The Concerned Waterways Alliance (CWA) has lodged a detailed submission to the Productivity Commission’s National Water Reform 2026 Inquiry. This process will help shape the next phase of Australia’s water governance framework, and it comes at a time when the condition of southern Victoria’s rivers, wetlands and aquifers continues to decline.
An important national water inquiry
Australia’s water reform framework has its foundations in the 2004 National Water Initiative. While it established important principles, progress has been uneven and, in some areas, has stalled or reversed.
From a Victorian perspective, the situation is increasingly difficult to ignore. Inflows to southern Victorian catchments have declined by up to 20% over the past two decades, while many rivers remain over-allocated and flow-stressed.
At the same time, new pressures are emerging. These include cumulative interception from farm dams and plantations, contamination risks such as PFAS, and a step-change in industrial water demand from hyperscale data centres.
This inquiry provides a rare opportunity to address these issues in a coordinated, national framework.
A system in need of reform
Our submission draws on years of engagement across policy, planning and regulatory processes. Its central finding is that the current system is not keeping pace with the scale of change occurring in our catchments.
Key failures identified include:
- Sustainable diversion limits that do not reflect climate-adjusted inflows
- Weak compliance and incomplete water accounting, particularly for farm dams
- Absence of regulation for plantation forestry interception
- Inadequate national standards for contaminants such as PFAS
- Governance frameworks that have not adapted to emerging large-scale water users
Unfortunately these are symptoms of a fragmented system, treating impacts to our waterways as separate issues rather than viewing them as culmulatively degrading connected ecological systems.
A different way of thinking: rivers as living systems
A central theme of the submission is the need to adopt the Single Living Entity concept as a governing principle for water management.
This approach recognises waterways as whole, integrated systems from headwaters to estuaries, including floodplains and connected groundwater. It reflects both contemporary ecological science and longstanding Traditional Owner knowledge.
The submission argues that many current policy failures, whether in diversion limits, interception, or infrastructure decisions, stem from the absence of this integrated perspective.
Embedding this concept at a national level would represent a structural shift in how water is governed.
Three immediate reform priorities
Looking forward, the CWA identifies three priority areas for the next phase of reform:
1. Climate-adjusted water limits
Water sharing rules must reflect measured declines in inflows and ecological requirements, not historical conditions that no longer exist. Nor should our waterways be subject to a disproportionate burden of lower inflow rates.
2. Full water accounting and independent compliance
All water use, including small dams and interception, must be measured, licensed and enforced by an independent regulator.
3. Governance for emerging industrial demand
Large water users, including data centres, must be subject to enforceable efficiency standards, transparent reporting, and pricing structures that do not shift costs onto households or the environment.
Maintaining the value of water: not an industry, but a public good
The submission also challenges how water services are framed at a national level.
Treating water as an “industry” risks importing assumptions about markets and efficiency that are not appropriate for a resource that is fundamental to life. The CWA argues that water should instead be understood as a human right and a public good, with governance systems designed accordingly.
This has direct implications for pricing, regulation, and investment decisions, particularly in a future where climate-independent water sources will be more expensive and more necessary.
Where to from here
The Productivity Commission inquiry is an opportunity to reset the trajectory of water reform in Australia.
For that to occur, the next phase of the National Water Initiative must strive to move beyond voluntary commitments and fragmented implementation by State governments. It will require:
- Binding obligations
- Independent oversight
- Properly resourced compliance
- Genuine inclusion of community knowledge
- And a governance framework capable of managing cumulative impacts across whole catchments
Southern Victoria’s rivers are illustrating the consequences of delay. Reform needs to move quickly and decisively to change that trajectory.