National water reform

History of national water reform

In 1994 the Council of Australian Governments water reform framework was set up to balance the allocation of water between all users and maintain the health and viability of river systems and groundwater basins, establish principle-based pricing reform, and address service delivery inefficiencies. COAG’s early initiatives helped Australia progress towards efficient and sustainable water management.

By 2003 our understanding of water management and water markets had grown. At the same time the national demand for water had increased significantly. More work was needed to build upon the 1994 reform framework. This led to development of the National Water Initiative.

All Australian governments continue to develop our approach to water management to keep pace with changing needs. The Australian Government works with states and territories on water management initiatives that increase the efficiency, effectiveness and productivity of our water systems. These initiatives also seek to increase remote job and economic opportunities, including in regional Australia, sustainably manage water for environmental purposes and provide cultural outcomes for Aboriginal and Torres Strait Islander peoples.

The National Water Initiative

The National Water Initiative (PDF 348 KB) (NWI), agreed by COAG in 2004, is Australia’s national water reform blueprint, providing an overarching framework and principles for the sustainable management of our water resources.

This shared commitment by all Australian governments to improve how water resources are managed, planned for, measured, priced and traded in Australia, aims to increase the efficiency of Australia’s water use, provide investment confidence and greater certainty for the environment, and improve water security for rural and urban communities.

Under the NWI, all states and territories committed to:

• prepare water plans with provisions for the environment
• achieve sustainable water use in over-allocated or stressed water systems
• introduce registers of water rights and standards for water accounting
• expand trade in water rights
• improve pricing for water storage and delivery
• better manage urban water demands.

Assessment of national water reform progress

The Water Act 2007 requires regular progress assessments of Australian governments against the achievement of NWI objectives and outcomes.

The Productivity Commission (PC) is responsible under the Water Act for conducting these assessments every three years. The assessments were previously conducted by the National Water Commission (see below for further information).

2020 inquiry on national water reform

The PC released its 2020 inquiry report in September 2021. The report assesses progress and highlights the benefits that have been seen through the implementation of the NWI. These benefits include a more sustainable balance between consumptive and environmental uses, lowered average water use by households, more efficient use by industry and more water for the environment.

The PC’s report found that generally all Australian governments had made good progress towards achieving the objectives and outcomes of the NWI and there are emerging issues to be addressed through further reform efforts.

In its report, the PC made recommendations around enhancing the NWI, including for strengthened capacity to deal with droughts, floods and shocks; for adaptability to a changing climate; for improved fit-for-purpose regulatory, governance and management arrangements; and for use of the best available information in decision making. The PC’s recommendations are being considered by all Australian governments.

More information on the 2020 inquiry report and assessment of NWI implementation progress 2017–2020 is available on the PC’s website.

2017 inquiry on national water reform

In its 2017 assessment report the PC noted that good progress had been made by jurisdictions in achieving the objectives and outcomes of the NWI. The PC also suggested areas for national water reform focus to ensure adaptability to contemporary and emerging issues to ensure water security for all users.

More information and the 2017 inquiry report, released in May 2018, is available on the PC’s website.

The Australian Government’s response to the 2017 Inquiry on National Water Reform, is available on the National Library of Australia's TROVE website following the merging of the Department of Agriculture and the Department of the Environment and Energy to establish the Department of Agriculture, Water and the Environment on 1 February 2020.

Earlier assessments

Prior to 2014, the National Water Commission conducted the assessments on national water reform every two years. The National Water Commission also prepared national planning report cards in 2011 and 2013 that summarised water planning progress across Australia against an evaluation framework, based on key elements of the NWI. These are available to access in the following downloads section.

Downloads

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Resources on the NWI

Additional materials for water planners, policy makers and stakeholders have been developed to assist jurisdictions implement elements of the NWI framework in a consistent way:

• NWI Policy guidelines
• NWI Pricing Principles
• National Groundwater Strategic Framework
• Non-Urban Water Metering Framework Guidelines

National Water Reform Committee

The National Water Reform Committee promotes sustainable water use across Australia. It is made up of senior officials from Commonwealth, state and territory water agencies and advises on, oversees and coordinates water reform policy implementation. It also considers and progresses national water reforms and national agreements.

The Committee is supported by several advisory committees that advise on a wide range of matters, including Aboriginal water interests and water quality.