Official Response to Drought Just Doesn’t Hold Water

11 January 2007

The Advertiser

By Katie Lahey
Chief Executive
Business Council of Australia

As Adelaide water users now face tougher, level three water restrictions, they are entitled to ask what is being done to secure the city's water supplies into the future.

Put another way, does it make sense for Australia’s major cities to be on long-term water restrictions as a key solution to managing our water requirements?

We are being increasingly told that urban water scarcity is inevitable, and we must learn to use less water to survive – buy low-use shower fittings, only water our lawns at night and wash our cars with buckets.

Although water restrictions have a part to play, they do not address the fundamental cause of our urban water scarcity – which is a lack of investment in new water supplies to meet the demands of growing populations and to cope better in times of drought.

While the report prepared last month for the federal government, Securing Australia's Urban Water Supplies: Opportunities and Impediments, identified many positives in South Australian water management, it concluded recent drought conditions demonstrated the need for improved water security in the state.

SA is ahead of some other states in taking steps to address its water problems, with recent debate around the potential benefits and value of investment in new sources of supply, including recycling and desalination and changes to rules about the reuse of water.

But fixing our water problems is a challenge that cannot be met by individual states acting alone. There must be far greater co-operation between states to overcome the problem.

Adelaide's water shortages are caused as much by Murray–Darling Basin water management practices in other states as by rainfall patterns and water management in SA.

In our September report, Water Under Pressure: Australia’s man-made water scarcity and how to fix it, the Business Council of Australia shows urban water scarcity is a man-made problem that can be fixed.

The impediments to new urban water supplies should be removed. All the competing options to increase water supplies should be considered and evaluated on their relative economic and environmental merits.

If necessary, a new pricing formula should be introduced to ensure the investment in these new supplies occurs.

Reviewing and perhaps changing water pricing structures does not have to mean higher water prices for many residents. It may mean, however, that those who choose to use higher-than-average amounts of water pay a premium for that use.

Across Australia, the process of reform in rural water also needs to be hastened. The outstanding building blocks for national water trading should be put in place and barriers to water trade removed.

To its credit, SA has removed an impediment to effective trading with its announcement to remove stamp duty on water trades.

But more comprehensive water trading between states and adoption of other measures already agreed under the National Water Initiative would help address remaining barriers to secure rural water supplies. By facilitating investment in water infrastructure and allowing market forces to determine the best use of water, we can ensure sufficient water for urban use, improve environmental outcomes and ensure irrigation water gets its highest-value use.

Adelaide residents and South Australians more generally deserve better co-operation between their government and others on water management, and better answers to questions about how to deal with water scarcity than simply being told to accept another summer of water restrictions.



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