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Better policy and planning needed to create liveable cities: Productivity Commission

As Australia’s cities face pressure from population growth and climate change, the urban water sector will be challenged to provide traditional water and wastewater services while creating liveable neighbourhoods.

In a new report, Integrated Urban Water Management – Why a good idea seems hard to implement, the Productivity Commission looked at how integrated water cycle management (IWCM) could provide a holistic approach to the way we supply water and manage stormwater and wastewater.

It looks to follow on from the National Water Initiative and get on the front foot when it comes to planning for the future of urban living in Australia. However, it found that the issue of which IWCM projects are worth pursuing, how they should be funded, and who has the authority to put them in place remain difficult questions.

“Our current approach to urban water management won’t deliver,” Commissioner Dr Jane Doolan said. 

"It is often fragmented, with stormwater managed separately to water supply and wastewater. Too often water services aren’t properly considered when planning land use and building new suburbs.”

Growing challenges

The Commission found that Australian water policy faces major challenges in the coming decades to maintain urban liveability and green spaces, and that the requirements for water can only be efficiently delivered through an integrated approach that brings together water authorities, land use planners, environmental regulators and local governments. 

The report identified 10 impediments to adopting a more integrated and effective approach to urban water management across government policy, service planning and delivery, and regulation and funding, with the lack of clear policy objectives emerging as a key theme.

“We’re talking particularly about the new growth corridors in Sydney and Melbourne because they’re the urgent priority,” Doolan said. 

“The water industry will be spending tens of billions of dollars in those areas on infrastructure over the next decade, so it is important that we make decisions on the form of those suburbs, and what we want them to look like.”

The main question then becomes what specific objectives for urban amenity do governments want to see as we design those new suburbs. Once these are agreed on, water authorities can partner with local governments and planning agencies to work through the best and most cost effective way to achieve them. 

“We understand it’s not easy for governments to set those objectives; there’s always a trade off, but water utilities and local governments can work through those if they have specific objectives,” Doolan said.

And while many governments have “motherhood-type statements saying that IWCM is a good thing,” Doolan added that what is lacking are more specific objectives on the quality of urban amenity. 

After setting these objectives, she said that all options for water management need to be considered. 

“We really don’t believe in policy bans on use of recycled water for potable drinking supplies; that needs to be on the table to be assessed alongside other options,” she said.

Doolan added the caveat that “not all IWCM projects are good projects,” as some “could be quite an expensive way of delivering the outcomes that we want.”

Best practice approaches

The Productivity Commission emphasised the need for consistent policy and planning frameworks to deliver on urban water challenges, with Doolan pointing to two examples of best practice collaboration.

“[This includes] the Victorian model of the integrated water management forum, which works at catchment scales as well, where they are getting all the local governments together with the water utilities," she said. 

"Collaborative forums are important, but policy objectives come first because they provide the authorising environment.

“The Western Australian model, where water management is linked to statutory planning, is also a good one. They have a policy which requires water managers to talk to the city planners and local governments at each different scale, and the water management questions are different at each different scale. The authorising model requires that level of collaboration.”

Getting the right kind of decision making and authorising model in place is critical, because not only is there no constituency to be consulted in the new growth corridors, “once the urban form is set and the water infrastructure is built, it’s virtually irreversible,” Doolan added.

The report also noted that there is often little opportunity for land and water planners to interact, while a lot of political discussion lacks high-level knowledge of the importance of urban amenities. 

“If that decision is made that water managers have to deliver safe water, treat wastewater, manage stormwater, and contribute to urban amenities, decisions need to become a formal outcome of that process. Once the objectives are set, the cost benefit comes from that,” Doolan said.

"Decisions taken now will set up the nature of these new suburbs forever and we need to get it right. A lack of integrated thinking to date has seen some expensive and low value solutions. Equally, we have to be open to alternative solutions, including using recycled water for drinking.”

The Productivity Commission is launching a new inquiry following this report into the progress of jurisdictions and priorities for future national water reform. An issues report will be released in the coming weeks, with the Commission welcoming submissions from the water utilities sector.

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