Australia’s best policy practitioners and decision-makers know the benefits of drawing on overseas lessons and adapting them to the local context.
Not only is it wiser but reduces the risk of unknown consequences when designing new policies for Australia if it’s already been tried and tested overseas with success.
But how to gain such knowledge? Knowledge that’s fresh, from the overseas country coalface, and not just ‘hearsay’ from a google ‘desk-top’ research project.
Churchill Fellows are a critical interface, providing untapped knowledge for leading policy and decision makers across Australia. Every year, talented Australians from all walks of life are awarded Churchill Fellowships to travel overseas and investigate inspiring and best practices that could benefit Australian communities.
The Policy Impact Program was developed by the Centre for Policy Futures at The University of Queensland and the Winston Churchill Trust with the aim of helping Churchill Fellows draw upon their knowledge in such a way as to best inform policy reform.
The program and its flagship publication, Policy Futures: A Reform Agenda, combines some of the best of the Churchill Fellows’ ideas and insights with the policy and governance expertise of the Centre for Policy Futures.
The articles feature the work of Churchill Fellows chosen by a selection committee of 10 highly esteemed members following a rigorous application process.
The Winston Churchill Trust CEO, Adam Davey, said the articles had the ability to play an important role in debate about areas of public policy relevant to the Australian experience.
“Perhaps the articles will inspire more public policy makers to consider opportunities such as Churchill Fellowships themselves, to further broaden their ideas and capabilities for the betterment of Australian society,” Mr Davey said
“An often-undervalued source of evidence lies in the knowledge of individuals who work at the coal face of particular problems and subsequently, for whom, the pathway toward effective and appropriate solutions seems most clear. Such individuals, with the right means to do so, can also prompt significant policy change.”
The inaugural issue of Policy Futures: A Reform Agenda, published in March 2021, focused on policy areas including justice, rights and empowered communities; sustainable cities and communities; quality education, good health and wellbeing; and science, technology and society.
The second issue, published in November 2022, looks at themes including Closing the Gap; health, aged care and wellbeing; human rights; and water.
Water banking for drought resilience
By Declan Page
Australia needs new options to improve regional water security as droughts become more severe and frequent.
Costs of emergency water carting would likely exceed $1 million per day for larger regional communities. Drought impacts tend to be most felt in Australia’s regional communities where they have a disproportional impact on agricultural industries. With one in seven Australian jobs dependent on farming, the economy relies heavily on agriculture.
Drought has been shown to significantly reduce agricultural profitability and productivity.
The total value of national welfare lost in the 2019–2020 drought has been estimated to exceed $63 billion. Irrigation water allocation prices have also skyrocketed during past droughts before declining to a small fraction of these high prices following the 2011, 2012 and 2017 floods.
Why water banking?
The principle of water banking is simple – the existing surface water right holders can forgo using some of their water allocation in a wet year, and instead, voluntarily transfer their allocation to a water bank. The unused water allocations are deposited into an aquifer allowing for the allocation to be carried over to future years. These carried over allocations (or recharge credits) can then be recovered as groundwater allocations later.
Water banking is like an underground off-stream dam with the advantage of minimal evaporation and can be used in regions where carryover in surface water dams is currently limited, like the northern Murray-Darling Basin. The higher value horticultural industries have not been established in these regions to date due to water security risks.
To establish water banking in these areas, investment in infrastructure such as recharge basins and recovery wells and monitoring will be required to further develop water accounting policy and methodologies.
Policy reform is needed to realise the benefits of water banking.
Consideration of the issues
Following the creation of the National Water Initiative in 2004 to increase the efficiency of Australia’s water use, water planning established transparent processes for determining how much water is available in a system and for sharing between people, industry, and the environment.
Creation of water entitlements, separate from land, provided secure long-term property rights to water for both consumptive users and the environment. And together, these developments provided the essential prerequisites for the current water trading and water markets.
Incentives to invest in water security
The average water price across the southern Murray Darling during the 2019–20 drought was $587 per megalitre, compared to the recent price of $154 per megalitre in 2020–2021.
By having the option to carryover unused water allocations across years in dams, irrigators in the southern basin can create a strategic reserve for themselves to buffer market volatility, all within the existing water management framework.
Establishment, funding, and operations
Water banking in aquifers complements dams by allowing for additional carryover across years.
However, aquifer storage has several distinct advantages over dams, including natural treatment, and minimal evaporation loss, algae, and mosquitoes. Pioneering water banking demonstration projects are needed that are well designed, monitored, and managed to provide evidence and confidence that water banking can be effective, has no third-party impacts, sustains the environment, and creates a basin-wide economic benefit.
Additional policy rules would require characterisation of aquifers to prevent localised decline of groundwater levels, water quality deterioration, and interference between any nearby water banking schemes.
Policy Recommendations
It is recommended that state governments undertake a three-stage process towards a unified national water banking system:
- Carryover and transfers between surface water flows and groundwater storage: Develop policy to allow the carryover of unused surface water allocations via water banking with secure title to recover the water under clearly specified rules and conditions. Develop a transparent accounting system that extends from current practice to verify banking operations.
- Establish demonstration water banks: Allocate funding to validate several water banking sites and undertake preliminary field investigations. For promising sites, form alliances with local water entitlement holders, state government and the community. Build the recharge infrastructure to establish pioneering water banking demonstration sites and operate allowing sufficient time for recharge and recovery to occur, document the costs, address risks, and prove that no adverse third-party impacts occur.
- Scale up: Use the demonstration water banking sites to report on the hydrologic and economic effectiveness, risks, and any impacts. Use these learnings to develop additional models to invest in water banking infrastructure and scale up across other jurisdictions.
The full policy articles for these Churchill Fellows along with others feature in Policy Futures: A Reform Agenda Issue 2, launched in the Churchill Policy Room at Parliament House on November 30. Learn more, receive a copy or request a policy presentation by our Fellows.
