Many challenges facing the Queensland urban water sector are common internationally, including the call for industry reform. QWRAP research report 2 reviewed water reform in Australia and in OECD and G20 countries and compared the reasons given for changing institutional arrangements. While issues such as water quality, water security, compliance, customer service, skills shortages and the need for better integrated planning were important in many jurisdictions, two drivers were virtually universal.
The two key triggers for reform were: the need for greater expenditure on infrastructure, and a desire for financial savings expected from predicted efficiencies. In other words, the most common reason for restructure was a lack of funds to maintain increasing service expectations, particularly where many older assets were nearing the end of their useful lives. All of the drivers identified were relevant to regional Queensland. In particular, the need for better infrastructure investment and efficiency savings in order to maintain affordability are concerns emerging for many Queensland Water and Sewerage Service Providers.
While there is no simple solution to the growing challenges around improving and renewing water and sewerage services, the QWRAP research summarised lessons from other jurisdictions that reduce economic burden on current and future communities. Most commonly, benefits were gained through regionalisation of services, an approach common across OECD and G20 countries via joint outsourcing, selection for economies of scale, joint entities and collaboration among neighbouring local governments. Even where distant communities cannot be connected by physical infrastructure, regionalisation has been repeatedly shown to reduce costs, spread the impact of major investment, offset capacity deficits, and create economies of scale in investment, communications and strategic planning. Not surprisingly, regional-scale, local government-owned corporations were the most common product of water reform internationally.
In contrast, in countries where privatisation (i.e. private ownership) was trialed it has often failed. The lesson learned from national reviews and QWRAP research is that privatisation is not the answer for Queensland. However, neither is the status quo sustainable. Consequently, QWRAP is continuing work with self-selected regions across the state to determine the best model for local communities and avoid top-down imposition of reform that is not fit-for-purpose for the diverse and dispersed Queensland urban water sector.