Promoting investment in the water sector

Australian governments are the primary investors, infrastructure owners and operators in the Australian water sector. Population growth, historic underinvestment in water infrastructure, water security, climate change and increasing environmental and public health regulation mean that considerable investment in the sector is needed in the future. Significant capital expenditure is required to renew ageing assets and expand networks. Given the challenging fiscal environment for governments in the short to medium term, now is an opportune time for governments to consider where public investment in the water sector is most needed, where efficiency gains can be made and whether additional private investment in the sector could usefully free up current public investment for application in other sectors such as health and education. This paper examines a number of the regulatory barriers to greater private sector participation in the sector. It includes a set of recommendations to governments to facilitate increased private sector investment in the short term and broader reform in the medium to long term