Bans on purified recycled water for drinking should be lifted so that all supply augmentation options can be considered in the future, the Productivity Commission says.
In a draft report into national water reform, the commission has also called for the removal of exemptions granted to the minerals and onshore gas industries from water consumption regulations.
The commission says governments at all levels have failed to remain focused on water policy challenges despite recent devastating droughts that left regional towns without water.
While the 2004 National Water Initiative (NWI) is still “sound”, it must be modernised to consider adaptation to climate change, the importance of water to Indigenous Australians, better water planning, increased measurement of water diversions, and stronger government oversight.
Governance had been “significantly eroded” over recent years with the responsible ministerial council disbanded, the National Water Commission closed, and states no longer prepared to put in place ongoing plans to reform water services.
The PC notes that both climate change and population growth will put tremendous strains on the nation’s water system.
“The reality is that Australians will need to become even more adept at dealing with drought, and communities, industries, and the environment will have to adapt to lower water availability and more uncertainty.”
Regarding the National Water Grid Authority, established by the Morrison government in 2019 to fund new water infrastructure projects, the commission says the grid’s focus on supplying water to the farm sector should be reduced, arguing this amounts to subsidising commercial operations.
The authority should concentrate instead on funding the provision of safe and reliable drinking water across the country.
“Water ministers should meet periodically to oversee the development of a renewed NWI,” the report recommends.
“A renewed NWI could also establish a standard for best practice urban water system planning, including the adoption of integrated management of water supply, wastewater, and stormwater.
“There also needs to be clear roles and responsibilities for decision-making, and processes and incentives to facilitate collaboration between water utilities, governments, regulators, developers and land planners in planning,” it says.
The PC will seek further comment before handing a final report to the Federal Government in June.