Jo Benvenuti

1
National water reform impacts for consumers

• Jo Benvenuti
• Executive Officer
• Consumer Utilities Advocacy Centre (CUAC)

2
Overview

• About CUAC
• History of water sector policy reform in
  Australia
• Water for the Future Program
• National Water Initiative
• Water Act 2007
• National arrangements for water governance

3
Overview

• Water entitlements and trading
• Urban water reform
• Consumer impacts of water reform
• Community engagement in water planning and policy
• Urban Water Stakeholder Reference Group
• Where to from here?

4
About CUAC

• Established to promote fair, equitable and more
  balanced regulatory outcomes in the electricity,
  gas and water industries in Victoria.
• Particular focus on low income, disadvantaged and
  rural and regional consumers.
• Collaboration/partnerships with other stakeholder
  groups.
• Water policy work includes advocacy/submissions
  to Government, research on water issues (e.g.
  consumer access and affordability).

5
Water policy reform in Australia

• History of state control
• 1994 COAG Water Resources Policy beginning of
  substantial reform at a national level
  efficiency and sustainability through markets
• National Water Initiative 2004
• Water for the Future 2008

6
Water policy reform in Australia

• Move to national reform coupled with shift to pro
  market policies
• From public good to commodity
• Water services industry third largest in the
  world behind oil and gas hydrocommerce
• Example of Summit Global Water water is the
  only commodity that has absolutely no substitute
  at any price.

7
Water for the Future Program

• April 2008 - 12.9 billion water investment
  program over ten years
• Has four key priorities
• 1) addressing climate change
• 2) water efficiency i.e. irrigation, water
  markets, and supply in rural communities

8
Water for the Future Program

• Four key priorities
• 3) securing supply through desalination,
  recycling and stormwater projects and
• 4) water market entitlement purchasing in the
  Murray Darling Basin.
• Policies include the National Water Initiative
  (NWI), the Water Act 2007 and Council of
  Australian Government (COAG) Reforms.

9
National Water Initiative (NWI)

• Agreed by COAG June 2004
• According to Govt Developed
• from the need for a more integrated and
  coordinated national approach to water
  management.
• The National Water Commission (NWC) assists State
  governments with implementation
• NWI involves actions across eight inter-related
  areas of water management.

10
National Water Initiative (NWI)

• The NWI is expected to achieve
• 1) expanded trade in water
• 2) confidence for investors in water industry
  through entitlements, registry arrangements,
  reporting etc
• 3) more sophisticated water planning
• 4) address over allocated systems and
• 5) efficient management of urban water, e.g.
  through increased recycled water and stormwater.
• State and territory governments have had plans
  accredited by the NWC on how they will implement
  the NWI.

11
The Water Act 2007

• Commenced 3 March 2008
• The Water Act assists in implementing the NWI,
  including
• A water market and trading scheme for
  Murray-Darling Basin (MDB)
• Best practice water pricing in the MDB
• Working for balance with the parties involved in
  MDB and
• Record keeping of water availability and use.
• Followed by the Water Amendment Act 2008 which
  gives effect to Intergovernmental Agreement on
  Murray-Darling Basin Reform

12
Water for the Future policy framework
Major policies
13
National arrangements for water governance
Council of Australian Governments (COAG)
Minister for Climate Change Water
Minister for Environment, Heritage the Arts
National Water Commission Act 2004
IGA National Water Initiative 2004
Reports to
National Water Commission
Dept of Environment, Water, Heritage the Arts
(DEWHA)
COAG Working Group on Climate Change Water
National Resource Management Ministerial Council
Advises
Water for the Future
Aust Govt National Water Initiative Impl. Plan
National Resource Management Standing Committee
COAG Forward Work Program on Water
COAG Water Sub Group
From National Water Commission web
site http//www.nwc.gov.au/www/html/2348-council-o
f-australian-governments-coag.asp
14
Water entitlements and trading

• Rural Water Trading has been in Australia for
  around 20 years
• Well established in MDB but has expanded since
  1990 reforms. Markets now more advanced than
  other countries
• Community study in rural Victoria (Frontier
  Economics, 2007) indicated support for principles
  and practice of temporary water trading but
  opposition to permanent trading.

15
Urban water reform

• Outlined in paragraphs 90-92 of NWI
• December 2008 report (Frontier
• Economics) on urban water markets found that to
  promote efficiency in urban markets reform
  options were
• development of third party access regimes for
  water and wastewater networks
• rural-urban water trade and
• establishment of an independent procurement
  entity.

16
Urban Water Reform

• Report states that if comprehensive market-based
  reforms are considered, a number of complementary
  measures will be required to ensure the continued
  achievement of social and environmental
  objectives in a more competitive urban water
  supply framework. (Frontier Economics, 2008)

17
Consumer impacts of water reform

• Criticism that reform has not included measures
  of wellbeing and justice, ignoring social bottom
  line (Syme Nancarrow 2008)
• Argument that more work is needed on social
  justice impacts of Australian water reform.
  (McKay and Bjornland 2002, in NAILSMA 2007)
• Available research on water trading and rural
  communities shows perceived uncertainty, fear
  about population loss and community viability.
  (Frontier Economics, 2007)
• Also perception that unregulated water trading
  will price farmers out of business.
• Fear among farmers that water barons may buy
  water and manipulate supply in a tight market.
• Example of Summit Global Management in Vic and SA.

18
Community engagement in national water reform

• NWI stakeholder panels include
• Urban Water Stakeholder Reference Group,
  National Indigenous Reference Group, groups which
  advise on water recovery and irrigation.
• Criticism that NWI directed towards trading and
  pricing. Requirements for public involvement are
  implied - lack of clear definition of
  participation (Mackenzie, 2008).
• Grassroots community initiatives include
  Watermark Australia (2005-2007) and the
  Australian Water Network (2009).
• Watermark Australia - Australians are not being
  encouraged to participate in discussions and
  debates about our water future.

19
Urban Water Stakeholder Reference Group

• CUAC national consumer representative of the
  Reference Group but Victorian jurisdiction
• Provides input on Water for the Future programs
  (12.9 billion), including national pricing
  principles
• CUAC unable to consult at national level

20
Where to from here?

• At State level CUAC is able to effectively
  represent consumers on issues such as water
  pricing and affordability.
• Federal Government does not consult with a
  national consumer panel/group on its Water For
  the Future program.
• Do we need a national consumer voice on water?

21
References

• Byrne, P.J. Eagle, N. OBrien, J. McDonald, D.
  2006, High and dry how free trade in water will
  cripple Australian agriculture. Freedom
  Publishing, Melbourne.
• Byrnes, J. Crase, L Dollery, B. 2006,
  Regulation versus pricing in urban water policy
  the case of the National Water Initiative. The
  Australian Journal of Agricultural and Resource
  Economics, 50, 437-449
• COAG 2004, Intergovernmental agreement on a
  National Water Initiative. http//www.nwc.gov.au/w
  ww/html/117-national-water-initiative.asp
• Crooks, M. Chamley, W. 2007, Our water mark
  Australians making a difference in water reform.
  Victorian Womens Trust. http//www.watermarkaustr
  alia.org.au/ourwatermark.html
• DEWHA 2009, The Water Act 2007 and Water
  Amendment Act 2008 Frequently asked questions.
  Commonwealth of Australia. http//www.environment.
  gov.au/water/action/water-act-faq.html
• Frontier Economics et al 2007, The Economic and
  Social Impacts of Water Trading Case studies in
  the Victorian Murray Valley. Rural Industries
  Research and Development Corporation, National
  Water Commission, MurrayDarling Basin
  Commission. https//rirdc.infoservices.com.au/item
  s/07-121
• Frontier Economics 2008, Urban water markets A
  final report prepared for the joint steering
  committee for water sensitive cities (JSCWSC)
  http//www.nwc.gov.au/resources/documents/Urban_wa
  ter_markets.pdf
• MacKenzie, J. 2008, Watered down the role of
  public participation in Australian water
  governance. Social Alternatives, 273, 8-14
• National Area Consultative Committee Network and
  Department of Transport and Regional Services,
  n.d., Case Studies on impacts of water reform on
  communities within Area Consultative Committee
  Regions Executive Summary. http//www.acc.gov.au/
  downloads/Community_Implications_National_Water_In
  itiative_exec_sum.pdf

22
References

• National Water Commission 2009, National
  arrangements. Commonwealth of Australia
  http//www.nwc.gov.au/www/html/2354-national-arran
  gements.asp
• National Water Commission 2008, Update of
  progress in water reform input into the Water
  Sub Group (WSG) stocktake report. Commonwealth of
  Australia. http//www.nwc.gov.au/resources/documen
  ts/COAG-Update-WR-150208.pdf
• North Australian Indigenous Land and Sea
  Management Alliance 2007, Indigenous Interests
  and the National Water Initiative (NWI) Water
  Management, Reform and Implementation. NAILSMA
  http//www.nailsma.org.au/nailsma/publications/dow
  nloads/NAILSMA_NWI_Review_UPDATEDec07.pdf
• Stock Journal 2009, Water network launched. 3
  April. http//sj.farmonline.com.au/news/state/agri
  business-and-general/services/water-network-launch
  ed/1477717.aspx
• Summit Global 2007, The Case for Water Investing
  2007, http//www.financialsense.com/editorials/d
  ickerson/2007/0308.pdf
• Syme, G and Nancarrow B. 2008, Justice and the
  allocation of benefits from water. Social
  Alternatives, 273, 21-25.
• Tisdell, J. Ward, J. Grudzinski, T. 2002, The
  development of water reform in Australia.
  Technical Report 02/5. Cooperative Research
  Centre for Catchment Hydrology.
  http//www.catchment.crc.org.au/pdfs/technical2002
  05.pdf
• Weekly Times Now 2009, Theres Summit about the
  water, April 1 http//www.weeklytimesnow.com.au/ar
  ticle/2009/04/01/67375_print_friendly_article.html
  
• Weekly Times Now 2009, Yanks raid Aussie water
  market. April 2 http//www.weeklytimesnow.com.au/a
  rticle/2009/04/02/67451_water.html

23
The End

• Contact
• Jo Benvenuti
• Executive Officer
• Consumer Utilities Advocacy Centre
• Ph 03 9639 7600
• Email jo.benvenuti_at_cuac.org.au
• www.cuac.org.au