CASE PROGRAM 2008-65.1

Queensland’s Home WaterWise Rebate Scheme (A)

In 2006, the sixth successive year without significant rain, the residents of ’s fastest growing region confronted the realities of the worst drought in 100 years. South East ’s five main storage dams, which had been 90 percent full of water in 2000, were now just over 20 percent full. Even the giant Wivenhoe Dam, until recently being used to supplement supply to the Gold Coast, was running low, and if usage continued at the current rate, would be empty within two years. The State Government faced some urgent decisions.

The water agenda

Water had been a priority item on the Queensland agenda since the election of Premier Peter Beattie in 1998. As well as taking part in the Council of Australian Governments’ National Water Initiative, in 2000 the Queensland Government passed the Water Act. This introduced a new, whole-of-catchment approach to planning, and required the preparation of Water Resource Plans which considered the impact on ecosystems and security of future supply. Fundamental principles of the Water Act included the efficient use of water, including demand management, and water conservation, including recycling.

In 1999 the government and the Regional Organisation of Councils had jointly funded a study into Water and Wastewater Management and Infrastructure. The joint sponsorship reflected the fact that while the state owned most of the bulk water supply companies, each of the 18 local governments then responsible for the South East Queensland region played some part in the planning for, allocation, distribution, and management of water supplies. A workshop involving these stakeholders, as well as conservation interests and state agencies, led to the development of the comprehensive

This case was written by Janet Tyson, Australia and New Zealand School of Government, for Dr Anne Tiernan, Griffith University, as a basis for class discussion rather than to illustrate either effective or ineffective handling of a managerial situation. The assistance of Debbie Best, Terry Hogan, Kel Holmes, Jenny Menzies, Ken Smith and Paul Woodward is gratefully appreciated; however responsibility for the content lies with the author. Cases are not necessarily intended as a complete account of the events described. While every reasonable effort has been made to ensure accuracy at the time of publication, subsequent developments may mean that certain details have since changed. This work is licensed under Creative Commons Attribution-NonCommercial- NoDerivatives 4.0 International Licence, except for logos, trademarks, photographs and other content marked as supplied by third parties. No licence is given in relation to third party material. Version 24-09-2008. Distributed by the Case Program, The Australia and New Zealand School of Government, www.anzsog.edu.au.

South East Queensland Regional Water Supply Strategy (SEQWRSS). This fed into the Queensland Water Plan 2005-2010.

The objective of the SEQWRSS was to provide strategic advice on options for regional urban, industrial, and rural supply, distribution and implementation to meet sustainable future needs.1

Hundreds of submissions about water issues were made to the Queensland Government before and after the Water Act was passed. Almost all the submissions related to the need for water planning for irrigation in rural areas, where rainfall was traditionally more variable. By the time the Act was passed, experts had some concerns about the future of urban water supplies, where temporary restrictions and new infrastructure had in the past been sufficient to manage any problems. If it didn’t rain one summer, past experience said it would rain the next, or the one after that.

Terry Hogan was Director-General of what was then known as the Department of Natural Resources and Mines, responsible for the science and strategic planning of water and land resources for Queensland. As the Water Act was being developed, he and his Department found that “it was becoming increasingly obvious that it would be quite unreliable to use the historical records of 140 years or so to predict future rainfall. Current rainfall patterns were all over the place.”2

Within the Department, people began to talk about the previously unthinkable: drastic demand reductions and the recycling of sewage to a quality where it could be used for drinking.

Failure of the wet season

For the people of subtropical South East Queensland, the usual problem with water was having too much of it – tropical downpours, flooded rivers and inundated towns and cities. Coastal areas of the state had not suffered drought in recent memory, while many citizens of Brisbane recalled the floods of January 1974 that submerged large parts of the city. In part as a protection against future floods, the Queensland Government built the massive Wivenhoe Dam which by 2004 could hold 1,160,000 megalitres,3 or 2000 times the daily requirements of the city of Brisbane.

Together with the adjacent Somerset Dam, the Hinze/Little Nerang, Baroon Pocket and North Pine Dams, as well as the North Stradbroke Island bore field, South East Queensland could store and access 650,000,000 megalitres of potable quality water per year.4

Typically, an average of at least 2000 mm of rain refilled the dams each year during the wet season from November to March. This regular heavy rainfall allowed the state’s residents to rely on storage dams for their water supply. Few people maintained an independent water supply, and older residents could remember when, in the 1960s, health

1 South East Queensland Regional Water Supply Strategy Stage 1 report (hereafter SEQWRSS). Downloaded from http://www.seqwaterstrategy.qld.gov.au/projects/seqwrss_stage1_1.pdf on 7 February 2008. 2 Interview, Terry Hogan. 3 One megalitre (ML) is equivalent to a million litres. 4 SEQWRSS p17

2 authorities demanded and sometimes legally enforced the removal of urban rainwater tanks because they hosted malarial mosquitoes.5

In 1999-2000, for the first time in living memory, the wet season did not arrive. Very little rain fell in subsequent years. By 2004, when Queensland signed the National Water Initiative, which aimed to standardise and rationalise water planning and management through pricing and other mechanisms, the southernmost part of South East Queensland, the Gold Coast, was suffering the effects of prolonged drought. The Hinze Dam was draining rapidly, and local councils imposed water use restrictions. Plans for a small-scale desalination plant went on the drawing board.

But in most parts of the region, expecting the wet season to return as it always had, residents continued to enjoy limitless and low-cost access to water. Brisbane households using 250 kilolitres per year paid an annual water bill of $438.6 They hosed down footpaths and driveways, washed their cars and filled their swimming pools; they kept their lawns lush and green, and grew thirsty exotic plants like roses in their garden. NRW calculated that between 30 and 50 percent of an average household’s water use was “outside the house”, for the pool or the garden.

Stage 1 of the SEQWRSS report was published in 2004. It showed that while average consumption had dropped, total consumption was increasing, fuelled by rapid population growth. Sixty-four percent of the state’s 4,100,0007 population lived in South East Queensland. The 22,420 square km area, centring on the state capital of Brisbane, stretched from Noosa and the Sunshine Coast in the north to the Gold Coast adjoining the New South Wales border in the south, and west to . Since the mid-1990s, new residents had been arriving in Queensland at up to 1700 a week. The region regularly featured as the fastest-growing in Australia. The state population clock displayed near Brisbane airport was ticking over by nearly 90,000 a year; south-east Queensland’s population, already 2.8 million, was projected to reach 4 million by 2026.8

Demand and supply

In 2000-01 South East Queensland urban water usage was 395,000 megalitres per year. Based on population and industrial growth, it was expected to reach 560,000 megalitres by 2021.9

While demand was clearly growing, the SEQWRSS report warned that it was no longer wise to use historic calculations to estimate water availability, and that the possible effect of climate change should also be considered. Because of this and other new data, the

5 Posting by Jeremy Bentham of Brisbane 9.12 am June 15 2007 referring to the letter “sent to my late father in 1963 threatening him with prosecution unless he ‘removed the redundant and unnecessary water tank as it is a mosquito threat’” http://www.news.com.au/couriermail/comments/0,23836,21906535-3102,00.html downloaded 12 May 2008. 6 Residents in other local government regions could pay up to $600 for similar quantities of water. Source: Queensland Government: Direction for Retail Price Monitoring in the South East Queensland Urban Water Sector (2008) 7 In 2006 8 200,000 Extra people on the Coast by 2031, downloaded from http://www.thedaily.com.au/news/2008/sep/02/200000-extra-people-coast-2031/ downloaded 2-9-2008 9 Source SEQWRSS piii

3 report dramatically revised down the potential capacity of most existing and proposed dams.

“Based on existing urban demand patterns, existing SEQ sources will be fully utilised by approximately 2025,” the report said.10 In some locations, particularly the Gold Coast, additional resources could be needed by 2007. Initially these could come from the Wivenhoe Dam, where current demand was much less than its projected yield.

It was time, the report said, to consider what should be done in case of “droughts that are worse than those on historical record.”11

This would include making big reductions in demand for potable water, and planning for additional sources such as desalination and the use of recycled water in domestic supply. As only 25 percent of domestic water needed to be of potable quality, there was great scope for making change.

Over the past 10 years, the report pointed out, South East Queensland’s average consumption had been reduced by about ten percent, due to a combination of “WaterWise” initiatives such as user-pays pricing and universal water metering, restrictions on garden watering, encouragement of water-efficient devices and education.12 Too much of this saving was being cancelled out by ageing pipes and poor pressure controls. About 50 litres per person per day was leaking away as un-accounted-for water.13

With multiple water ownership and varying approaches to demand management, some areas were making more sacrifices than others, while it was impossible to convey clear messages. All savings initiatives, including any incentives for water-efficient devices such as rainwater storage tanks, would be better managed on a regional basis, the report said, proposing that $29 million be spent on a three-year demand reduction programme.

In May 2005, the people of Brisbane and the Sunshine Coast got their first taste of water restrictions. Level 1 restrictions, cutting back the time that residents were allowed to use hoses, were introduced. At the time average daily use per person was 300 litres.

In August 2005, the State Government announced it would take a lead role in water planning and management; in October Level 2 restrictions further limited the time that hoses and outdoor watering could be used. The Building Act was amended, so that all new homes must have water-efficient devices like smaller shower-heads, dual-flush toilets, and plumbed-in water storage tanks. The Water Efficiency Labelling Scheme was developed to rate appliances like washing machines for water efficiency. Approved washing machines and dual-flush toilets used only a third as much water as older appliances, saving in the case of a toilet around 1000 litres per household per year.

The worst drought in 100 years

As 2006 advanced, yet another wet season went by without any rain. South East Queensland was now experiencing the worst drought in 100 years, and its effects were

10 SEQWRSS v 11 SEQWRSS vi 12 SEQWRSS p22 13 SEQWRSS p35

4 beginning to bite. Levels in the Wivenhoe Dam were dropping rapidly. Lawns were turning brown and garden plants dying. Water use restrictions moved to Level 3, outlawing the use of hoses to wash cars or driveways; elderly residents complained bitterly about having to haul buckets of water to keep their gardens alive. The once-thriving horticulture industry was hurting badly.

The previously carefree mindset shifted abruptly, and residents were very worried. In the media and on internet blogs, water supply became one of the most contentious and most- discussed issues. Although most of the decision-making was still at local government level, citizens’ frustration was directed at the State government – not always fairly, according to Ken Smith. Smith was Co-ordinator General14 and Director-General of the newly established Department of Infrastructure, charged with developing new and integrated solutions to the water supply problems. He reflected:

“Unfairly people could say government should have predicted the drought situation. But any fair-minded person …would not have predicted the sort of dramatic changes and shifts that have occurred, [which] required us to completely recalibrate our response in terms of demand and supply…You [couldn’t] slightly move the levers, you had to rebuild the whole plant. It was a re-conceptualisation of the environment and what should occur as a result of that.”

In April, the Premier’s announcement of plans for a huge new storage dam to be built at Traveston Crossing, on the Mary River, in the hinterlands of the Sunshine Coast, sparked furious protest from groups ranging from local people indignant at funding population expansion to environmentalists concerned about the effect on rare wildlife. As the western – due to run out of water by 201315 - planned a referendum about topping up its water storage with recycled sewage, emotions for and against ran high.

At the same time, but far less prominently reported,16 Parliament was using provisions of Chapter 2A of the Water Act 2000 to legislate the establishment of a central water management authority for Queensland. The Queensland Water Commission came into being on 12 May 2006.

Incentives and penalties

As departments like NRW and Infrastructure conferred with the Premiers’ Department and Queensland Treasury about options for demand and supply management, NRW put forward proposals including savings incentives that could balance more punitive measures like usage restrictions, and patrols to catch excess water users. Incentive payments were already being used in Sydney, as well as some Queensland cities: Brisbane City Council had already instituted rebate payments of up to $750 for people to install rainwater tanks.

Queensland’s Cabinet operates an open briefing process, where submissions are lodged in advance and the Premier’s Department prepares briefing notes for the Premier to consider before a final version of the recommendation goes into the Cabinet bag, along with briefing notes. By the time Cabinet met, the Premier would have weighed up any concerns about the health implications of reinstating water tanks against compelling arguments for the

14 The Co-ordinator-General’s role was established in 1938 to ensure the efficient implementation of large- scale government projects source: http://www.dip.qld.gov.au/coordinator-general/index.php downloaded 19 September 2008. 15 SEQWRSS p 48 16 ‘Water reform in southeast long overdue,’ Editorial, Courier-Mail, 22 April 2006, p26.

5 need to change water use behaviours, and all departments would know how he had been briefed.

In mid-June, the Brisbane Courier-Mail reported: “…without serious rain or new water sources, the region could run out of water by September 2008. Local and state governments have blamed each other for not building infrastructure and managing a drought that has seen the Wivenhoe Dam lose 70 percent of its capacity in six years.”17

For the Queensland government, it was decision time. The response must be rapid, and agile, and it would be made in an environment where few of the past certainties could be relied on. The only prediction that could be made was that the government’s commitment to population growth to maximise the value of the fast-growing resource-based economy must inevitably mean an increasing, perhaps insatiable demand for water.

17 Thompson, T, ‘Water lord appointed’, Courier-Mail, 16 June 2006, downloaded from http://www.news.com.au/couriermail/story/0,20797,19480055-3102,00.html on 12 May 2008.

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