Managing New South Wales water resources relies on a range of legislation, initiatives and cooperative arrangements with the Commonwealth and other state governments. The key piece of legislation for the management of water in NSW is the Water Management Act 2000.
Water Management Act 2000
The object of the Water Management Act 2000 is the sustainable and integrated management of the state's water for the benefit of both present and future generations.
The Water Management Act 2000 is based on the concept of ecologically sustainable development – development today that will not threaten the ability of future generations to meet their needs. The Act recognises:
- the fundamental health of our rivers and groundwater systems and associated wetlands, floodplains, estuaries has to be protected
- the management of water must be integrated with other natural resources such as vegetation, soils and land
- to be properly effective, water management must be a shared responsibility between the government and the community
- water management decisions must involve consideration of environmental, social, economic, cultural and heritage aspects
- social and economic benefits to the state will result from the sustainable and efficient use of water.
The Water Management Act 2000 recognises the need to allocate and provide water for the environmental health of our rivers and groundwater systems, while also providing licence holders with more secure access to water and greater opportunities to trade water through the separation of water licences from land. The main tool in the Act for managing the state's water resources are water sharing plans. These are used to set out the rules for the sharing of water in a particular water source between water users and the environment and rules for the trading of water in a particular water source.
Regulations, proclamations and orders under the Water Management Act
To assist in implementing the provisions of the Water Management Act 2000, regulations, proclamations and orders are also made.
Regulations under the Water Management Act
The key regulation made under the Water Management Act 2000 is the Water Management (General) Regulation 2018.
The regulation provides for Strahler stream order to be determined for the purposes of the regulation by reference to a stream order database which is published on the department’s website.
A Regulatory Impact Statement (PDF, 417.66 KB) was prepared during the latest review of the regulation which included a review of the objectives, options, assessment of costs and benefits, and the outcome of public consultation.
Proclamations under the Water Management Act
A range of proclamations have been made which commence the licence and approval sections for water sources following the commencement of the relevant water sharing plan.
The Minister can publish orders to implement specific details of an Act. Orders are published in the NSW Government Gazette on the NSW Legislation website
The Access Licence Dealings Principles Order 2004 provides detail and clarity for dealings permitted under the Water Management Act 2000 and in relevant water sharing plans.
The Department makes regular water allocation announcements which are given effect by a statutory available water determination order. These are issued on 1 July and periodically throughout the year.
Significant decisions involving discretion made under the Water Management Act
NSW makes a number of significant water management decisions under the Water Management Act 2000 that involve discretion.
To provide greater transparency and accountability of water sharing and extraction arrangements, a reporting framework (PDF, 129.93 KB) has been developed for identified significant water management decisions involving discretion, including how and when reporting will occur.
Water Industry Competition Act 2006
The Water Industry Competition Act 2006 (WIC Act) aims to encourage private-sector investment and innovation in the supply of water and sewerage services and to facilitate private sector delivery of recycled water infrastructure.
To do this, the WIC Act sets up a licensing system for private water utilities that allows them to operate in NSW but ensures that they do so in a way that protects public health and safety, consumers and the environment. The licensing system is administered by the Independent Pricing and Regulatory Tribunal (IPART).
The Act also establishes a regime for third-party access to certain water infrastructure services in NSW. This part of the Act is administered by the Treasurer.
Currently there are 20 schemes that provide 10,000 customers with drinking water, recycled water or sewerage services.
The private water industry plays an important role in demonstrating and delivering sustainable and resilient water services. In 2022-23 the private water utilities in NSW delivered 5,000 ML of recycled water and 90 GL of desalinated drinking water. The NSW Government supports the greater use of these rainfall independent water sources in the Greater Sydney Water Strategy and the Lower Hunter Water Security Plan to secure water for the future.
Changes to the Water Industry Competition Act
In 2012, the Government commenced the 5-year review of the WIC Act to ensure that the objectives of the Act were being realised. This review included targeted consultation with the private water industry, public water utilities, councils, consumer groups and other NSW Government agencies. Following the review, Parliament assented to the Water Industry Competition Amendment Act 2021. The Amendment Act makes major changes to the WIC Act, which were commenced on1 March 2024. These changes include:
- operators and retailers will be issued with state-wide licences and schemes will be subject to scheme and operational approvals
- new provisions for last resort providers to ensure essential services continue if a private water utility fails financially
- better targeting of regulation to focus on high-risk schemes
- strengthened customer protections, including the introduction of a standard customer contract
- scheme applicants will need to establish that they can service the scheme’s proposed area of operations in a reasonable time and consider if the area can reasonably service adjacent properties.
These changes will result in a targeted licensing framework, streamlining approvals and licencing to create a more agile business environment for the industry while balancing public health, customer and environmental protections.
Current WIC licensees have a 12-month period to transition to the new licencing regime.
- Find out more information about the changes to the WIC Act (PDF, 102.31 KB).
Regulations under the Water Industry Competition Act
The Water Industry Competition (General) Regulation 2024 (WIC Regulation) has been remade to support the changes to the WIC Act.
The department undertook a 10-week public exhibition of the draft WIC Regulation and Regulatory Impact Statement in 2022 and further targeted consultation during April to June 2023. Download a report that summarises how the department considered stakeholder feedback (PDF, 315.34 KB).
The WIC Regulation specifies which types of schemes are regulated by or excluded from regulation under the WIC Act. This includes requiring certain new metropolitan council water recycling schemes, which are deemed to be high-risk, to obtain WIC Act approvals. It also sets out the standard customer contract, as well as last resort contingency planning requirements, and standard licence conditions.
The other regulation under the WIC Act is the Water Industry Competition (Access to Infrastructure Services) Regulation 2021, which is administered by the Treasurer.
NSW Private Water Scheme Pensioner Rebates
The NSW Government provides pensioner rebates to eligible residential customers of private water schemes licensed under the Water Industry Competition Act 2006 to help pay their water and sewerage bills. Further information about these rebates, including how to apply, can be found at NSW Private Water Scheme Pensioner Rebates.
The key piece of Commonwealth legislation relating to water is the Commonwealth Water Act 2007. Schedule 1 of the Act contains the Murray-Darling Basin Agreement, which the NSW Government is party to.
The Commonwealth Basin Plan 2012 was adopted under the Water Act 2007. Water resource plans are a key requirement of the Basin Plan 2012.
There are 20 water resource plans required to be developed in NSW and each plan varies in the number of resources, their level of development, number of environmental assets, and geography affecting the way the rivers are run in each area.
Delivering Water Resource Plans for New South Wales
Water resource plans will set out arrangements to share water for consumptive use. They will also establish rules to meet environmental and water quality objectives and will take into account potential and emerging risks to water resources.
NSW water resource plans will meet the minimum requirements of the Commonwealth Water Act 2007 and Basin Plan. Each water resource plan must:
- Describe all water rights in the plan area.
- Demonstrate how compliance with the Sustainable Diversion Limit (SDL) prescribed in the Basin Plan will be assessed and maintained.
- Include a Water Quality Management Plan.
- Provide for environmental watering.
- Address risks to water resources identified in a risk assessment.
- Explain how essential human needs will be met in extreme events.
- Take account of Aboriginal people’s water dependent cultural values and uses.
All of the water resource plans will include references to the relevant NSW water sharing plan(s).
The NSW Government has always advocated for a true triple-bottom-line approach to the Murray-Darling Basin Plan, which balances economic, environmental and socio-economic concerns, and puts local communities first.
The development of the NSW water resource plans adheres to these fundamental principles, with stakeholder and community consultation at the forefront.
This included the opportunity to comment on each water resource plan's Status and Issues paper and each draft plan. Targeted consultation was undertaken with Stakeholder Advisory Panels (SAPs). All of the water resource plans were also placed on public exhibition.
For further information refer to Water Resource Plans - Murray-Darling Basin Authority