Australia faces rising water bills, higher taxes or a decline in service quality unless it takes steps to reform its urban water, a new report warns.

According to the Infrastructure Australia report, water bills could more than double by 2040 if no action is taken, making a typical residential water and sewage bill in excess of $2500 in today’s money.

The report recommendations include privatising urban water assets and moving to a national regulator.

Infrastructure Australia Chief Executive Philip Davies says 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.

“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,” he says.

Davies says 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,” he says.

“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.”

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

1. The Australian Government should 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. 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. 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 infrastructureaustralia.gov.au.