The Productivity Commission has released its final report on Australia’s urban water sector following a year-long investigative inquiry to consider the case for further reform in the sector.


The Commission found that efficiency gains are likely to come from a wide range of areas, including improving the performance of institutions, transparent and consistent regulation and competitive procurement of supply and pricing, with benefits of reform expected to flow on to consumers and the broader community.


The report finds that conflicting objectives and unclear roles and responsibilities of separate governmental bodies, water ultities and regulators has led to inefficient allocation of water resources as well as misdirected funds and undue reliance on water restrictions and costly water conservation programs.


The Commission found that as a consequence of the issues raised, the largest gains in productivity in the sector will come from establishing clear objectives and improving performance of existing situations with particular note to clarifying roles, responsibilities, governance, regulation and competitive procurement.


The report found that in order to implement recommended reforms, governments should:

  • clarify that the overarching objective for policy in the sector is the efficient
  • provision of water, wastewater and stormwater services so as to maximise net benefits to the community
  • ensure that procurement, pricing and regulatory frameworks are aligned with the overarching objective and assigned to the appropriate organisation
  • put in place best practice arrangements for policy making, regulatory agencies, and water utilities
  • put in place performance monitoring of utilities and monitor progress on reform.


The full report by the Commission can be found here