Future-proofing water planning and management under a new paradigm

Australia’s water planning and management frameworks need to evolve. Over time, they have been expected to deal with a broader set of challenges than those they were originally designed for. There is a need to better link catchment-level water planning with coherent strategy, governance and processes.

Refreshing the water planning and management schedule under the draft NWA provides a renewed opportunity to raise the level of ambition and set a clearer framework for planning and management for the next 20 years. 

Key messages

• Water planning now operates in a more contested and interconnected context, with decisions increasingly linked to economic, environmental and social priorities beyond the water sector.
• There is a need to ensure water planning adopts a wider and more integrated approach that considers and balances the full range of impacts and values across stakeholders. This should extend beyond what sits in a water plan or whether a plan is in place, to consider the broader suite of instruments and process that make up the planning system and the governance that underpins its delivery and operation.
• A renewed National Water Agreement and related Commonwealth policy agenda provides an opportunity to look beyond catchment plans and focus on whether jurisdictions have the right arrangements in place to support effective planning and implementation.

Evolving needs – are we still planning and managing for the same issues and outcomes?

The philosophy of Australian water management has evolved over time from a government-led, infrastructure-driven approach to developing water resources for town supply and (largely) agricultural uses, to a rules-based system that seeks to balance a broad range of needs, backed by robust planning, water sharing, and compliance frameworks.

The National Water Initiative (NWI) outlined a planning, regulatory and market-based system has aimed to ensure efficient and sustainable management of water, setting the true north for the sector. This generally remains appropriate. However, what is required to achieve this objective has changed over time. Sustainable and efficient water sharing is now much broader than protecting town supplies and allocating the remaining water across irrigation industries.

The frameworks that have operated in this context need to evolve to better reflect a wider range of stakeholders, needs and priorities, or risk planning with blinders on. This is evidenced in the example of water interests for Aboriginal and Torres Strait Islander peoples, where, despite widespread acknowledgement, tangible progress has been slow. This is in part because these interests have often been treated as an add-on to planning and management norms and practices, rather than embedded within them.[1]^,[2],[3]

Separately, demands from new industries, including those fuelling the energy transition – from critical minerals, to hydrogen and biofuels – are changing the planning landscape and are increasingly intertwined with regional economic development and structural adjustment, as well as national economic and strategic priorities related to growth and security. This is exemplified by policies such as the federal government’s Future Made in Australia, priority areas under the National Reconstruction Fund and the Regional Investment Framework, plus various state-level policies and strategies.

Implications – what does this mean for water planning and management?

Under the NWI, the combined requirements for entitlements and water planning are primarily focused at the water source or system level. This includes defining the consumptive pool, unbundling water access entitlement and ensuring plans articulate the trade-offs between social, environmental and economic outcomes, and provide an adaptive pathway for managing the resource. Several aspects of this remain only partially achieved across some jurisdictions according to the Productivity Commission’s 2024 National Water Reform Inquiry, which highlights the need for catch-up.

Outside of water plan requirements under the NWI, states and territories adopt other strategies, assessments, plans and processes that may sit at the state, regional or local level and interface with water plans. This includes state and regional water strategies, state-wide water resource assessments and other frameworks (for example climate change adaptation planning or state infrastructure plans). Arrangements vary by jurisdiction, and except for Victoria, are largely set through non-statutory policy instruments – this can also mean that there is no formal structure to their evaluation and renewal.

Water planning and management is increasingly strategic, in the sense that it must navigate a broader set of aims and issues that are critical to local, regional and national outcomes. We argue that this suggests the need for clearer principles on what an effective planning system looks like beyond the scope of an individual catchment plan. This would help to better understand not just whether a plan is in place or not, but whether each jurisdiction has a coherent suite of instruments and processes in place to support effective water strategy, planning, risk management and water management arrangements.

Addressing this does not require a uniform approach across jurisdictions, but it would require each jurisdiction to have a clearly articulated structure that: links state or regional water strategies to catchment planning; outlines supporting plans and assessments that support the review and update of strategies and plans, and; the connectivity between water strategy and planning to other sectors. This exists to varying extents across several jurisdictions but is not necessarily a defined model that drives strategies, decisions and planning over multiple cycles. There is scope to better define the basic tenets of this model and push jurisdictions to adopt a more organised and robust approach in response.

Related to the preceding discussion, is the topic of governance. Fragmented or ineffective governance is often cited as key barrier to integrated planning and management. The Murray-Darling Basin has evolved with its own unique governance arrangements and separation of various roles and functions – including in response to issues of public trust and transparency. Outside of the Basin, states adopt very different models. In many cases, the effectiveness of these models has not been tested against the kinds of system-shaping decisions now emerging – whether that’s desalination solutions for regional areas, special licenses for hydro schemes and mines or entitlement frameworks for overland flows.

As competition for water resource increases and more players enter the picture, it may be prudent to consider what effective governance looks like across water policy, planning, allocation, entitlement frameworks (including the licensing and compliance that sits alongside). This would include demonstrating appropriate roles and responsibilities and effective decision-making processes across planning and water sharing, as well as functions supporting water resource management activities, water infrastructure investment, metering and monitoring, compliance and enforcement and more.

In short, the next phase of reform could look beyond water plan requirements and focus more broadly on ensuring the strength of the planning system as a whole, as well as the governance to support effective and efficient plan development and implementation. A renewed National Water Agreement could contribute to this by challenging jurisdictions to a higher-level of ambition and moving beyond general guidance and principles to a clearer articulation of what future-proof planning needs. 

The window to make change is open –  there is a need to make the most of it

The draft National Water Agreement presents an opportunity to set in stone clear markers that will shape how water is managed in years if not decades to come. This moment matters, because decisions taken now will shape planning practice for many years to come.

For a renewed National Water Agreement to add value, three things matter:

• It must add value to state-based planning and management frameworks and practices; there must be an advantage in signing on, be that collaborative, financial, technological or simply as a sound reference for government.
• It must move the needle on planning and management; there is little benefit if state-led implementation plans reflect the level of ambition and trajectory they would have taken regardless.
• If carrying forward existing NWI provisions that are not universally adopted, a new agreement should provide a compelling case for addressing unfinished business from the last two decades.

We argue that in response to the issues and opportunities touched on in this paper, that more could be done to address these three requirements. 

Continuing the conversation

The ideas raised in this article go to the heart of Australia’s next phase of water reform. How water planning navigates multiple values, system-shaping decisions and fragmented governance will shape outcomes for decades.

These issues align closely with the Commonwealth’s proposed work to Refresh Australia’s Water Policy - In particular, Workstream 2: Water planning and management provides a clear opportunity to address the issues raised in this article.

These papers are intended as conversation starters. We welcome perspectives from across the sector — including where readers agree, disagree, or believe important considerations have been missed. Readers are encouraged to get in touch with the respective authors, or to contact matthew.coulton@ricardo.com in relation to the series as a whole.