7.4.3.1  Governance

The NWC was established by the Australian Government in 2004 to drive national water reform under the National Water Initiative (NWI). The NWI set an ambitious reform agenda, aimed at achieving efficient water use and investment and improved environmental outcomes. There has been substantial progress in implementing the NWI, including:

■  developing statutory water plans across critical catchments;

■  establishing statutory water rights and securing rights to water for the environment;

■  separation of policy, regulatory and service delivery functions to improve accountability and the establishment of clear objectives;

■  independent economic regulation in most states and territories;

■  corporatisation of water businesses to drive operating efficiency and innovation; and

■  driving efficiencies in urban and rural water use.

The Australian Government announced its intention to abolish the NWC in the 2014-15 Budget and transfer its functions for monitoring the implementation of the NWI to the Productivity Commission.

Each state and territory has its own set of institutional arrangements for the governance, reporting and environmental management of its water sector. There is an ongoing need for national leadership and coordination in the water sector, in order to provide a clear role for governments in managing a complex regulatory environment. A clear definition and separation of roles and responsibilities between government agencies and water service providers would benefit consumers and investors.

At present, regulation of the sector is fragmented and may not effectively protect the long-term interests of consumers. National leadership is required in the sector to ensure that the NWI objectives are pursued in a direct and transparent manner, while providing a platform for long-term planning decisions and private sector investments to be well-allocated and effective.