Who pays for water in the future? Rethinking how we fund, regulate and value water services

After a decade of falling household water bills and operational cost savings driven by efficiency reforms, Australia’s urban water sector is facing a fundamental turning point.

Capital investment is surging. Many of our assets are nearing the end of their operational life and now require substantial renewal or replacement. At the same time, population growth is placing urgent demand on the rapid expansion of services, while climate change is pushing utilities to invest in more diverse, resilient, and decentralised infrastructure. Add to this rising construction and financing costs, increasingly ambitious environmental standards, and the pressing need to decarbonise—and the pressure on water utilities has never been greater.

All of this raises a core question: Can Australia’s current water policy and economic regulatory model withstand the forces reshaping the sector—and, more importantly, should it?

For decades, the Australian approach has been defined by clear institutional separation between policy, regulation and service delivery. Our corporatised, monopoly utilities—governed by principles of full cost recovery and regulated via independent economic reviews—have delivered stable, efficient services. But today’s realities are testing this model in ways it wasn’t designed to handle.

Short regulatory cycles struggle to accommodate the long-term nature of major capital investment. Population growth and climate volatility are making past demand forecasts obsolete. Government reluctance to approve significant price increases is creating a widening gap between what services actually cost and what customers are asked to pay. Meanwhile, expectations are shifting—customers increasingly see water services not just as a utility, but as a foundation of liveability, equity, and environmental health.

So where does that leave us?

Is the current model adaptable enough to evolve with the times, or do we need to fundamentally rethink how we price, regulate and invest in urban water? Should there be greater flexibility in how utilities recover costs and invest in the long-term? Is there a role for more private investment—or even a greater role for government as direct funder of public-good outcomes? And perhaps most importantly, how do we bring customers and communities along for this journey?

These questions don’t have simple answers. But avoiding them won’t help us meet the challenges ahead.

That’s why we’re hosting a vital panel discussion at the upcoming Australian Water Association Ozwater’25 conference. This session will bring together voices from across the sector—policy, regulation, and utility leadership—to unpack the big-picture questions shaping the future of water in Australia. The discussion will challenge assumptions, highlight tensions, and seek fresh perspectives on what needs to change—and what should be preserved.

Panel session: How do we pay for water services in the future?
Chair: Chris Olszak
When: 4.05pm ACST, Tuesday 20th May 2025
Where: Riverbank Room 6

This is more than a policy debate—it’s a conversation about how we ensure access to safe, reliable, affordable and sustainable water services for all Australians, now and into the future.

We invite you to attend the session, share your views, and help shape the future of water regulation in Australia.

🗣️ Join the conversation now on LinkedIn:
Are we asking the right questions about how we fund and regulate water? What do you think needs to change?

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