The NWI and Murray-Darling Basin Plan have been the catalyst for considerable regional water market reforms in recent years, particularly in NSW and Victoria. However, further reforms are required to ensure scarce water resources are allocated in an efficient manner that optimises benefits across economic, social and environmental purposes.
Audit finding 77. There is a need for additional market reform in the rural water sector, including market-based allocation of defined catchment resources, and transparent pricing of irrigation water. |
The Audit found that water quality varies greatly across Australia. While water quality in urban areas is good, in parts of regional Australia it does not meet relevant drinking water standards. At present, water businesses are subject to a range of regulatory requirements concerning drinking water quality and the quality of wastewater discharges, with regulatory responsibility lying with the Department of Health and the respective state/ territory based Environment Protection Agencies. National leadership is required to implement initiatives that will raise drinking water quality to at least the minimum standard across Australia.
Audit finding 78. Water quality in urban areas is good, but in parts of regional Australia it does not meet relevant drinking water standards. |
Catchment water planning and environmental considerations have been a strong focus of reforms to date, particularly for the rural water sector. Future reform initiatives will need to consider the full range of shareholders in rural and regional areas to ensure that agreed objectives achieve a balance between economic development, sustainability and resilience to periods of drought.
The increases in demand for water and sewerage services projected in the Audit are likely to be a driver for real price increases over a prolonged period. This could raise serious affordability issues, especially in rural regions of Australia. However, in the absence of price increases, water businesses will begin to struggle to finance the required expansion of capacity without an increased level of government funding.
Water issues in rural and regional areas are under consideration by the Australian Government through the Agricultural Competitiveness White Paper, due for release in 2015.263 The Green Paper, released in 2014, represents views put forward by stakeholders and includes discussion of various issues concerning drought and water management, including:
■ allocating $22 million to existing state government emergency water infrastructure schemes;
■ contributing up to $12 million in 2014-15 to support state government water-related infrastructure rebate programs;
■ implementing the Murray Darling Basin Plan, prioritising water recovery through on- and off-farm infrastructure investments and increasing market certainty by publishing a Water Recovery Strategy; and
■ completing implementation of the $10 billion Sustainable Rural Water Use and Infrastructure Program, aimed at investing in rural water use, management and efficiency.264
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263. Australian Government (2014a)
264. Australian Government (2014b)