All Australians need a reliable water supply that is safe to drink. The correct treatment and disposal or reuse of domestic wastewater and industrial wastes is also essential to our economy and the health and wellbeing of all Australians. Over the last 200 years these essential services have been the direct responsibility of governments and their agencies.
The Australian economy and population have been steadily growing and the demand for water continues to increase in line with that growth. For example, water demand increased significantly by 67 per cent from 1986 to 1997 with the most of this growth associated with expansion in irrigated agriculture. Per capita water consumption also increased in the urban sector from 95kL in 1993-94 to 115kL in 2000-01 (ABS 2005 p.183). However, due to factors, including drought awareness and water restrictions, urban water use has decreased since 2001. For example, in 2004-05 urban users consumed, on average 84kL per person a reduction of some 3.65 per cent since 2003-04 and a 15 per cent reduction in per capita consumption over four years since 2000-01. At the same time, average household consumption in capital cities fell by 9 per cent, from 251kL per household per annum in 2000-01 to 225kL per household per annum in 2004-05 (Water Services Association of Australia (WSAA), 31 January 2006 press release).
In their report Water and the Australian Economy the Australian Academy of Technical Sciences and Engineering and the Institution of Engineers highlighted that if water use trends continue the water needs of industry, particularly irrigation industries, will be seriously affected by a shortfall in water availability by 2020 (1999 p. 4). In 2006 the Business Council of Australia observed that with an expected rise in population to 25 million by 2025, nearly all Australian cities will be consuming water at unsustainable levels (BCA, 2006 p.12). Some governments are proposing and implementing strategies to mitigate these risks and meet water supply and demand issues, through initiatives such as desalination and recycling schemes.
The ability to meet future water supply demands in urban and rural regions are likely to be stretched further by the need to return water to the environment, growth in the Australian economy and impacts from climate change (some catchments that supply major Australian cities are recording decreasing water yields of up to 25 per cent. In the most extreme case flows into Perth's reservoirs have declined by 64 per cent in the last 20 years (WSAA 2005 p.3).
There is also a need for additional investment in water supply and wastewater infrastructure to improve efficiencies and meet future needs. According to Engineers Australia over the next 20 years water supply and sewerage capital expenditure in South East Queensland, Sydney and Melbourne will amount to at least $12.6 billion (2000 p. 35). The BCA also reported in 2006 that there is an urgent need to invest in water infrastructure to minimise wastage and improve Australia's GDP (BCA 2006).
The challenge is to provide for the future growth in water and wastewater services to our cities and towns as well as water for irrigation and other forms of agricultural production. This challenge also involves the maintenance and renewal of existing infrastructure and the provision of new infrastructure and services. The overarching question posed in this discussion paper is:
To what extent should the private sector play a role in this challenge, and how can their participation be facilitated and managed to ensure more efficient and enhanced water supply for Australia?