PO Box 222
ST LEONARDS NSW 1590
Ph. +61 2 9436 0055
Fx: +61 2 9436 0155
The Hon. Warren Entsch MP
Chair of the Joint Select Committee on Northern Australia
PO Box 6022
House of Representatives
Parliament House
Canberra ACT 2600
15 August 2014
Dear The Hon. Mr Entsch,
The Australian Water Association (AWA) welcomes the opportunity to comment on the Green Paper
on Developing Northern Australia. Further, the Association looks forward to providing input and advice
as the White Paper comes to fruition.
The key issues articulated in the Green Paper, including delivering economic infrastructure, improving
land use and access, improving water access and management, promoting trade and investment,
fostering education and innovation, and enhancing governance, are aligned with the key areas that
AWA believes need to be the focus to develop a prosperous northern Australia.
Ensuring the involvement of the public and industry groups in developing the White Paper is
imperative in ensuring it is evidence-based and improves prosperity for all Australians. AWA
especially wants the Panel to understand the true value of water as an economic driver and its
importance across all key themes.
The Green Paper adequately articulates that as a result of Northern Australia’s access to Asia there is
huge potential for economic growth; however we must ensure that government creates a regulatory
environment in which business can thrive, guaranteeing long-term prosperity while balancing
environmental consequences.
AWA is supportive of the six broad policy directions included in the Green Paper and we look forward
to further detail on how these will be implemented in practice in the White Paper. In particular, the
White Paper could include further details on the role of water markets.
The Association’s comments are organised as responses to the four sections on the following pages.
AWA would welcome the opportunity to provide ongoing advice and promotion of the Northern
Australian Development Plan, drawing broadly from the expertise comprised within our membership.
Using the expertise of membership base, we would happily act as the key industry link with the water
sector on any suggested panels or working groups.
Please don’t hesitate in contacting either myself or National Manager – Communications and Policy,
Amanda White, on 02 xxxx xxxx if we can be of further assistance.
Kind regards
Signature removed
Jonathan McKeown
Chief Executive
Australian Water Association
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Section A
The major characteristics of northern Australia are captured in Section A. The report adequately
details that there is a high level of variation across the three jurisdictions that compose Northern
Australia. The report articulates that there are differences in climate, population and demographics,
natural environment and resource, the economy, education and health, infrastructure and land.
Gaps in information
Northern Australia is characterised by isolated and concentrated areas of good information, with large
gaps in between, for example in the Pilbara mines have to dedicate resources to gather
comprehensive information on small areas near the mine site and there is scant information about
areas between mine sites. If work is to be done on identifying water resources for agriculture or others
in the Pilbara region, the Government should consider investing in developing the baseline data that
will underpin sustainable development of agriculture and water for regional towns.
Infrastructure
Under the heading ‘infrastructure’ is section A, water infrastructure is omitted. Although this
highlighted in other sections of the document, it would be useful to outline existing water infrastructure
assets here.
State balance sheets and affordability
The aspects of the Northern Australian economy that should be a focus for governments include
addressing state balance sheet challenges. This includes an assessment of how governments can
afford to maintain and augment their existing infrastructure and ensure that pricing is cost-reflective.
AWA supports a long term planning approach and encourages the Government to continue working
collaboratively with Infrastructure Australia on their Audits.
New infrastructure needs to include critical water infrastructure requirements and needs. In particular
there will be critical infrastructure needs for both new surface water storages and maintenance of
existing infrastructure in most major cities and towns including Townsville, Cairns, Mackay,
Rockhampton, Mount Isa, Darwin, Tennant Creek, Gilbert and Flinders basins, Upper Burdekin,
Galilee Basin and the Pilbara region.
Expanding agricultural output
To expand agricultural output there is a need for additional irrigation water in both existing irrigated
regions and potential, future irrigated regions. AWA believe that the associated infrastructure would
be best provided by private sector investment. In order to facilitate this investment, government must
focus on clearing away the tangle of red and green tape that inhibits it at present, such as the
complicated regulation both within and across jurisdictions.
Expanding water markets
Expanding water markets includes both an expansion of physical infrastructure as well as a change in
economic regulation. Expanding water markets is listed as a key priority area for water as one of the
six policy priorities; however the report does not provide specific detail about what changes are
required to promote water markets in northern Australia. The reform process should harness the
lessons learnt from the Murray-Darling Basin and apply these to the north.
Section B
The Report successfully covers the myriad opportunities for Northern Australia in Section B. The
Association notes the involvement of the Ministerial Working Group on the acceleration of investment
in water infrastructure and endorses the need to look beyond dams as water security measures.
AWA strongly advocates that governments continue to make informed decisions on the best water
supply options for each location. This includes ensuring that a portfolio of options is considered such
as groundwater replenishment, water recycling, managed aquifer recharge, groundwater trading, and
desalination.
It is critical that proper cost-benefit analysis is done to determine whether investment is best directed
toward large water infrastructure projects, deficiencies in drinking water quality, wastewater treatment
or capacity to service the growing populations.
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Sustainable water management is of the highest priority, however it should be
also noted that water is the single biggest driver for economic prosperity in Australia. The food and
beverage industry, agribusiness, power and energy, mining and tourism, all depend on water and its
proper management to succeed.
The Green Paper mainly focuses on the links between water and agriculture, however it should be
noted that it is a key priority for most industries.
Section C
The Association agrees with the description of the barriers to development articulated in the Paper,
however we recommend the following barriers also be considered.
Infrastructure
Under the infrastructure heading, it is important to note that water infrastructure in Northern Australia
is limited, which will constrain industry and community growth. Some examples of critical
infrastructure needs include new water surface storage, connecting trunk infrastructure and potential
drinking water treatment upgrades.
Further, as water is fundamental to the success of development of community and all industries,
specifically mining, agriculture and tourism, it is imperative that water infrastructure plans are not
developed in isolation and regulation does not unduly restrict parties from voluntarily entering into
water supply arrangements for mutual benefit. There are many examples of how water treatment from
mining can benefit the agricultural sector by making use of the produced water.
Skills
The ‘water industry’ as a whole does not have a precise definition. Often it is narrowly thought of as
simply water utilities. This in turn often translates to a strong public sector definition. However, the
water sector can better be considered to more broadly include private companies (from engineering
contractors, private sector operators to urban planners for example) that assist the utilities in providing
services. Other participants such as large irrigators, scientists and technicians maintaining water
quality may also be included.
Regardless of the definition, a range of jobs contribute to Australia’s ability to access and treat water.
The ABS estimates around 40,000 people work in the Water Supply, Sewerage and Drainage
Services sector (ABS, 6291.0.55.003 Labour Force, Australia, Detailed, Quarterly, August 2012) while
AWA estimates the water industry’s workforce to be around 80,000. This estimate includes water
professionals who may be classified under another profession e.g. engineers.
The water industry is in competition with other sectors for skilled workers. For example, Australia’s
current ‘two-speed’ economy is likely resulting in a range of skilled workers being taken up by the
mining sector, putting pressure on the water industry’s ability to attract and retain such skills. This is
driving up salaries to a level at which the water industry finds it hard to remain competitive.
Research by Government Skills Australia indicates a shortage in water industry skills in coming years,
and this is relevant as Northern Australia looks to prosper. In order to prepare for current and future
workforce needs, the White Paper needs to consider skills required across three key areas:

non-water specific professions (e.g. engineers, IT and accounting/finance professionals)

managerial and commerce skills (e.g. management and business development/sales)

technical skills gap specific to the water industry.
Over half the identified job types that are in most demand by the water industry are not specifically
related to water. Furthermore, none of the professionals identified as being in demand are water
specific roles. Of the top 12 most in-demand job types, non-water specific engineering professions
constitute a quarter of the job types (civil, mechanical and environmental). Other professions and
trades not related to engineering also appear as some of the most in-demand job types (IT,
accounting and finance, and electricians).
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In addition to non-water specific skills gaps identified above, the water industry
also faces skills gaps in areas that are highly specialised to the industry. Waterspecific technical skills such as water treatment, wastewater treatment and water distribution are
identified as being in high demand
Regulation of water industry
The regulation of Australia’s water sector is highly fragmented, and the compounding pressures of
economic, social and environmental regulation need to be addressed. With Northern Australia as
defined by this report covering three jurisdictions it is particularly pertinent that regulation affecting the
water sector be harmonised and simplified. For example, Queensland alone currently has eight
departments of the state government with responsibility across the water sector. The requirements of
these departments need to be consolidated to ensure the government speaks with one voice.
The Association advocates for a national framework that covers all areas relevant to water and
wastewater management – inclusive of environmental, health, and pricing aspects. This will also
assist in encouraging private investment or private public partnerships.
New commercial models
The water for food issue is topical and being keenly discussed, however AWA believes there needs to
be more consideration of how large agricultural investments and investment in supporting
infrastructure (for example infrastructure to get produce to ports) can be financed. Other than seeking
investment from Asia, the White Paper would benefit from detailing how the private sector will be
encouraged to contribute to the financing of infrastructure. Consideration should be given to
superannuation funds as investors in water assets, and the potential for alliances between large scale
agribusiness and superannuation funds should be explored further.
AWA believes that private investment could assist in delivering solutions for priority target assets
including large infrastructure assets with proven performance such as wastewater treatment plants
and desalination plants. There is the need for clear and strong policy and regulatory settings to
maximise private sector involvement while guarding against price exploitation by natural monopolies.
This includes a need for consistency of economic regulation across all states and territories to attract
long-term private investment.
Industry-driven private investment, for example mining, agriculture and regional tourism are effective
ways to attract capital investment into regional and rural areas. Incentives for regional and remote
investment are also favourable, especially taxation incentives in the development of Northern
Australia.
There’s a need to elevate the community’s perception of water as a commodity worth managing
sustainably to one of Australia’s most vital drivers of economic prosperity.
Section D
AWA agrees with the benefits of tailored, fact-based approaches to improving water access in the
north, further concurring that integrating water infrastructure into relevant planning strategies is
imperative. The policy directions detailed in Section D are aligned with the Association’s policy
directions, however a few amendments and inclusions are suggested.
Regulation
We concur with the view that regulatory and approval processes for water service infrastructure are
costly, lengthy and inefficient. They are a high barrier to private sector involvement and significantly
inhibit private sector investment. The single most useful step that could be taken to encourage the
development of Northern Australia is to simplify the relevant legal and regulatory framework to make it
more conducive to private sector involvement. In the water sector, this applies to both small-scale onfarm infrastructure (eg dams, bore pumps, channels and formed paddocks) and large dams,
reservoirs and pipelines.
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Water markets
To ensure that scarce water resources are used in the most economically
efficient manner, there must be clear legal frameworks, based on the principles in the National Water
Initiative, enshrining private property rights in respect of water resources, facilitating trade wherever
hydrologically possible, discouraging all trade barriers, and allowing market determination of prices.
Northern Australia will need to catch up with the Murray-Darling Basin in this regard. There must also
be clear rules about how water resources will be managed sustainably.
Water supply
The Association recommends that dams are not pushed as the preferred source of water supply and
security. Currently the paper read as if this is the case, even though alternative sources of supply
(including making greater use of groundwater) are noted.
Private sector investment
The key issue facing Australia’s water assets over the next five years is balancing price and
affordability for consumers, against the need to maintain and augment existing infrastructure - which
comes at a cost. This will be particularly challenging with the high capital expenditure required to
develop infrastructure in the North and the community’s willingness to pay for it.
The Association agrees with the Green Paper that private investment could assist in delivering
solutions for priority target assets and networks.
Legislation
The Queensland Government is reviewing its water legislation to ensure it reflects contemporary
approaches to water management, government service delivery and technology. With WA also
recently reviewing their water legislation, we should be ensuring that Northern Territory’s legislation is
in alignment.
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