Integrated Water Resource Management in Australia: Case studies - National Water Initiative

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Department of the Environment and Heritage, 2004

Integrated Approaches: The National Water Initiative


The Australian environment poses significant challenges in relation to water resource management. Of all the inhabited continents, Australia has the least amount of water in its rivers and twice the flow variation of those of Europe (second only to southern Africa). In addition, the level of development of Australia's water resources ranges from heavily regulated to almost pristine.

We recognise that our freshwater ecosystems provide economic and environmental services crucial to life and well-being. Water, delivered at appropriate times and of suitable quality and quantity, is vital to the ecological health of aquatic, riparian, and terrestrial ecosystems. It is also vital to our towns and cities and is an essential, non-renewable economic resource that underpins much of Australia's economic development.

Past management practices, often guided by inappropriate government policies based on insufficient data, have resulted in: over-allocation of our rivers and aquifers, changed water flows, land clearing, algal blooms, increasing in-stream and dryland salinity, weeds and feral pests — all of which are negatively impacting on the long term sustainability of the environment and our economic development.

Under the Australian constitution management of water is vested with our state and territory governments. However, as water resources often transcend our jurisdictional boundaries, cooperation between governments on water governance arrangements is essential. This has been an issue for us since federation in 1901 and has become a serious priority in the last two decades.

Recognising that action was needed to halt the widespread degradation of our water resources, in February 1994 the Council of Australian Governments, consisting of the Prime Minister, Premiers, Chief Ministers and the President of the Australian Local Government Association, agreed to implement a "strategic framework to achieve an efficient and sustainable water industry".

Some of the key reforms included:

  • identification of stressed rivers and allocation of water for the environment;
  • institutional reform;
  • volumetric pricing of water for full cost recovery;
  • ecologically sustainable water trading;
  • protection of groundwater;
  • water quality management; and
  • public consultation and community education.


Although the framework has resulted in a more sustainable approach to water resource management we accept there is still significant work to be done. During the past two decades we have developed an improved understanding of our surface and groundwater systems, and their management needs. We also realise there are discrepancies in the progress between regions and jurisdictions, questions regarding the legal security of entitlements, difficulties in meeting sustainability objectives in over-allocated systems, and impediments to market operation.


Against this background and in recognition of the need for a national approach to integrated water resource management, in August 2003 the Council of Australian Governments reaffirmed its commitment to implementing the 1994 Water Reform Framework and agreed to develop a National Water Initiative.

The Initiative aims to:

  • increase the security of water access entitlements;
  • encourage the expansion of water markets;
  • enable best practice water pricing;
  • ensure ecosystem health and protect environmental assets;
  • improve monitoring information; and
  • encourage water conservation in our cities.

The Council agreed the Initiative would be detailed in an intergovernmental agreement between all Australian governments. Development of the draft Agreement has advanced to a point where consultation with key stakeholders is occurring. Discussions are currently focussed on the level of specificity needed for each of the key issues.

The Initiative supports the Millennium Declaration 'to stop the unsustainable exploitation of water resources by developing water management strategies at the regional, national and local levels which promote both equitable access and adequate supplies', and the achievement of the World Summit on Sustainable Development 2005 target to address water allocation, protection, supply and distribution.

Lessons Learned

A number of important lessons have been learnt during our reform process, including:

  • integrated water resource management must account for the total water cycle, recognising the connectivity between surface and ground water systems, if it is to ensure security for consumptive users and the environment;
  • integration must address a range of cross-cutting issues such as: large scale impacts of land use on the water-balance of catchments, increased water efficiency, and the impact of upstream activities on downstream water quality and availability;
  • effectively balancing management of the environment and the need for certainty of access for water users is essential for ongoing reform - water users need sufficient certainty and confidence about on-going access to the resource to enable investment, particularly in water efficient technologies and practices;
  • water markets and water trading provide mechanisms for the more efficient use of water. However, we still face impediments to water trading, include the many different types of water access rights regimes that exist between states and regions, and the restrictions placed by water authorities on trading upstream and downstream;
  • continual improvement of data and scientific information is needed to support decisions and actions, although it is likely we will never have all the information we would prefer; and
  • extensive public consultation engaging all stakeholders is essential for effective decision making.
  • the costs of remediation far outweigh the costs of a precautionary approach to development or protection.