Priority 1

Key challenges and opportunities

Recent reviews of water management within NSW and across the Murray-Darling Basin have identified diminished public trust in governments to deliver good long-term water management policy and support rural and regional communities.

These reviews identify the need for the water sector to be more transparent and accountable. This includes having clear evidence underpinning how and why decisions are made, and ensuring that this evidence is available to - and can be understood by—customers, stakeholders and the broader community (Department of Planning, Industry and Environment, IPART Price Submission - Stakeholder Engagement, February 2020). Reviews have also highlighted the need for 'a single source of truth' about water management and for this information to be easily accessible to the public.

There are more than 35,000 water licence holders across NSW and hundreds of thousands of landholders with a basic landholder right to take water for domestic and stock purposes. The Government engages with these licence holders through regular newsletters, communications and alerts. In addition, there are engagement forums for customers and stakeholders, including Customer Advisory Groups, River Operations Stakeholder Consultation Committees and broader river planning stakeholder groups in each valley, as well as Environmental Water Advisory Groups in some valleys.

Water management is complex and involves many agencies and all three levels of government. This complexity, along with the scope of reform in water management in NSW, means that water users and stakeholders are being consulted on multiple, and at times overlapping, government initiatives. This has led to instances of confusion, frustration and ‘consultation fatigue’. It also leads to a perception in the community that water agencies are not ‘joined up’ or working together.

While NSW and Australian water managers are improving the transparency of water information, there is still more work to be done to support effective water markets and give the community confidence that the rules are fair and compliance is being monitored and enforced.

The NSW Government acknowledges the importance of better communication with, and the more effective involvement of, all stakeholders in water management decisions and water resource planning. This includes Aboriginal communities, environmental groups, industry, local government and the broader community. We recognise that these diverse water users need access to reliable and timely information to make informed decisions on business and investment risk, and to participate in the water market.

We continue to improve how we consult on water-related projects, reforms and strategies and we are committed to making clear and concise information about water sharing and management easy to find and understand.

What communities want

In recent years, the Department of Planning, Industry and Environment has consulted extensively with communities across NSW on a range of water-related projects and reforms, including the development of water sharing plans and water resource plans, metering reforms, floodplain harvesting policy, environmental water management, the drought response and regional water strategies.

The department reviewed more than 1,300 consultation and engagement activities undertaken over the last four years to better understand community expectations for water management activities. Four themes were identified, centred around the need for better quality, easier to understand and more timely information, and a fair and consistent compliance and enforcement regime.

The four themes and key priorities identified by stakeholders are:

We also know that water users expect public consultation on major policy changes to the water management framework in NSW. Customers expect that changes to rules which affect water access will be subject to meaningful consultation.

Improve collaboration and engagement with communities

The NSW Government will continue to improve its approach to collaborating and engaging with communities by placing communities at the centre of decisions about water service provision.

We will work to build a trusting partnership with water users and the broader community using the following principles so that engagement is:

• purposeful to deliver outcomes with a clear understanding of what all parties want to achieve
• inclusive to enable the participation of all relevant stakeholders
• timely to provide enough time for meaningful consultation and in an efficient manner
• transparent to enable meaningful participation and set clear expectations around how participants’ input will inform outcomes, including publication of what we heard and what action will be taken
• respectful to acknowledge the needs, experience, perspective and expertise of participants.

A critical foundation of this partnership is for government departments and agencies to become much better at explaining complex water management technical and regulatory concepts in plain English so that the model for water management, and the obligations of individuals within the system, can be understood clearly and easily by everyone. Our job and our challenge is to put ourselves in the shoes of our stakeholders and provide the best possible engagement experience.

Make water data and information open, transparent and easy to find

Open, transparent and accessible information is critical to building community trust in water management decisions and regulation. While the availability and transparency of water data has improved, more can be done to address community concerns about a need for greater transparency around how water is used and shared, and how water rights are held and traded.

An important new initiative in NSW is the WaterInsights portal that provides easy access to information about how water is managed and shared in NSW. It aims to help water customers to make more informed water resource planning decisions and to help communities and other stakeholders to understand what water is present in the system—in storage or in rivers or in aquifers. It explains the rules about how water is used, shared, traded and managed.

NSW has a number of public water registers that provide searchable information about water licences, approvals, water trading and environmental water. These registers can be improved to make them easier to navigate and provide more information and greater transparency about water and how it is being used, while protecting water users' privacy.

A number of public dashboards are also available on the Department’s website to make rules and water information more transparent. These dashboards provide information on water trade, allocations and use.

Through its Open Data Policy, the NSW Government is committed to making data available for use by the community, researchers, business and industry. There are opportunities to be more proactive in making available the government-held datasets that underpin water management in NSW.

Improve and expand water modelling capabilities

Water planning models help to inform most of the decisions in regional water management in NSW. These models use and produce extensive and detailed information on water availability and use across a range of climatic, development and regulatory conditions. This information could be used to great value in the wider community.

However, there is restricted access to this information (partly due to concerns about information that could be market sensitive) and limited broad understanding of how to correctly interpret this information. Providing greater access to water planning models and their outputs, along with explanatory materials, will help to unlock the value in these models and provide information that can help people and organisations outside government in their own understanding and decision-making around water management and use.

Departments, agencies, local water utilities and others rely on the information gained from different types of modelling to help them make decisions. Currently, different modelling platforms are used for different purposes, including:

• river system models for water planning
• river system modelling for operational decisions
• groundwater (hydrogeological) models
• floodplain modelling
• estuary modelling
• dam safety analysis (Probable Maximum Flood)
• water utility secure yield analysis models
• rainfall runoff models
• water quality models
• ecological models, including population models.

These models are developed on an as-needs basis, largely as standalone models to serve a one or more specific purposes. There is scope to link together these separate models and expand their purpose to answer a wider range of questions. There is also scope to provide public access to this data and the potential for open model access in the future.

Making the most of these models requires gaining acceptance that they are the best they can be with the available data and resources and that they conform with best practice guidelines and are subject to peer review and continual improvement. We will also need to design and implement new IT systems and governance arrangements to manage access to, and use of, models and modelled information.

Demonstrate that rules are enforced

Communities across NSW need to have confidence that water plans and rules are being followed and enforced, and non-compliances addressed. Actions taken through the NSW Water Strategy will improve trust and confidence in the water sector and the water management framework.

Building an effective and trusted compliance regime

The Natural Resources Access Regulator (NRAR) commenced operations in NSW on 30 April 2018 and has responsibility for enforcing water management legislation. The NRAR assists water users understand their obligations, actively monitors compliance with water plans and rules, and takes appropriate enforcement action where water use and access rules are breached.

Water users across NSW have demonstrated that they want the certainty and social licence that widespread compliance brings and have embraced the NRAR’s work. However, confusion can persist with some water users. The regulatory regime is complex, and the NRAR has observed that water users are often unsure of their obligations, including the interpretation of water sharing plan rules or the conditions on water access licences.

Regulating floodplain harvesting

Floodplain harvesting is the last major component of water take proposed to be brought within the licensing framework provided by the NSW Water Management Act 2000.

To protect the environment and downstream water users from the impact of unconstrained floodplain harvesting, the NSW Government introduced the NSW Floodplain Harvesting Policy in 2013 so that this form of water take could be regulated within legal limits. The regulation of floodplain harvesting will be given effect through amendments to relevant water sharing plans and the Water Management (General) Regulation 2018.

Implementation of the NSW Floodplain Harvesting Policy and the NSW Floodplain Harvesting Measurement Policy are essential to ensure that water taken in this way is accurately measured, fully accounted for, and regulated within legal limits.

Reviewing domestic and stock basic landholder rights

Domestic and stock rights are one component of basic landholder rights under the Water Management Act 2000. These rights allow landholders whose properties are next to a river or on top of an underground water source to take water for domestic and stock watering purposes without the need for a licence or approval (although an approval is required to construct a dam or water bore).

The use of these rights is largely unregulated. There is no limit on the volume of water that may be taken or guidelines about how the right can be used (other than the definitions of domestic consumption and stock watering provided for in s.52 of the Act). However, a basic landholder right cannot be traded.

Several reviews have pointed to regulating domestic and stock basic landholder rights as a logical next step towards improving water management in NSW. The 'Murray-Darling Basin Water Compliance Review' noted that these rights are often poorly understood and there is no requirement to report water take and no compliance program around the use of these rights. It recommended that all Basin governments ‘audit water take by stock and domestic and other rights holders to identify areas of stress on water resources from the exercise of these rights, and put in place measures to monitor compliance’.

The Independent Panel Assessment of the Management of the 2020 Northern Basin First Flush Event also recommended that NSW needed a better understanding of volumetric requirements for domestic and stock basic landholder rights so these can be factored into planning and preparation for such events.

Recent droughts have raised further issues around the way water is extracted and used under domestic and stock basic landholder rights during extreme dry periods.

Make sure that water take is measured

Measuring non-urban water take ensures we know whether water is being taken according to the rules. Fully accounting for this resource and ensuring everyone is playing by the rules will become even more important in a more variable and changing climate.

The NSW Government is taking a leadership role when it comes to improving the standard, coverage and transparency of measuring and monitoring non-urban water take. We will continue to demonstrate this leadership— giving water users and communities confidence
in water management and sharing arrangements across NSW.