Is the National Water Commission an appropriate institutional and governance structure to address the fundamental requirements of the water and irrigation industry in Australia?

Abstract

The National Water Commission (NWC) and the $2 billion Australian Government Water Fund (the fund) has drawn attention to the need for innovative and adaptive practices for water use. The NWC and the fund, whilst a critical and catalytic step in the recognition of the current water situation in Australia, has thus far neglected to consider the systemic failures of the water, irrigation and related industries that led to this point. The underlying issue of the efficient allocation of water resources can be resolved by the harmonisation of competing demands (economic, social and environmental) and the establishment of governance structures to reduce institutional impediments. The linking of the fund to National Competition Council (NCC) payments is an important consideration in this process. This paper will argue that governance reform and institutional (re)alignment to remedy the impediments to the efficient allocation of water resources needs to be embedded in and linked to national competition policy principles. This paper will consider the NWC in this context with the aim of informing future policy to consider the systemic failures of the water industry and to forge institutional change for the more effective allocation of water.