Australia needs a revitalised National Water Initiative

Productivity Commission

Governments must renew and update the National Water Initiative (NWI) to address the effects of climate change and growing and changing demand for water, according to the interim report of the Productivity Commission’s review of the agreement.

The NWI was created in 2004 and sets out principles for water management, covering everything from access rights to pricing principles and investment in infrastructure.

“Water is essential to the wellbeing of all Australian communities, the environment, and the economy. The National Water Initiative has set strong foundations for managing this precious resource over the past 20 years but there are gaps that must be addressed,” said Commissioner Joanne Chong.

The report says the foundations of the NWI should be retained and expanded to better address the effects of climate change.

“Climate change is making rainfall more variable and increasing the incidence of extreme weather events. The NWI must protect our water security in the face of these growing challenges,” said Associate Commissioner Anne Poelina.

The current NWI objectives focus on water resource management, but there are also challenges to do with providing water services in both cities and regional areas.

“Communities in some regional and remote areas still do not have access to safe drinking water. In a renewed National Water Initiative, governments should commit to ensuring safe and reliable drinking water for all Australians,” said Commissioner Chong.

A renewed NWI should also better support the unique role of water in the lives and livelihoods of Aboriginal and Torres Strait Islander people.

“The NWI needs to better recognise Aboriginal and Torres Strait Islander people’s reverence and ongoing responsibility for water and support their participation in water management,” said Associate Commissioner Poelina.

The report emphasises that a renewed NWI must build on the 2004 agreement.

“The foundations of the NWI are sound and they should be retained to avoid jeopardising the progress Australia has made over the past two decades,” said Associate Commissioner Poelina.

“We need a revitalised National Water Initiative that builds on the strengths of the old agreement while preparing us for the future,” said Commissioner Chong.

Read the interim report and provide a comment or submission at


Key Facts:

The 2004 National Water Initiative (NWI) has served Australia well as a foundation for water management. But a renewed and updated NWI will help governments navigate growing water security challenges:

• Climate change is making rainfall as a water source increasingly less reliable.

• Demand for water is growing and changing.

Planning for water security should be a greater focus of a renewed NWI, in the face of an increasingly variable and changing climate.

• Jurisdictions need to plan for threats to water quality and availability from an increased risk of flooding, storms, bushfires and sea level rise, as well as drought.

• Governments also need to collectively model and plan for the water demands of the transition to net zero emissions.

• All options need to be on the table and transparently assessed, to ensure water security is achieved at least cost to the Australian community and to sustain the underlying health of water systems.

A renewed NWI should improve and expand on the existing agreement while retaining its foundations.

• A recommitment to the core principles of the NWI will provide a consistent authorising environment for jurisdictions to implement and continue to improve on best-practice.

• The current advice for renewing the NWI is consistent with advice provided in the Productivity Commission’s 2021 National Water Reform Inquiry report.

• A renewed NWI requires modernised and additional objectives that reflect community expectations for effective, efficient and equitable delivery of water services.

A renewed NWI should include both an objective and a new element, recognising First Nations people’s reverence and cultural responsibility for water and the continued involvement and participation of First Nations people in water management.

• The Committee on Aboriginal and Torres Strait Islander Water Interests should continue to lead the development of this new content in a renewed agreement.

• Governments should ensure alignment with their commitments under the National Agreement on Closing the Gap.

Many of the discrete actions under the NWI are complete, and most jurisdictions continue to make progress implementing their remaining and ongoing 2004 NWI commitments. However, gaps remain.

• Western Australia and the Northern Territory have not implemented statutory perpetual water rights.

• Fully independent economic regulation of water utilities has not been adopted by all states and territories. In Western Australia, Queensland and Northern Territory, independent economic regulators do not have the power to set prices.

• Although jurisdictions have developed various action plans and strategies to include First Nations people in water planning and decision-making processes, actual outcomes still need to be achieved.

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/Public Release.