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Focus: Managing our water resources–

23 December 2004

In brief: The National Water Commission Act 2004 (Cth) came into force on 17 December 2004. The purpose of the Act is to establish the National Water Commission, an independent statutory body that is to play an important role in driving Australia's water reform agenda. Partner Grant Anderson and Lawyer Alistair Newton outline the National Water Commission's primary responsibilities.

The National Water Initiative and Securing Australia's Water Future

In June 2004, the National Water Initiative (NWI) was signed by the Commonwealth Government and the Governments of New South Wales, Victoria, Queensland, South Australia, the Northern Territory and the Australian Capital Territory. The NWI was intended to develop a 'nationally-compatible, market, regulatory and planning-based system of managing surface and groundwater resources for rural and urban use that optimises economic, social and environmental outcomes'. See AAR Focus: Water, June 2004. In doing so, the NWI sought to build on the pre-existing water reform framework agreed to by the Council of Australian Governments (COAG) in 1994 (COAG Water Reform Framework).

During the recent election campaign, the Howard Government unveiled its key long-term water policy, Securing Australia's Water Future. See AAR Focus: Water, September 2004. This policy sought to advance the national water reform agenda through two key elements:

  • first, a $2 billion Australian Water Fund under which investments would be made to further the NWI's objectives; and
  • second, a National Water Commission to assess the nation's water resources, advise the government on funding proposals put forward under the Australian Water Fund framework, and make ongoing assessments of the NWI reform process.

Controversially, the Commonwealth Government proposed to establish the Australian Water Fund using funds that the states considered had been 'earmarked' for competition payments to them under the National Competition Principles Agreement. This has resulted in the states withdrawing from the NWI.

The National Water Commission Act

Despite this political hiccup, the newly elected Howard Government moved quickly to implement the core features of its Securing Australia's Water Future policy by introducing the National Water Commission Bill 2004 into the Commonwealth Parliament. The Bill was passed on 8 December 2004 and, following assent on 17 December 2004, became the National Water Commission Act 2004 (Cth).

The Act establishes the Commission as an independent statutory body with primary responsibility for driving the broader water reform agenda. In particular, the Commission's functions include:

  • assisting with the implementation of the NWI; and
  • advising the Commonwealth Government and COAG on matters of national significance relating to water (for example, matters involving more than one government or matters that are important to the overall progress of water reform).

The Commission's first order of business will be to conduct an initial assessment of Australia's water resources and water management arrangements. The Commission will also take over the National Competition Council's role in assessing each government's progress on water reform under the COAG Water Reform Framework (at this stage, the Commission will be undertaking the 2005 assessment only, although it may be asked to assess the implementation of any commitments that remain unfulfilled at the time of the 2005 assessment).

In addition, the Commission will be involved in the ongoing assessment of the progress of the governments in implementing the NWI's objectives. This will entail the Commission:

  • by mid-2005, assessing each government's plans for implementing the NWI and determining whether those plans are consistent with the NWI objectives;
  • on an ongoing basis, assessing the progress of each government in implementing the objectives, outcomes and actions under the NWI, and the performance of the water industry against national benchmarks for the management and use of Australia's water resources, and advising COAG of these assessments;
  • advising the Commonwealth Government and the Governments of New South Wales, Victoria and South Australia on the impact of freeing up interstate trade in water rights in the Southern Murray-Darling Basin (a key objective of the NWI); and
  • conducting a comprehensive review of the NWI itself in 2010-11 and determining the extent to which the NWI has achieved sustainable management of Australia's water resources (following this review, a review of the ongoing role and functions of the Commission in relation to the management and regulation of Australia's water resources will also be conducted).

Finally, the Commission will provide advice on projects to be funded from the Australian Water Fund (which is also established under the Act). The Howard Government has indicated that two programs will initially be funded under the Australian Water Fund framework:

  • the $1.6 billion Water Smart Australia program, which is intended to accelerate the development and uptake of smart technologies and practices in water use across Australia (for example, projects involving on-farm water efficiency improvements, more efficient water storage facilities and more cost-effective methods of recycling urban stormwater and grey water); and
  • the $200 million Raising National Water Standards program, which will invest in projects to improve governments' ability to measure, monitor and manage water resources (for example, projects that facilitate a nationally consistent system for collecting and processing water data, or that improve water resource planning systems).

The Commission will be comprised of a chairperson (nominated by the Commonwealth) and an equal number of commissioners nominated by the Commonwealth and the states. The day-to-day administration of the Commission will be undertaken by a chief executive officer. On 22 October 2004, the Howard Government announced that the Secretary of the Department of Transport and Regional Services, Ken Matthews, would be the Commission's inaugural chief executive officer.

If you would like any further information in relation to the matters outlined above, or their implications for the water industry, please contact any of the people listed below.

For further information, please contact:

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