19 May 2011

In April the Productivity Commission released its Draft Report: Australia's Urban Water Sector. The Water Directorate engaged Daryl McGregor of DLM Environmental Consultants to prepare a response on our behalf. A copy of our submission to the Productivity Commission is available here.

In general, the Water Directorate concurred with the findings of the Productivity Commission's Draft Report and we support the following recommendations:

• the objectives for the urban water sector as listed in Draft Recommendation 3.1;
• Draft Recommendation 6.1 regarding making better supply augmentation decisions, but point out that adaptive management processes are already applied in the development of supply augmentation schemes in regional NSW;
• the removal of bans on rural-urban water trading and trading between regional water utilities;
• the provision of subsidies for small utilities and communities for infrastructure and service provision (where it is uneconomic for the utility itself to provide these);
• the provision of meters to all new single and multi unit dwellings;
• the provision of more consumer choice in setting urban water tariffs, providing such charges do not add complexity or disadvantage sections of the community;
• uniform pricing principles within which LWUs would continue to set their own charges;
• the proposal that water use efficiency and conservation activities not be mandated, although such measures should be strongly supported in inland, regional areas; and
• the proposed governance models for regional areas.

The Water Directorate also advised the Productivity Commission that: ·

• we support a review of the Australian Guidelines for Water Recycling with a view to enabling better facilitation of reuse schemes in regional Australia;
• Developer Charges in regional NSW are set in accordance with Developer Servicing Plans developed by LWUs in accordance with criteria set by and approved by the NSW Office of Water;
• water restrictions in regional NSW are only applied in the case of water shortage or emergencies and are not used routinely as a demand management mechanism;
• compliance with the health critical elements of ADWG is currently going through the processes for mandating by gazetted Regulation in 2012, under the NSW Public Health Act;
• rate pegging in NSW applies only to Councils' General Funds, not for Water and Sewerage Funds.

Any reference to the Infrastructure Australia report, prepared by AECOM, that we have previously objected to was clearly refuted in our response to the Productivity Commission with the aim of making sure this misinformation is not perpetuated in future reports on the urban water sector.

Gary Mitchell and Stewart McLeod will attend a public hearing in Sydney on 31 May to participate in further consultations regarding the Draft Report. In the meantime, Please feel free to contact Gary Mitchell with any of your comments on our submission.

For more information contact: