Australian Urban Water Reform Story

In 2016, the International Water Centre (IWC), with funding from the World Bank, commenced a review of the water utilities reform processes in Australia. The aim of this work is to explore the key success factors in the reform of urban water supply services through a study of the Australian example, from which relevant lessons can be drawn for other countries. To meet this aim, the IWC and researchers from the University of Queensland have sought to identify commonalities and differences between the steps taken by the various states and water utilities during Australia’s experience of reform in the urban water sector. One goal of our research is to reveal insights into the interplay between the state level of reform and regulation and national framework agreements. The related story of regulatory oversight, as part of the overall reform process, has been examined elsewhere. For example, the role of the Independent Pricing and Regulatory Tribunal (IPART) in New South Wales is important to that state’s pricing, regulatory, and sector reforms. Because there are many lessons to be learned from the New South Wales case, including and beyond IPART, the urban water sector reforms in New South Wales are the subject of a case study. Thus, this report analyzes urban water reforms initiated by recent national agreements in Australia, and demonstrates variations between jurisdictions and between approaches at different times. The analysis focuses on water utilities in the major cities (principally the state-level capital cities). The analysis also demonstrates how the Australian urban water reform process is part of a wider and longer series of national and subnational regulatory reforms since the late 1980s. These include competition policy reform, corporatization of government agencies, and the formation in the 1990s of the Council of Australian Governments (COAG). The COAG was crucial for bringing all states on board for reform in Australia, but there are major questions about how such coalition building among governmental leaders and senior bureaucrats can be adapted to the circumstances of other countries.