Policy and reform in the area of urban water


On 21 September 2015, responsibility for water policy and resources was transferred to the Department of Agriculture and Water Resources - Administrative Arrangement Order made on 21 September 2015.

This website will be updated to reflect these changes.

 Tatnell, Andrew

COAG work program on urban water reforms

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 provides a renewed approach to national urban water reform and addresses key challenges in urban water. The Australian Government together with the states and territories is progressing the urban water actions within the work program.

Progress to date

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. 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.

National Urban Water Planning Principles

Review of the National Urban Water Planning Principles

A review of the 2008 National Urban Water Planning Principles was undertaken by the Department, in consultation with the jurisdictions, during 2013-14 in response to recommendations by the Productivity Commission, the National Water Commission and Infrastructure Australia. 

COAG has adopted the National Urban Water Planning Principles.

The Principles provide Australian governments and water utilities with the tools to better plan the development of urban water and wastewater service delivery in a sustainable and economically efficient manner. Proper planning will facilitate a balance in supply and demand and build community confidence in diverse sources of water supply.

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 will assist jurisdictions to implement the National Water Initiative best practice water pricing commitments in a consistent way.

The NWI pricing principles are comprised of four sets of principles:

  1. recovery of capital expenditure
  2. setting urban water tariffs
  3. cost recovery for water planning and management activities
  4. 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.

Centres of excellence in desalination and water recycling

Hosts for a Centre of Excellence in Desalination in Perth and a Centre of Excellence in Water Recycling in Brisbane have been announced. The Australian Government is providing $20 million in funding for each centre over five 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 is providing $51.7 million in funding through the National Water Security Plan for Cities and Towns to improve water and wastewater services for 17 indigenous communities.

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 will provide data on urban water use.

Review of water restrictions

A review of water restrictions has been completed. The NWI parties review of water restrictions report is available on the National Water Commission website.

NWI urban water reform actions

The National Water Initiative preceeded the COAG urban water reform framework. Paragraphs 90 to 92 of the NWI identify an initial suite of urban water reforms.

Demand management

Innovation and capacity building to create water sensitive Australian cities

History of urban water reform

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

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.