The National Water Initiative

The Council of Australian Governments (COAG) is made up of the Prime Minister, Premiers and Chief Ministers and the President of the Australian Local Government Association.  The COAG noted during their meeting on 25th June 2004 that there is the continuing national importance of increasing the productivity and efficiency of Australia's water use and to ensure the health of river and groundwater systems.

COAG agreed to a National Water Initiative (NWI) covering a range of areas in which greater compatibility and the adoption of best-practice approaches to water management nationally will bring substantial benefits.  In particular, the NWI will result in:

  • Expansion of permanent trade in water bringing about more profitable use of water and more cost effective and flexible recovery of water to achieve environmental outcomes
  • More confidence for those investing in the water industry due to more secure water access entitlements, better and more compatible registry arrangements, better monitoring, reporting and accounting of water use, and improved public access to information
  • More sophisticated, transparent and comprehensive water planning that deals with key issues such as the major interception of water, the interaction between surface and groundwater systems, and the provision of water to meet specific environmental outcomes
  • A commitment to addressing over-allocated systems as quickly as possible, in consultation with affected stakeholders, addressing significant adjustment issues where appropriate
  • Better and more efficient management of water in urban environments, for example through the increased use of recycled water and stormwater.

Key elements of the NWI include:

  • Water access entitlements to generally be defined as open-ended or perpetual access to a share of the water resource that is available for consumption as specified in a water plan (recognising that there are some cases where other forms of entitlement are more appropriate)
  • Improved specification of the environmental outcomes to be achieved for particular water systems, improved accountability arrangements for environmental managers and statutory recognition for water that is provided to ensure environmental outcomes are met
  • Over-allocated water systems to be returned to sustainable levels of use in order to meet environmental outcomes, with substantial progress by 2010

A framework that assigns the risk of future reductions in water availability as follows:

  • Reductions arising from natural events such as climate change, drought or bushfire to be borne by water users
  • Reductions arising from bona fide improvements in knowledge about water systems’ capacity to sustain particular extraction levels to be borne by water users up to 2014. After 2014, water users to bear this risk for the first three per cent reduction in water allocation, State/Territory and the Australian Government would share (one-third and two-third shares respectively) the risk of reductions of between three per cent and six per cent; State/Territory and the Australian Government would share equally the risk of reductions above six per cent
  • Reductions arising from changes in government policy not previously provided for would be borne by governments
  • Where there is voluntary agreement between relevant State or Territory Governments and key stakeholders, a different risk assignment model to the above may be implemented
  • More efficient administrative arrangements to facilitate water trade in connected systems
  • Removal of institutional barriers to trade in water, including a phased removal of barriers to permanent trade out of water irrigation areas in the southern Murray-Darling Basin
  • Regional assessments of the level of water intercepted by land use change activities and requiring new activities expected to intercept significant volumes of water to hold a water access entitlement if the catchment is at, or close to, its sustainable level of water allocation
  • Continued implementation of full-cost recovery pricing for water in both urban and rural sectors
  • National standards for water accounting, reporting and metering
  • Actions to better manage the demand for water in urban areas, including a review of temporary water restrictions, minimum water efficiency standards and mandatory labelling of household appliances, and national guidelines for water sensitive urban design.

Implementation of the NWI will be overseen by the Natural Resource Management Ministerial Council in line with detailed implementation plans to be developed by each State and Territory over the next 12 months.

Western Australia declined to sign the NWI Agreement because there was no real benefit for Western Australia.  Tasmania is not able to sign the NWI Agreement at this stage, but will continue to seek productive discussions with the Australian Government on opportunities for cooperation on water reform.

The first priority for this investment will be water recovery for six significant ecological assets identified by the MDB Ministerial Council in November 2003: the Barmah-Millewa Forest (NSW/VIC Border – see below), Gunbower and Koondrook-Perricoota Forests (NSW/VIC Border – see below), Hattah Lakes (VIC), Chowilla floodplain (including Lindsay-Wallpolla)(NSW, VIC & SA – see below), the Murray Mouth (SA), Coorong and Lower Lakes (SA), and the River Murray Channel (NSW, VIC & SA – see below).  Water recovery measures to be funded under the MDB Water Agreement include investment in water infrastructure and behavioural change and purchase of water on the market, with recovered water to be set aside for environmental purposes.


Figure 1:  Barmah-Millewa Forest


Figure 2:  Gunbower and Koondrook-Perricoota Forests  


Figure 3:  Chowilla floodplain  


Figure 4:  The Murray-Darling River System


Figure 5:  The River Murray Channel Source: