Urban water policy and reform

​​​​Policy and reform in urban water helps:

  • secure water supplies
  • use water wisely
  • address the challenges of climate change and population growth
  • support healthy urban waterways.

Urban water reforms

Since 2016, the Australian, state and territory governments have worked together through the Urban Water Reform Committee (UWRC) to identify the next stages of urban water reform in Australia.

In 2019, the National Water Reform Committee (NWRC) agreed on a framework and principles for advancing this work.

On 27 November 2020. the UWRC released two complementary reports which map the way forward.

On 16 April 2021, the Australian Government released the Town and City Water Security Definition and Diagnostic Report that proposes a common definition of water security, as well as developing and testing new tools to help address water security issues in towns and cities across Australia

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Town and City Water Security Definition and Diagnostic Report PDFPDF Icon 41 6.0 MB
Town and City Water Security Definition and Diagnostic Report DOCXWord Icon 41 1.3 MB

Please note: This report was not prepared by the department and may not meet Australian Government accessibility guidelines. If you require an accessible version of the publication, please contact its author.

Advancing the urban water sector: A framework and roadmap for coordinated action

This report identifies a framework, principles, priorities and actions to advance the urban water sector through coordinated actions and efforts.

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Advancing the urban water sector: A framework and roadmap for coordinated action PDFPDF Icon 34 628 KB
Advancing the urban water sector: A framework and roadmap for coordinated action DOCXWord Icon 34 873 KB

Please note: This report was not prepared by the department and may not meet Australian Government accessibility guidelines. If you require an accessible version of the publication, please contact its author.

Institutional arrangements for urban water

This report:

  • identifies model institutional arrangements for advancing urban water reform across all jurisdictions
  • provides relevant examples of existing or intended urban water institutional arrangements.

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Institutional arrangements for urban water PDFPDF Icon 47 1.2 MB
Institutional arrangements for urban water DOCXWord Icon 47 867 KB

Please note: This report was not prepared by the department and may not meet Australian Government accessibility guidelines. If you require an accessible version of the publication, please contact its author.

History of urban water reform

COAG Water Reform Framework (1994)

Water reform in the urban sector was a significant element of the 1994 COAG Water Reform Framework. Reforms such as the introduction of two-part tariffs in which users pay a delivery charge as well as a charge for the amount of water used has encouraged more efficient and significantly lower water use per person in urban areas.

National Water Initiative (2004)

The National Water Initiative is Australia's blueprint for water reform and represents a shared commitment by governments to increase the efficiency of Australia's water use, leading to greater certainty for investment and productivity, for rural and urban communities, and for the environment.

The National Water Initiative was signed at the 25 June 2004 COAG meeting. The Tasmanian Government joined the Agreement in June 2005 and the Western Australia Government joined in April 2006.

The National Water Initiative aims to achieve the following outcomes:

  • provide healthy, safe and reliable water supplies
  • increase water use efficiency in domestic and commercial settings
  • encourage the re-use and recycling of wastewater where cost effective
  • facilitate water trading between and within the urban and rural sectors
  • encourage innovation in water supply sourcing, treatment, storage and discharge
  • achieve improved pricing for metropolitan water

Paragraphs 90 to 92 of the NWI identify an initial suite of urban water reforms.

COAG work program

At the 29 November 2008 meeting the Council of Australian Governments (COAG) agreed to a work program on water, which includes a range of actions to progress urban water reforms.

The work program provided a renewed approach to national urban water reform and addresses key challenges in urban water.

National Water Initiative pricing principles

The Natural Resource Management Ministerial Council endorsed the National Water Initiative (NWI) pricing principles on 23 April 2010.

The NWI pricing principles provide a set of guidelines or road map for pricing practices and assist jurisdictions to implement the National Water Initiative best practice water pricing commitments in a consistent way.

The NWI pricing principles comprise four sets of principles:

  • recovery of capital expenditure
  • setting urban water tariffs
  • cost recovery for water planning and management activities
  • pricing for recycled water and stormwater reuse.

The final Regulation Impact Statement explains the NWI pricing principles, summarises the stakeholders' comments received in response to the consultation regulation impact statement that was released with the draft NWI pricing principles in October 2009, and provides a response to the comments agreed by state, territory and the Australian governments.

Productivity Commission inquiry into Australia's urban water sector

In 2011, the Productivity Commission undertook a public inquiry into the case for microeconomic reform in Australia's urban water sector (link is external). The inquiry assists COAG's commitment to progress urban water reform by identifying opportunities for efficiency gains in the structural, institutional, regulatory and other arrangements that govern the sector.

Centres of excellence in desalination and water recycling

The Australian Government provided $20 million in funding for a Centre of Excellence in Desalination in Perth and a Centre of Excellence in Water Recycling in Brisbane over 5 years.

Improving water and wastewater services in Indigenous communities

To support the delivery of the COAG Strategy on Water and Wastewater Services in Remote (including Indigenous) Communities, the Australian Government provided $51.7 million in funding through the National Water Security Plan for Cities and Towns to improve water and wastewater services for high priority Indigenous communities identified by the state and territory governments.

National clearing house for urban water

The proposal to establish a national clearing house to facilitate best practice urban water management was investigated by the Australian Government and state and territory governments. The investigation found that information sharing mechanisms are already in place and are facilitating best practice within the urban water industry. Websites run by governments, industry associations and research organisations provide extensive information on urban water management.

A national system for reporting urban water consumption

The Australian Government and state and territory governments considered the proposal for a national system for reporting urban water consumption. The investigation found that work being undertaken by the Bureau of Meteorology and the Australian Bureau of Statistics, combined with other mechanisms, including the Water Efficiency Opportunities program, provide a range of data on urban water use.

Review of water restrictions

A review of water restrictions was completed in 2011—see the NWI parties review of water restrictions report on the National Water Commission archive website.

Demand management

Innovation and capacity building to create water sensitive Australian cities

Harper Review

The 2015 Harper Review provides recommendations to improve competition in the urban water sector.

Stormwater management

The Senate Environment and Communications References Committee completed its inquiry into Stormwater management in Australia in December 2015.

Last reviewed: 20 May 2021
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