Institutional Reform in Water Resources Management in Australia

Reforms in water resources management in Australia have proceeded along three main lines, which have complementary origins in the community and in government: (i) state-driven water accounting and allocation reforms, pricing, cost recovery, removal of subsidies and administrative reform; (ii) a community-initiated movement for better land and water management - now commonly lumped under the banner 'LandCare'; and (iii) the development and specification of environmental flows, river flow rules and strategies to mitigate in-stream salinity and algal blooms. Land and water have been considered complementary factors in this process.

The Brundtland Report (World Commission ofEnvironment and Development, 1987) highlighted the international importance of co-dependency between environmental and economic policy in achieving sustainability. Australia responded through the National Strategy for Ecologically Sustainable Development (NSESD, COAG, 1992) (http://www.deh.gov.au/esd/national/nsesd/strategy/index.html), which adopted the 'precautionary principle' as a guiding philosophy. This strategy had three broad objectives:

1. to enhance individual and community well-being by following a path of economic development that safeguards the welfare of future generations;

2. to provide equity between generations;

3. to protect biological diversity and maintain essential ecological processes and life-support systems.

Management of surface water has been high on the agenda and the laboratory has often been the MDB, due to the extent of irrigation and surface water development. Regulation of the river has allowed increased reliability in agricultural production through a combined dam storage volume equivalent to 2.8-3 years of mean annual flow, but this security has occurred at the expense of river health (MDMBC, 1996).

As a component of the NSESD, reform of the water industry was tied to microeconomic reforms via the National Competition Policy reform package (1995). Within this package, financial benefits of microeconomic reforms were distributed on the basis of performance against specific reform agendas, including that of water (Tisdell et a/., 2002), through 'tranche' payments of central tax revenue to individual states on compliance with agreed targets. In tandem with reforms focused on the MDB, the COAG began a process of reform aimed at removing subsidies and ensuring competition and economic efficiency. COAG (1994) water reforms were intended to allow water to move to its most productive use by enabling water markets and full cost recovery of the operation and maintenance of irrigation systems. This incentive initiated rapid institutional changes, including significant legislative amendment. By the necessity of relevant time frames, these were implicitly driven by the dominant surface water issues.

Recognizing continuing resource issues and the need for further reform to fully develop and deliver full cost pricing policies (van Bueren and Hatton MacDonald, 2004), the COAG agreed to the National Water Initiative (NWI) in 2004 (COAG, 2004). The NWI objective explicitly identifies its application both to surface and groundwaters, and more specifically the issue of surface water-groundwater connectivity. This implies an inconsistent implementation of earlier COA OPG, 2004 (1994) reforms across surface and groundwaters, which is generally acknowledged as a lag between implementation of surface and groundwater reforms in most states.

In agreement with the NWI, the COAG delegated the following responsibilities to the NRMMC:

1. overseeing implementation of the NWI, in consultation with other minister ial councils as necessary and with reference to advice from the COAG;

2. addressing ongoing implementation issues as they arise;

3. providing annual reports to the COAG on the progress with actions being taken by jurisdictions in implementing the NWI;

4. developing a comprehensive national set of performance indicators for the NWI in consultation with the National Water Commission (NWC) (set up to implement the NWI).

Somewhat contentiously, the NWI proposed a fund to buy back surface water for the environment based on financial contributions from the state and central governments. This was derailed for some time due to the Commonwealth's intention to fund NWI from the Natural Heritage Trust, at the expense of previously agreed initiatives and payments to the states.

The story of LandCare is rich, varied and interesting and is well documented elsewhere (Ewing, 1996). It began with genuine, community-based initiatives in irrigated salinity management in Victoria and catchment management for dryland salinity in western Australia in the mid-1980s. LandCare became a national programme in 1992, following the historic joint initiative of the Australian Conservation Foundation (an environmental NGO) and the National

Farmers Federation. By 2001, there were 4500 LandCare groups incorporating 50% of farmers and 35% of land administrators. This phenomenal growth in community-based management of natural resources and associated investment went largely unevaluated until 2000, when the National Land and Water Audit (1999-2002) was established to set a benchmark on resource availability, use and condition, and allow future evaluation of the impacts of community and other initiatives on the resource base. Simultaneously, many felt that there were too many voices from the plethora of LandCare groups, sometimes working at too local a scale. This resulted in the creation of umbrella groups for coordinated community-based management, now well established, such as the Catchment Management Authorities (CMAs) in Victoria. Despite fears of a creeping bureaucratization of grass-roots initiative, CMAs have emerged as a central force in natural resources management, where essentially the community decides and partly self-funds management plans and their implementation, using state agencies and commercial companies as advisers and consultants.

In conjunction with the NWI, there are other state-level initiatives, such as the 2004 Victorian White Paper 'Securing our Water Future Together' (DSE, 2004), that move the focus of land and water management to be framed more tightly within the concepts of environmentally sustainable development. With that broad introduction to the setting and recent institutional reform in the water sector as a whole, we now turn to the specifics of groundwater.

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