisticated water reform systems. If we connect it to climate adaptation at home, we will have something practical to share with countries across the Indo-Pacific facing the same challenge.
Australia does not need to start again. The climate risk assessment has been completed. The National Adaptation Plan is in place. The National Water Agreement is being settled now. The opportunity before governments is not to create another framework, but to connect the ones we already have.
As one of us has often said, you cannot cut a ribbon on intergenerational equity, but every water decision we make today shapes the inheritance we leave tomorrow. Water reform is climate adaptation. The task now is to recognise this, embed it and deliver it.
Interested in learning more about advocacy at AWA? Learn more here.
Karlene Maywald was South Australia's Minister for the River Murray and Water Security through the Millennium Drought, chaired the National Water Commission, and chairs WaterAid Australia. Amy Dysart is director and principal of In-Depth Strategy and a non-executive director of the Australian Water Association.