Next Steps in National Water Reform:
Preparation for the Future
A report to the Council of Australian Governments
Standing Council on Environment and Water, 2013
Table of Contents
Context ............................................................................................................................... 1
Rationale ............................................................................................................................. 2
Outcome sought by all governments from water resource management: ...................................... 2
Why do we need national action on water reform? ........................................................................ 2
Key Issues and Actions ......................................................................................................... 3
Build on the success of the past ....................................................................................................... 3
Inform future decisions – further prepare for the challenges of the future ..................................... 5
New Actions ........................................................................................................................ 6
1. National Groundwater Strategic Plan .......................................................................................... 6
2. Improving certainty and security of access to water ................................................................... 7
3. Urban water ................................................................................................................................. 8
4. Integrating water quality and quantity ........................................................................................ 9
5. Improved long term water planning .......................................................................................... 10
6. Water resource development ..................................................................................................... 11
Attachment A: Principles for Water Resource Management ................................................... 12
Attachment B: Glossary ....................................................................................................... 13
National Water Reform Work Plan 2013–2017 ...................................................................... 14
Table 1: Work Commitments.......................................................................................................... 14
Table 2: Existing Reporting Commitments ..................................................................................... 17
Schedule A – Full descriptions of Table 1 Items as listed below ..................................................... 19
Schedule B – Descriptions of existing reporting deliverables (as summarised in Table 2) ............. 22
Next Steps in National Water Reform:
Preparation for the Future
Context
1. The Standing Council on Environment and Water (SCEW) agreed to develop an enhanced water reform
agenda in 2012 in response to key reviews including the National Water Commission’s (NWC) review of
the National Water Initiative (NWI) and the Council of Australian Governments (COAG) review of the
National Water Commission.
2. In April 2012 COAG requested SCEW report by the end of 2012 on the next stage of water reform.
3. This report fulfils that request and constitutes the COAG response to the NWC review of the NWI1 and
Productivity Commission report on Australia's urban water sector2.
4. This report identifies the water issues expected to deliver the greatest benefit from national progression
over the next ten years, and lists actions for addressing these issues over the next five years. It also
identifies significant unfinished business from the National Water Initiative.
5. It has been informed by a range of relevant recent activities, reviews and reports, including:

The NWI and the 2008–2011 COAG work program on water3;

The NWC second Biennial Assessment of the NWI in 2009,4 and the COAG response5;

The NWC Biennial Assessment and Review of the NWI in 20111;

The Productivity Commission report on Australia’s urban water sector;

State based plans for water policy, management and reform;

Cross-jurisdictional discussions by officials, and SCEW and COAG decisions;

The review of the National Water Quality Management Strategy6; and

Other processes relating to water resource management.
1 National
Water Commission (2011a), The National Water Initiative—securing Australia’s water future. Commonwealth of Australia.
2 Productivity
Commission (2011), Australia’s Urban Water Sector. Commonwealth of Australia.
3 http://www.environment.gov.au/water/australia/coag/work-program.html>
(viewed 7 November 2012)
4
National Water Commission (2009), Australian Water Reform 2009: Second biennial assessment of progress in implementation of the National
Water Initiative. Commonwealth of Australia.
5
Council of Australian Governments (2010), Response to National Water Commission Report: “Australian Water Reform 2009, Second Biennial
Assessment of Progress in Implementation of the national Water Initiative”. Approved April 2012,
<http://www.coag.gov.au/sites/default/files/COAG%20urban%20water%20stocktake.doc> (viewed 15 October 2012)
6
Stage one was an evaluation by KPMG: KPMG (2011), Independent evaluation of the National Water Quality Management Strategy – final report.
http://www.environment.gov.au/water/publications/quality/water-quality-final-report.html (viewed 15 October 2012)
1
Rationale
Outcome sought by all governments from water resource management:
6. Water resources are managed efficiently and effectively to improve the wellbeing of Australians.
Why do we need national action on water reform?
7. Water is critical to Australia’s economic prosperity and environmental health, and to Australia’s social
and cultural life. The importance of water to Australia necessitates an integrated water resource
management system which provides for productive water allocation, protects the environment and
caters for complex social and cultural needs in a highly variable system that is likely to be increasingly
impacted by climate change.7 Governments have seen the advantages in national action where there are
benefits from collaboration or cooperation, or to address cross-border issues and shared resources.
8. Governments across Australia have agreed on actions to achieve a more cohesive national approach to
the way Australia manages, measures, plans for, prices, and trades water as a consequence of the 1994
COAG Water Reform Framework and the National Water Initiative, agreed by COAG in 2004. Since 1994
the management of water in Australia has changed profoundly, and Australia is now seen as an
international leader in water resource management.8
9. The implementation of the two COAG agreements varies between locations and jurisdictions to meet
local priorities. Changes have been implemented by all sectors of society – government, industry,
communities and individuals. Within that variability, the essence of the reforms has been given effect:
the NWC states the “NWI has embedded into water management across Australia the imperative to
manage water resources sustainably, to articulate environmental objectives more clearly, and to use
best available science in decision making.”9 Water markets have matured and now produce economic
benefits.
10. Further significant changes have come from the Commonwealth Water Act 2007, including its
requirement to develop a whole of basin plan for the Murray-Darling Basin. The significant work by Basin
governments to implement Murray-Darling Basin reforms is not within the remit of the SCEW, and is
therefore not included in this report.
11. Supported by initiatives such as the Water Efficiency Labelling and Standards scheme and the installation
of meters, householders are making more informed decisions on their water use. Residential water
consumption has declined across Australia, accelerated by water restrictions and the recent drought.
Water pricing structures are now more in line with efficient pricing approaches, and recycled
wastewater and stormwater are increasingly replacing the use of potable water in areas such as toilets,
parks and gardens.
12. Rural Australians, particularly irrigators, have considerably greater flexibility in managing water as part
of their business as a result of separating water from land and the emergence and deepening of water
markets. This was evident during the recent drought within the Murray-Darling Basin where water
markets became an even more important tool for managing business risks associated with shortages of
water as well as allowing water to be obtained by government to meet environmental objectives. The
planning framework has enhanced the recognition of environmental and other public benefit outcomes,
and there are now significant environmental water holdings, particularly in the Murray-Darling Basin.
7
CSIRO (2010), Climate variability and change in south-eastern Australia: A synthesis of findings from Phase 1 of the South Eastern Australian Climate
Initiative (SEACI). CSIRO Australia.
8
Organisation for Economic Co-operation and Development (2012), Meeting the Water Reform Challenge, OECD Studies on Water, OECD Publishing.[
“...some countries have been at the cutting edge of water policy innovation and have developed sophisticated policy frameworks to address water
challenges. Australia, for example, has had a long period of water policy reform and has implemented mechanisms such as water markets, water
pricing, and government purchase of water entitlements for environmental flows”]
9
National Water Commission (2011a), op. cit.
2
NEXT STEPS IN NATIONAL WATER REFORM : PREPARATION FOR THE FUTURE
13. However, in its comprehensive review of the NWI,10 the NWC noted that despite significant progress,
the available benefits of water reform have not been fully achieved. It also made recommendations on
maturing the agenda and addressing emerging and future issues. Similarly the COAG review of the
NWC11 noted that “the full benefits of those initiatives [already implemented] require further elements
of the NWI to be put in place” and that “several of the key reforms have not yet been implemented
because they have proven to be technically and politically difficult and demanding of scarce resources.”
14. It is timely to consider the outcomes of recent reviews, the likely impact of existing initiatives and of
future challenges, and make recommendations for national action based on principles for good water
management (Attachment A).
15. Given the significant ongoing reforms, including in the Murray-Darling Basin, this report proposes
efficient, cost-effective actions over the next five years to supplement the existing agreed policy reform
agenda. The new actions aim to respond to the key challenges for progressing national water resource
management over the next ten years.
Key Issues and Actions
16. In considering the context of water reform, it is important to acknowledge the matters underpinning the
delivery of water management by governments, to identify opportunities to build on the success of the
past, and to identify the key challenges of the future.
17. All governments continue to explore improvement in service delivery and underpinning actions that are
not specifically in the purview of this national report. These include building skills and capabilities,
improving governance, continued adequate resourcing, and communicating and consulting on water
resource management.
18. Further, the successful and timely delivery of key programs currently under way, such as the National
Water Market System, are critical enablers to planned significant improvements and implementation of
agreed reforms.
Build on the success of the past
19. Progressive COAG agreements have established a comprehensive water management framework in
Australia, primarily based on the National Water Initiative (NWI).
20. All governments consider the NWI remains relevant to the management of water resources. The NWI’s
planning, entitlement and market framework transparently balances the competing demands on water
in rural regions using a defined consumptive pool and statutory recognition of environmental water, and
enables efficient water trading. The pricing and institutional reforms have been beneficial: there have
been improvements in governments’ transparency and accountability, and water businesses are
generally now able to understand and factor in the cost of water and to fund new investment because of
greater certainty and security.12
21. Progress in implementing the framework has in some cases highlighted gaps in the framework or
opportunities for improvement: initiatives to address such gaps and opportunities include the National
Water Market System and the National Framework for Compliance and Enforcement Systems for Water
Resource Management, both of which are part of the ongoing reform activities. Recently agreed
platforms to increase collaboration, efficiency and effectiveness include the National Hydrologic
Modelling Platform and the National Water Knowledge and Research Platform — these will continue to
be implemented over the next five years.
10
National Water Commission (2011a), op. cit.
11 Rosalky,
D. (2011), COAG Review of the National Water Commission. Commonwealth of Australia.
<http://www.environment.gov.au/water/australia/nwi/pubs/coag-review-national-water-commission.pdf> (viewed 15 October 2012)
12
National Water Commission (2011a), op. cit.
NEXT STEPS IN NATIONAL WATER REFORM : PREPARATION FOR THE FUTURE
3
22. In some cases agreement has been reached on further development of the framework, but full
implementation of the new action is not yet complete. An example is in accounting and measuring of
water use, where there is still monitoring required of both the implementation of the National
Framework for Non-Urban Water Metering, and the development of methods for estimating rural water
use.
23. One of the remaining elements needed for successful implementation of the NWI is the further
development and implementation of water plans that, among other matters, identify pathways to
sustainable use, and are sufficiently resilient to accommodate the broad range of climate change
outcomes.13 COAG has agreed14 to a biennial National Water Planning Report Card, reporting progress
with the development and implementation of water plans in all water resource systems with reference
to the NWI Policy Guidelines for Water Planning and Management (Planning Guidelines). COAG also
agreed to develop and implement a framework to improve understanding of water resource condition,
availability and use, reporting biennially on those systems at risk of unsustainable use.
24. Given the long timeline of water plans, these reporting initiatives need time to take effect, and there is
merit in considering a review of effectiveness when developing the next five-year work plan. As the
impact of interception on the integrity of water entitlements is also not yet fully understood or
incorporated into water resource management, a review of the effectiveness of existing tools and
policies in managing interception should also be considered at that time.
25. There are two other identified issues of priority ’unfinished business’. The first, improving water
planning to better recognise Indigenous needs in relation to water access and management, will be
supported by the COAG decision to develop guidance under the Planning Guidelines to address the need
to better engage Indigenous people in water planning.15 The second, fully implementing the NWI in
recognising and managing the connectivity between groundwater and surface water, will be progressed
through a national groundwater strategic plan (new action 1).
26. Further opportunities arise to build on the success of the existing entitlements framework. It is timely to
explore addressing new types of water products where there is insufficient clarity on water rights or
entitlements, such as for stormwater and wastewater, water sourced from managed aquifer recharge,
and temporarily available water such as that co-produced from extractive industries (new action 2).
27. In urban water, national initiatives such as Water Efficiency Labelling and Standards scheme and water
quality guidelines for recycled water and stormwater have supported efficient water use. Guidance has
also been provided through the development of urban water planning principles, the NWI pricing
principles and the 2011 Productivity Commission report which examined the case for further reform in
the urban water sector. The Productivity Commission16 and the NWC17 recognised that the drought,
population growth, climate variability, climate change, and ageing infrastructure placed considerable
pressures on the sector and identified opportunities for further institutional and regulatory reform,
through nationally coordinated action and by jurisdictions alone. New action 3 describes an urban water
program informed by these reports.
28. Water management is intricately linked with land and natural resource management. Environmental,
social and economic outcomes are best achieved when the disparate land and water planning and
management regimes complement each other, while disjunct management can lead to perverse
outcomes. Further consideration needs to be given to better linkages between planning regimes. As a
13 National
Water Commission (2009), Australian Water Reform 2009 – Second Biennial Assessment of Progress in Implementing the National Water
Initiative
14 Council
15
of Australian Governments (2010), op. cit.
Council of Australian Governments (2010), op. cit.
16 Productivity
17
4
Commission (2011), op. cit.
National Water Commission (2011b), Urban water in Australia: future directions. Commonwealth of Australia.
NEXT STEPS IN NATIONAL WATER REFORM : PREPARATION FOR THE FUTURE
first step it is proposed that greater linkages are established between the water quality framework and
water quantity management (new action 4).
Inform future decisions – further prepare for the challenges of the future
29. Significant challenges to water management can be expected in the medium to long term. Two key long
term challenges have been identified: climate change and increased likelihood or severity of climate
extremes such as droughts, storms or floods, and growth in water demand arising from a range of
sources including population growth and economic development.
30. In thinking about managing for greater climate variability there will be considerable value in reviewing
the lessons learnt in the recent droughts and floods once there are formal responses to existing reviews
(including of the recent floods).
31. The OECD18 predicts in its baseline scenario that global water demand will increase by 55% by 2050.
Potential future impacts on water resource management in Australia include: a projected population of
nearly 26 million by 202019; internal migration; likely increased impacts of climate change and extreme
weather events; climate change, and associated mitigation and adaptation activities; increased input
costs to business and agriculture, especially for energy; and increased global demand for food and fibre
with smaller inputs. Water resource management is also intricately linked with the extraction of fossil
fuels, the generation of energy, industry needs, health, and social and cultural amenity.
32. The interlinking of all of these issues requires greater coordination across sectors, and a new way of
working. As a first step it is proposed to provide guidance on planning for climate change and climatic
extremes, and review the likely future impacts on water supply and demand (new action 5).
33. As a consequence of growth and development, there will be continued need to improve the efficiency of
both rural and urban water use, to build water-sensitive urban areas, to fund new developments and
existing infrastructure adequately, and to sustainably develop water resources (new action 6).
34. The new actions to address the key issues above have been scoped in some detail below.
Implementation will be overseen by the SCEW, including the development of a comprehensive
implementation plan, and recommendations for a further five year work plan developed in 2017, based
on the outcomes of this work plan.
18
Organisation for Economic Co-operation and Development (2012), OECD Environmental Outlook to 2050: the Consequences of Inaction, OECD
Publishing.
19
The Treasury (2010), Australia to 2050: future challenges. The 2010 Intergenerational report. Commonwealth of Australia.
<http://archive.treasury.gov.au/igr/igr2010/Overview/pdf/IGR_2010_Overview.pdf> (viewed 9 October 2012)
NEXT STEPS IN NATIONAL WATER REFORM : PREPARATION FOR THE FUTURE
5
New Actions
1. National Groundwater Strategic Plan
Objective
To further groundwater management by developing and implementing a National Groundwater Strategic
Plan.
Context
An estimate widely accepted by scientists and policymakers is that groundwater now directly supplies close
to 30% of Australia’s total water needs – more than double this in south west Western Australia20. The
national figure may exceed 50% when factoring in the significant base flow contribution to surface water
systems. Over the next 40–50 years the need for fresh water will intensify as Australia’s population doubles.
This is a major challenge because existing groundwater resources were often laid down in wetter climates
and are now experiencing much lower rates of replenishment.
The draft National Groundwater Strategic Plan identifies six strategic priorities to improve groundwater
management and information:

Water planning and management

Legislation and governance

Monitoring and compliance

Skills development and capacity building

Groundwater information and dissemination

Research and development
What will be done
1.1 National Groundwater Strategic Plan presented to SCEW by the end of 2013 as a blueprint to improve
groundwater management in Australia.
1.2 All jurisdictions agree to an action plan for the National Groundwater Strategic Plan by 2014, consistent
with the NWI Policy Guidelines for Water Planning and Management, containing measures as defined in
the National Groundwater Strategic Plan.
Responsibility
All jurisdictions.
Monitoring or review strategy

Reporting to SCEW on progress against the National Groundwater Strategic Plan.

All jurisdictions review the National Groundwater Strategic Plan in 2018.
This preliminary description has been provided in advance of finalisation of the National Groundwater
Strategic Plan. Any changes to the priorities in the final version will take precedence.
20
6
CSIRO (2009). Water yields and demands in south-west Western Australia. A report of the South-West Western Australia Sustainable Yields Project.
NEXT STEPS IN NATIONAL WATER REFORM : PREPARATION FOR THE FUTURE
2. Improving certainty and security of access to water
Objective
To explore the costs and benefits of improving certainty and security of access to sources of water where
rights are not explicitly defined within the existing water access and entitlement framework (i.e. for new and
alternative sources of water such as reuse, recycling, stormwater etc).
Context
Rights to water if defined clearly can promote gains from trade and provide a level of security to users.
Rights and responsibilities are involved in any arrangements that provide a level of certainty and consistency
surrounding the terms and conditions about how users access water resources.
As the supply and demand for water within Australia changes over time, available benefits from further
water rights reforms are likely to increase. This may involve clarification, formalisation or strengthening of
existing rights as well as the creation of new rights – for different water sources or in relation to capacity
constraints. This process will require careful consideration to ensure there are no unintended impacts, for
example on informal customary use.
Water rights development and reform will be more effective if undertaken through established frameworks.
Consideration should also be given to the costs and benefits of better defining existing rights and
establishing or clarifying frameworks and decision processes for rights to (but not limited to) stormwater,
wastewater, water from managed aquifer recharge, and co-produced water.
What will be done
2.1 Investigate the costs and benefits of a nationally consistent framework and decision matrix for further
defining and developing rights to water which allows for the efficient and effective use of water within a
potential water resource. The investigation should include a number of case studies which align with
priority areas.
2.2 In considering the need for development of a framework and decision matrix for further defining water
rights within potential water resources, attention should be focussed on, but not limited to:
a) the flow-on consequences to explicit and implicit rights if rights in water are further defined or new
rights created; and
b) how further defining or creating new rights align with current water management and planning
frameworks.
2.3 Make recommendations to SCEW in 2015 on how best to progress actions to increase certainty and
security of access to water not explicitly defined within the existing water access and entitlement
framework.
Responsibility
All jurisdictions.
Monitoring or review strategy
If agreed, the framework should be reviewed five years after finalisation.
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7
3. Urban water
Objective
To provide evidence to inform future national urban water reform initiatives that support secure, safe,
healthy and reliable water-related services and which meet community needs in an efficient and sustainable
manner.
Context
The Productivity Commission21 found a strong case for reform to improve the efficient provision of water,
wastewater and stormwater services in its report on the urban water sector in 2011. This was broadly
consistent with the NWC22 findings that the effects of drought, urbanisation and ageing assets warrant
improvements in the institutional and regulatory arrangements in the sector. The urban water work program
has been informed by these reports.
As previously agreed by COAG, the review of the National Water Initiative pricing principles will be
undertaken. The scope of this review could address some of the pricing issues identified by the Productivity
Commission, such as: pricing the scarcity value of water; the valuation and recovery of environmental
externalities; the feasibility of multiple customer tariff options; costs and benefits of postage stamp pricing;
and sewerage and trade-waste pricing. Based on recommendations that further work was needed to build
the capacity and expertise in adaptive planning in the sector, the 2008 National Urban Water Planning
Principles will also be reviewed. The review will assess the extent of implementation and the effect on urban
water planning decisions by utilities and local governments and the role of the principles in advancing new
approaches to planning, such as adaptive management planning and integrated urban water management.
The development of the strategic direction of the National Water Quality Management Strategy will be
completed in 2013 and will provide the opportunity to respond to recent reports on the variability of water
quality in smaller towns and remote communities. Recommendations for new initiatives may be included in
regular revisions to the Australian Drinking Water Guidelines.
Recognising governments’ involvement in practical urban water research and analysis, the work plan
includes a commitment to share the outcomes of this work which includes: analysis of tariff options; the use
of allocation mechanisms in supporting investment in alternate water sources; and findings from the
recently established Cooperative Research Centre for Water Sensitive Cities. Finally, the Productivity
Commission found that the scheduled independent review of the National Access Regime should proceed.
The twelve-month inquiry was announced on 25 October 2012.
What will be done
3.1 Review the National Water Initiative pricing principles by end 2014.
3.2 Review the National Urban Water Planning Principles by end 2014.
3.3 Promote awareness of the outcomes of research and analysis of urban water issues across governments
through existing forums.
Responsibility
All jurisdictions.
Monitoring or review strategy
NWC to monitor progress through its triennial assessments.
21
Productivity Commission (2011), op. cit.
22
National Water Commission (2011b), op. cit.
8
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4. Integrating water quality and quantity
Objective
Better integration between water quality and quantity in planning, management and regulation frameworks
to achieve improved environmental, economic and social outcomes.
Context
Water quantity and quality management actions affect each other and common outcomes. Changes in the
quality or quantity of water may result in changes in the structure and function of ecosystems including the
numbers and types of organisms that can survive in the altered environment. It can equally affect other
environmental and water use values such as drinking water quality, primary industries, recreational,
aesthetic, and cultural and spiritual values.
While the National Water Quality Management Strategy (NWQMS) is described as complementary to the
NWI, in practice the two largely operate as separate frameworks. The outcomes sought under both
frameworks could be more effectively achieved if implementation of each framework were better
integrated. Improving the integration of policy settings addressing water quality and water quantity issues is
a key consideration in the current review of the NWQMS.
The NWQMS was jointly developed and agreed in the early 1990s to provide a national approach for
achieving sustainable use of the nation’s water resources by protecting and enhancing water quality, while
maintaining economic and social development. The review involves all jurisdictions in considering the
strategic directions of the NWQMS. Specific actions are proposed in relation to policy setting, governance
arrangements, guidance material and monitoring and evaluation.
What will be done
Assist the integration of water quality and quantity in water management planning by:
4.1 Revising the strategic directions of the NWQMS by end 2013. Proposed subsequent actions include:
a) revising the policy setting for the NWQMS in line with developments in water reform and including a
focus on the integration of water quality and quantity planning;
b) resetting governance arrangements for NWQMS management;
c) rationalising guidance material (including on better integration of water quality and quantity); and
d) developing appropriate monitoring and evaluation metrics.
4.2 Based on the outcomes from the revised NWQMS policy settings (once agreed), make recommendations
by end 2016 as to whether the preparation of a module to the NWI Policy Guidelines for Water Planning
and Management is required to assist in the integration of water quality and water quantity planning
and management.
Responsibility
All jurisdictions (including, for fresh and marine water quality guidelines, New Zealand).
Monitoring or review strategy
Progress to be monitored by officials reporting to the SCEW through ongoing oversight of NWQMS reform.
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9
5. Improved long term water planning
Objective
To ensure water resource decision makers are better equipped to plan for likely long term impacts on water
supply and demand, including identifying areas of critical balance between supply and demand.
Context
Supply and demand of water, energy and food are fundamentally linked. While projections have been
developed at local and regional scales, the likely long term demand for water resources, including as a result
of future changes in climate, population and industry requirements, is a key gap in understanding for
developing effective national water policy. Recent reports23 highlight the need for integrated policy
approaches, noting that attempts to address problems in one area without regard for implications elsewhere
can have unintended negative consequences.
Fully understanding projected water supplies, including dealing with uncertainty around climate change and
climate extremes such as droughts and floods, requires a risk management approach. For a 1°C warming
(median warming by 2030 relative to 1990), river flows in far south-western and south-eastern Australia are
likely to decline by 5–30% (30–50% under the driest projections). In areas exposed to cyclones and storm
surges the current 1-in-100 year event could occur several times a year.24
What will be done
5.1 Prepare a module to the NWI Policy Guidelines for Water Planning and Management by end 2014 to
take account of the likely impact of climate change and extreme events within planning frameworks and
water plans.
5.2 Report to SCEW by end 2014 on existing information available to help define expected impacts on water
supply and demand across sectors (e.g. agriculture, energy generation, extractive industries, population,
industry, and climate change mitigation and adaptation actions) and relevant Commonwealth and state
or territory policies and planning instruments with potential to affect future water supply and demand.
5.3 Water supply and demand projections
a) Provide a scoping report and methodology, for SCEW endorsement by end 2015, for the
development of nationally-consistent, integrated water supply and demand projections (up to
50 years ahead), taking into account existing state and international approaches;
b) If agreed by SCEW, produce the projections by 2017; and
c) Report to SCEW by end 2017 on high risk demand and supply issues with recommendations for
action, including to address any significant gaps in understanding of likely future demand on water
resources and identifying any constraints to closing the gap between supply and demand projections.
Responsibility
All jurisdictions.
Monitoring or review strategy
Public reporting on new action 5.1 through the National Water Planning Report Card.
23 PMSEIC
(2010), Challenges at Energy-Water-Carbon Intersections. Prime Minister’s Science, Engineering and Innovation Council, Canberra, Australia.
+ State of the Environment 2011 Committee (2011), Australia state of the environment 2011. Independent report to the Australian Government
Minister for Sustainability, Environment, Water, Population and Communities. Canberra: Commonwealth of Australia.
+ OECD (2012a), A Framework for Financing Water Resources Management. OECD Studies on Water, OECD Publishing.
+ OECD (2012b), OECD Environmental Outlook to 2050: The Consequences of Inaction. OECD Publishing.
24
Keenan, T.D. and Cleugh, H.A. (eds) (2011), Climate Science Update: A Report to the 2011 Garnaut Review. Centre for Australian Weather and
Climate Research Technical Report No. 036. CSIRO and Bureau of Meteorology.
10
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6. Water resource development
Objective
To inform decisions on the development of water resources based on the consistent application of agreed
principles.
Context
Much of the reform effort to date has focussed on planning, management and establishment of markets for
water resources that have already been developed. The same framework can inform the sustainable
development of water where there are opportunities to increase water supply to meet growing demand.
The expected growth in demand for water will need to be met through a range of approaches, including in
part identifying and developing “new” water products, and identifying development opportunities in more
traditional water resources. It is timely to focus effort on considering common principles and the benefits of
a national framework to support decision-making on appropriate and sustainable development of water.
Decisions to develop water resources should be based on sound policy principles and underpinned by robust
information to ensure environmental, economic and social sustainability. Using this approach, water
planning enables resource development opportunities to be identified by establishing the availability of
water for irrigation, town water supply and other purposes.
What will be done
6.1 Develop a scoping study for a framework for guiding decisions on water resource development
proposals, with timelines and costs, for SCEW by end 2014.
6.2 Subject to the outcomes of new action 6.1 and approval of a scope, develop a national framework to be
considered during the decision-making process on water resource development proposals for SCEW
endorsement by 2017. The framework would:
a) draw on relevant existing principles, frameworks, guidelines and methods; and
b) be developed with reference to work on defining rights to water, including for new products.
Responsibility
All jurisdictions.
Monitoring or review strategy
The framework should be reviewed five years after finalisation.
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Attachment A: Principles for Water Resource Management
The principles for continued water resource management in Australia remain relatively unchanged from
those that drove the 1994 COAG Water Reform Framework and the 2004 National Water Initiative.
The principles are:
12

Sustainability and wellbeing. Wellbeing includes economic prosperity, community liveability and
environmental integrity: water management should contribute to the aim of enhancing the
wellbeing of society over time;

Management. Water is managed on a whole-of-cycle and whole-of-catchment (or aquifer) basis,
including conjunctive management of surface and groundwater;

Measurement. Investment in appropriate information, science (including socio-economic),
monitoring and evaluation to inform adaptive management by all sectors;

Planning. Water planning results in transparent resource allocation, including clear property rights
and water allocation based on a clearly defined consumptive pool;

Pricing. Water is priced to ensure sufficient revenue streams to allow efficient delivery of the
required services, user pays and cost recovery, and with transparently funded community service
obligations where needed;

Markets. Facilitation of trading in rights to water where water resources are physically shared or
hydrologic connections and water supply considerations permit, to enable water to move to its
highest value use;

Consultation, transparency and accountability. Governments are accountable to communities,
reporting responsibilities are clear and communities are consulted in key decisions;

Value for money. Actions are prioritised to those which are most cost-effective and which most
benefit Australia’s wellbeing;

Use of best available evidence. Best available information on long and short term outcomes is used
in making decisions; and

Risk-management based. Application of the water management framework includes assessment
and management of the risks.
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Attachment B: Glossary
The terms in this document are defined by those in the NWI Policy Guidelines for Water Planning and
Management.
Consumptive pool is the portion of the total resource that may be made available for consumptive use at a
given time or during a defined planning period, either through water access entitlements or other statutory
rights (for example, stock and domestic use, fixed term water licences) or unregulated use such as some
interception activities.
Environmental and other public benefit outcomes that are specified in water plans may include a number of
aspects such as:
 environmental outcomes: the maintenance of key environmental assets and key ecosystem services and
functions (such as biodiversity and water quality)

other public benefits: mitigating pollution, public health (for example, by limiting noxious algal blooms),
Indigenous and cultural values, recreation, fisheries, tourism, navigation and amenity values.
Sustainable water extraction regime is the level of water extraction allowable in a particular water resource
(including the volume, timing, location and management of flows and extraction) that ensures that the
environmental and other public benefit outcomes as well as critical human needs, defined in approved water
plans can be met at a specified level of risk.
Overallocation refers to situations where, with allowable full development of water access entitlements and
all other forms of authorised25 use in a particular system, the total volume of water allowed to be extracted
by entitlement holders and other authorised users at a given time exceeds the sustainable water extraction
regime for that system.
Overuse refers to situations where the total volume of water actually extracted in a particular system at a
given time exceeds the sustainable water extraction regime for that system.
25
An authorised use is any water use that is allowed through statutory rights and includes uses specifically excluded from licensing systems.
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13
National Water Reform Work Plan 2013–2017
Table 1: Work Commitments
The following items include the new actions and previous commitments arising from Ministers’ agreements
(including the COAG Response to the 2009 Biennial Assessment of the NWI and the COAG 2008–2011 Work
program on water).
Item
Sustainable management
Fully implement commitments for
NWI-compliant water planning
1
2
Fully implement the interception
commitments in the NWI
Responsibility
for delivery
Matters for further
progression/next steps
Expected
delivery
date
All states and
territories
NWC’s Biennial Report Card
and Triennial NWI
assessments will inform and
assist progress.
Ongoing
All states and
territories
Consider adequacy of
progress and
recommendations for
progression in next five-year
plan
Absence of tools and
information remains a barrier.
Existing work will assist.
A review of progress in
addressing interception would
support implementation.
Ongoing
Proposed
for next
five-year
work plan
As soon as
possible
3
Use best endeavours to introduce and
pass legislation to enable
implementation of NWI-consistent
water access entitlements (NT and
WA) and water planning (WA). (Refer
Schedule A for full text)
NT & WA
4
Identify and report on water systems
where use is in excess of sustainable
water extraction regimes. (Refer
Schedule A for full text)
All jurisdictions
2015 and
biennially
thereafter
5
Develop enhancements to the NWI
Policy Guidelines for Water Planning
and Management26 (Refer Schedule A
for full text) prioritising:
a) taking account of climate change
and variability within plans
b) engaging indigenous people in
water planning
All jurisdictions
Ongoing
26
Note potential additional module on integrating water quality and quantity under action 16
14
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End 2014
End 2014
6
Item
Responsibility
for delivery
a) Develop a national groundwater
strategic plan
All jurisdictions
Matters for further
progression/next steps
End 2013
b) Develop action plan for further
implementation
7
Water resource development
Expected
delivery
date
2014
All jurisdictions
Develop an agreed national decision
framework:
SCEW approval of scope a)
a) Scoping report
b) Framework and recommendations
8
9
Markets
Complete the National Water Market
System (NWMS)
End 2014
End 2017
All jurisdictions
Address stakeholder concerns
All jurisdictions
regarding water market intermediaries
10
The Commonwealth, Victorian, South
Australian and New South Wales
Governments will work collaboratively
to develop practical measures to
overcome impediments to the
consistent application of the four per
cent cap and a staged increase in the
limit.27
Commonwealth,
Victoria, SA &
NSW
11
Improving certainty and security of
access
All jurisdictions
2015
COAG consultation Regulatory
Impact Statement (RIS) to
seek views from stakeholders
on options
Mid 2013
COAG decision on preferred
option
For the MDB, Basin Plan
trading rules (commencing
1 July 2014) include a
provision allowing trade free
of volumetric limits
Mid 2014
Develop the framework if
agreed by SCEW
2015
2014
Investigate costs and benefits and
make recommendations on
developing an overarching framework
and decision matrix for new water
rights.
27 All
jurisdictions to abide by their NWI commitment to not implement new barriers to water trade (COAG response to 2009 Biennial Assessment of
the NWI)
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Item
Urban Water 28
Review the NWI Pricing Principles
12
Responsibility
for delivery
Matters for further
progression/next steps
Expected
delivery
date
All jurisdictions
Respond to recommendations
as agreed by SCEW
2014
Respond to recommendations
as agreed by SCEW
2014
13
Review the National Urban Water
Planning Principles
All jurisdictions
14
Promote awareness of the outcomes
of research and analysis of urban
water issues.
Improving Integration
a) Report on existing information on
future supply and demand
All jurisdictions
2015
All jurisdictions
End 2014
15
b) Provide a scoping report and
method for water supply and
demand projections
End 2015
c) Produce the projections, if agreed
End 2017
d) Report on high risk demand and
supply issues with
recommendations for action
16
Integrating water quality and quantity
management.
a) Revise policy documents of the
National Water Quality
Management Strategy (NWQMS)
End 2017
All jurisdictions
End 2013
b) If needed, produce a module to the
Planning Guidelines
2016
Water Information and Capacity Building
Continued implementation of the
All jurisdictions
National Framework for Non Urban
Water Metering
17
Regular reporting on progress
would assist ongoing
improvement
18
Estimation of rural water use
(Refer Schedule A for full text)
All parties –
BoM to lead
2015
19
Implementation of the National Water
Knowledge and Research Platform
All jurisdictions
2013
28
Full text for the urban water work plan is at Schedule A
16
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Table 2: Existing Reporting Commitments
The following reporting commitments are ongoing and arise from Ministers’ agreements (including the
COAG Response to the 2009 Biennial Assessment of the NWI and the COAG 2008–2011 Work program on
water).
R1
R2
R3
R4
Reporting deliverable
Report on the implementation of the
Interception Framework in the Planning
Guidelines, including:

interception risk assessments in all
catchments and aquifers in order of
priority

implementation of necessary
measures to maintain interception
activities below identified threshold
levels, or to offset impacts above
threshold levels
Conduct risk assessments for priority
groundwater management areas and
publicly report progress on this work on a
biennial basis
Report publicly on the planning and
management status of groundwater
systems on a biennial basis
Publicly identify environmental water
management arrangements, specify

the authority and accountabilities of
entities responsible for managing
environmental water

publish annual reports accounting for
their management of environmental
water including outcomes achieved
Publish information on how the risk
assignment provisions of the NWI will be
implemented.

R5
Responsibility
All states and
territories
Reporting period Reporting to
Biennial
Public release
All states and
territories
Biennial
Public release
All jurisdictions
Annual (to be
published within
six months of the
close of each
water year)
Public release
All jurisdictions
2012
Public release
National Water
Commission
Biennially, next
due 2013
Public release
Originally agreed to be ‘within 16
weeks of proposed Basin Plan
release’ – A report on progress in
2013 would support implementation.
Continue to publish the National Water
Planning Report Card
(Refer Schedule B for full text)
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Reporting deliverable
Extend mandatory reporting outside the
MDB, on price and volumes for all trades
of entitlements and allocations (Refer
Schedule B)
Responsibility
All states and
territories
Reporting period Reporting to
From 2015
Public release
R7
Service standards for trade approval time
for non-MDB jurisdictions – work towards
meeting agreed service standards
Northern Territory,
Tasmania and
Western Australia
Ongoing
Public release
R8
Jurisdictions to develop and publish
schedules for the priority completion of
NWI-consistent entitlement reform,
consistent with the Planning Guidelines.
All states and
territories
Ongoing
Public release
R6
Schedules will include timeframes for
unbundling water entitlements from land
and into their constituent parts on a
priority catchment/area basis, where this
is feasible and beneficial.
18

Where decisions are made
against further unbundling, the
reasons for this should be made
public;

Where fixed-term or other types
of entitlements are demonstrably
necessary, jurisdictions articulate
why and where such
arrangements are to be made.
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Schedule A – Full descriptions of Table 1 Items as listed below
This schedule provides further detail for certain work plan items, as indicated in Table 1. Boxed elements are
verbatim extracts from COAG’s response to the NWC’s 2009 Biennial Assessment of the NWI.
Item 3: Use best endeavours to introduce and pass legislation to enable implementation of NWIconsistent water access entitlements (NT and WA) and water planning (WA).
Western Australia and the Northern Territory to use best endeavours to introduce and pass legislation to
enable the implementation of NWI-consistent water access entitlements (and water planning in Western
Australia) by the end of 2010 or as soon as possible thereafter.
Three actions from the 2008–11 COAG work program on water also relate to Item 3 and are ongoing:
Action A7: Where necessary, ensure legislation is capable of implementing the provisions of the agreed
[planning] guidelines, including:
a) requiring that future significant water intercepting activities are compliant with relevant water resource
plans; and
b) providing for proponents of significant future water intercepting activities, or relevant third parties, to
hold offsetting water access entitlements.
Action A9: Implement the following approach to the planning and management of groundwater:
a) adoption of NWI-consistent water access entitlements in actively managed groundwater systems (i.e.
those with a medium or higher risk category) while recognising that it may be appropriate in those
systems for some extraction such as stock and domestic use to continue as statutory authorisations;
b) note that an outcome of the risk-based approach to planning and management is that low risk systems
may not require fully specified water access entitlements;
c) recognition that in systems with little or no recharge, entitlements should be for a fixed term or other
appropriate forms (consistent with NWI clause 33), and that transparent social and economic decisions
should be made through planning processes to determine the rate and period over which resource
depletion will be allowed, and the uses that this limited water can be used; and
d) all significant uses of groundwater outside of the water access entitlements system should be
assessed and accounted for as part of the water budget.
Action A11: Adopt regulatory mechanisms to ensure that:
a) the impacts of activities outside the water entitlement system which may interfere with the integrity of
an aquifer (for example: drilling or excavation), are understood prior to approval; and
b) arrangements are in place to ensure that the legitimate water access rights of existing water users are
protected.
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Item 4: Identify and report on water systems where use is in excess of sustainable water extraction
regimes.
To improve understanding and promote transparency of groundwater and surface water system condition,
resource availability, extraction and environmental water requirements:
a) Develop and agree, within twelve months of agreement by COAG,29 a framework for the identification of
water systems where use is in excess of sustainable water extraction regimes30 or, where a plan is not in
place, at potential risk thereof.31 32 33
b) Within twelve months of finalising the framework in 2(a), the Commonwealth to undertake and publish
a reliable peer-reviewed risk assessment against the framework for every water plan area (or water
system where a plan is not in place), based on available information.34 The risk assessment will be
updated biennially.
c) For those systems outside the MDB35 identified as having use in excess of sustainable water extraction
regimes or at potential risk thereof, within six months of the publication of the risk assessment above:
- each State and Territory to report to WRC on steps being taken to ensure that there are no additional
water rights issued until an effective water plan or other necessary measures are in place, including
those that may be provided for in existing water plans;36
- each State and Territory to publish a timetable for returning those systems to within their sustainable
water extraction regimes; and
- the above reports to be in a common format allowing compilation into a national timetable and report
to be published by the WRC.
Item 5: Develop enhancements to the NWI Policy Guidelines for Water Planning and Management.
Development of additional tools, methodologies, modules, or case studies for the Planning Guidelines by the
end of 2011 to address the need to:
- take account of likely climate change within plans;
- measure and establish thresholds for surface and groundwater connectivity;
- manage interception by plantations and by stock and domestic use;
- develop best practice guidance on environmental water planning, management (including
environmental water shepherding) and monitoring;
- support the delivery of environmental water at all priority assets to ensure the best possible
environmental outcomes can be achieved by developing complementary (or aligning existing) NRM plans
and activities at the asset location; and
- engage Indigenous people in water planning
29 All
jurisdictions agree to settle the framework by the end of 2011.
30 The
sustainable water extraction regime is determined through the water resource planning process in accordance with the Planning Guidelines.
31 The
framework will draw on the risk module under the Planning Guidelines where relevant. At a minimum and for each water system, the
framework should allow assessment and reporting on: (i) whether or not a water plan is in place and risk assessments undertaken by jurisdictions in
reaching judgements about whether a plan is required; (ii) the system water balance; (iii) ecological assets within the system (identified in both the
corresponding water plan and through other means such as application of the HCVAE framework); (iv) environmental water requirements; and (v)
system condition.
32
The framework methodology will take into account the sustainable diversion limits set by the Basin Plan when assessing systems in the MDB.
33 The
development of the framework, and the assessment against it, will be funded by the Commonwealth. All jurisdictions will provide relevant data
at their own cost.
34 Risk
assessments undertaken under the Water Management Partnership Agreements and the 2008–2011 COAG Work Program on Water (item 8,
identified groundwater systems) will be used to inform assessments.
35
It is assumed that the Basin Plan will deal with ‘overuse’. This action builds on water management partnership agreements in the MDB.
36
Nothing here suggests that a water plan must be amended.
20
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Urban Water Work Plan: Items 12–14, 16a in part
Pricing and planning for safe and sustainable water management
12. Review the NWI pricing principles. This review may cover the scarcity value of water, the valuation and
recovery of environmental externalities, the feasibility of multiple customer tariff options and the
broader costs and benefits of postage stamp pricing. The review should consider principles for sewerage
and trade waste pricing. This activity would be subject to scoping the review and establishing terms of
reference.
13. Review the National Urban Water Planning Principles to assess the uptake of the planning principles and
opportunities for improvements. This includes assessing and making recommendations for
improvements on:
a) the extent of implementation of the planning principles and the effect on urban water planning
decisions by utilities and local governments.
b) the role of the principles in advancing new approaches to planning, such as real options, risk or adaptive
management planning, water sensitive urban design and integrated urban water management.
Sharing the outcomes of current analysis
14. Jurisdictions to share information consistent with the objective, commencing with:
a)
Monitoring and reporting on trials of multiple tariff options for consumers. The outcomes of new
initiatives by utilities to provide different tariff options for a range of consumer groups will inform
governments about utilities ongoing ability to deliver on community expectations for liveable
communities, environmental protection and efficient services.
b) Monitoring and investigating how existing and new allocation mechanisms act to support greater
certainty for investment in stormwater, wastewater, recycled water and managed aquifer recharge. This
project would complement prior work on barriers to innovation in water sensitive urban design.
c) Monitor and report on outcomes from the Cooperative Research Centre on Water Sensitive Cities,
particularly in relation to robust evaluation of costs and benefits of Integrated Urban Water
Management and Water Sensitive Design.
Protecting public health and the environment
(Part of Item 16a) Achieving safe, good quality water for urban communities.
Respond to concerns about the variability of water quality in metropolitan and rural communities in the
future revisions of the Australian Drinking Water Guidelines and in the development of the strategic
direction of the National Water Quality Management Strategy.
Item 18: Estimation of rural water use
This action comes from the 2008–11 COAG work program on water, Actions 55(f) and (g).
f) prepare a national plan for estimating rural water use; and
g) use plan (in f above) to guide future investments by governments in the modernisation and extension of
non-urban water metering.
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Schedule B – Descriptions of existing reporting deliverables
This schedule provides further detail for certain reporting deliverables, as indicated in Table 2. Boxed
elements are verbatim extracts from COAG’s response to the NWC’s 2009 Biennial Assessment of the NWI.
Reporting Deliverable 5: Continue to publish the National Water Planning Report Card
An independently completed National Water Planning Report Card to be published by or on behalf of COAG,
reporting progress with the development and implementation of water plans in all water resource systems37
with reference to the Planning Guidelines. The first National Water Planning Report Card will be prepared
and published by the NWC by the end of December 2011.38
Subsequent reports are scheduled to be published every two years by a process to be determined following
the COAG review of the NWC in 2011. SCEW has tasked senior officials to report at its next meeting on
proposed future reporting timelines in the context of the new reporting obligations established under the
Murray-Darling Basin Plan.
Reports will provide a succinct evaluation of the status of each water plan, including against the following
indicators:
a) overuse status and whether there is a pathway to return to a sustainable water extraction regime;
b) inclusion of clearly identified and measurable outcomes;
c) facilitation of water trade (absence of trade barriers, meeting service standards for trade, etc);
d) integration of mining, forestry and other water intercepting activities within the water planning and
entitlements system where appropriate;
e) surface water/groundwater connectivity;
f) accountable environmental water management arrangements, together with a comprehensive
environmental watering plan (or other appropriate environmental water management arrangement);39
g) the adequacy of monitoring, compliance and enforcement provisions; and
h) planning for climate change and extremes in inflows or recharge that may occur during the planning
cycle.
In addition, the report will assess the adequacy of stakeholder engagement in planning processes and the
extent to which identified outcomes have been achieved during the reporting period.
Further:
Jurisdictions utilise the Planning Guidelines when developing all future plans and plan revisions,
incorporating principles within the guidelines to:
- include specific and measurable outcomes in all water;
- return overused systems to within their sustainable water extraction regimes;
- treat surface and groundwater as highly connected unless studies demonstrate otherwise;
- better integrate water use by forestry, mining and other extractive activities into the water planning
process;
- address the identification, risks, thresholds and management actions required for interception activities
as per guidelines
37 Where
a water system does not have a corresponding water plan, the National Water Planning Report Card will report whether a water plan will be
developed for that system. Where a jurisdiction determines that a water plan will not be developed for a particular system the reasons for that
decision (including whether a risk assessment has been undertaken) will be reported in the National Water Planning Report Card.
38
The NWC will consult with all jurisdictions on the Report Card methodology.
39
It is acknowledged that environmental water management arrangements differ depending on whether environmental water is provided through
rules or as entitlement-based water. It is also acknowledged that where an environmental watering plan is developed, that this plan may be in a
separate document to the relevant water plan. The Report Card will be flexible enough to cater for differing arrangements.
22
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-
-
establish accountable environmental water managers;
based on risk assessments and best practice modelling, ensure that water plans adequately address the
likely impacts of future climate change, including extreme flow events in areas where these may occur;
and
effectively engage stakeholders, including Indigenous people, in water planning.
Reporting Deliverable 6: Extend reporting outside the MDB, on agreed price and volumes for all
trades of entitlements and allocations
Outside of the MDB, jurisdictions to ensure that by the end of 2012:40 41
a) water access entitlement holders participating in a trade are required to report to approval authorities
or registers, at the time of seeking trade approval or registration, the agreed price and volumes for all
trades of water access entitlements and water allocations;
b) approval authorities and registers require pricing information to be provided as a condition of seeking
approval and registration; and
c) water price information is disclosed to the market in a timely fashion.
40
These actions are consistent with the ACCC’s draft trading rules advice to the MDBA.
41 Where
compliance with these actions requires legislative change, jurisdictions agree to use their best endeavours to enact such legislation within
the timeframe. In the interim, jurisdictions agree to implement administrative measures to accurately reveal as much price information as possible.
Timing determined in order to be consistent with delivery of the National Water Market System (scheduled to be delivered in September 2012).
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23