Water bills could more than double by 2040 unless steps are taken to reform Australia's urban water, Infrastructure Australia Chief Executive Philip Davies has warned.

Releasing the latest paper in Infrastructure Australia's reform series today, Mr Davies said fundamental changes must be made to the governance and regulation of Australia's urban water markets.

“Unless we act now, we will soon start to experience rising water bills, high taxes or a decline in service quality,” Mr Davies said.

Modelling commissioned by Infrastructure Australia shows that without action a typical residential water and sewerage bill could be higher than $2,500 in today's money by 2040.

The urban water sector has a strong track record of providing clean and safe water to more than 20 million people. But the ageing infrastructure which it relies on is costly to maintain and is being put under further strain by climate change and our growing and changing cities.

“If Australians want continued access to safe, reliable and affordable water in the future, we need to begin a staged approach to reforming the sector now—starting with a new national urban water reform plan,” Mr Davies said.

Mr Davies said that while reforms of this scale will take time to be rolled out, it is important that our governments get on with the task of initiating reforms now.

“Across Australia many of our dams are relatively full, which gives us a rare window of opportunity for clear thinking and long-term planning to meet our future needs.”

While other forms of infrastructure have moved away from a system where governments own, regulate, and set policies, urban water has been left in the past.

“Now is the time for governments to get on with the job of bringing urban water policy, regulation and governance up to speed so that it can meet the changing needs of Australians in the twenty-first century,” Mr Davies said.

Infrastructure Australia has recommended a three stage approach to reforming urban water:

1. This first stage is for the Australian Government to establish a national reform pathway by the end of 2018, including agreeing to a new national urban water reform plan, establishing an independent national reform body and using incentive payments to drive reforms.
2. The second stage is to roll out nationally consistent reforms over the next five years. This includes refinements to regulation and governance in each state and territory, improvements to long-term planning and pricing frameworks, and enhanced collaboration between regulators.
3. The final stage is to consider further reforms over time, such as moving to a national regulator and privatising urban water assets.

The paper, Reforming Urban Water: A national pathway for change, is available for download at www.infrastructureaustralia.gov.au.