SA water sector faltering while Australia thrives

SA and Australia, countries with historical ties to the British Empire, face significant water management challenges. Despite common legal and parliamentary systems, the two nations diverge in their approaches to water sector governance, leading to markedly different outcomes in economic prosperity.

It is evident that contemporary SA is grappling with a scenario resembling a failed state, particularly evident in the breakdown of the electricity and water services sector. Why is the SA water sector faltering while its Australian counterpart thrives?

Addressing the collapse of the SA water sector, the origins can be traced back to the British Empire’s consideration of federalism during the Anglo-Zulu War. While federalism found success in Canada and Australia, it failed to take root in SA.

Fast forward to the present, SA operates as a unitary state with a centralised water policy and national water law. This leaves little room for local variation. The sector faces high levels of unaccounted-for water, leakages, and poor management.

The absence of justiciable water rights and the separation of water from land ownership hinder private sector involvement. Consequently, utilities are reliant on government bailouts, a situation exacerbated by failing water and electricity grids, the diminishing tax base and escalating unemployment.

Australia’s federal structure facilitates a diverse array of state policies and laws, promoting adaptability to local conditions. Boasting over 30 distinct water authorities, each tailored to meet local needs, Australia thrives on a justiciable water right system that allows private ownership.

Australia’s innovative and market-oriented approach has resulted in well-managed utilities with robust balance sheets. The ability to raise capital from the bond market reduces reliance on public funds for bailouts. Groundwater plays a vital role, accounting for about 40% of the total resource, while innovative technologies, such as seawater desalination, are embraced.

Contrastingly, in SA’s water sector, a lack of innovative approaches, coupled with a rigid, cookie-cutter methodology has stifled local imagination. The state’s hostility towards private capital has rendered the water sector generally uninvestable. While some large water boards still maintain strong balance sheets, the growing debt burden from non-payment by municipalities poses a threat.

Limited development of groundwater, coupled with a reluctance to replicate successful initiatives, further compounds the challenges. Seawater desalination, where it exists, is confined to small package plants in distressed municipalities along the coast.

Australia stands out for its innovative solutions. Building codes align with water conservation, ensuring rainwater harvesting and aquifer recharge are actively pursued.

The weakness of SA’s water sector lies in the highly centralised approach, resulting in ineffective, one-size-fits-all solutions. Local authorities often lack imagination, relying heavily on taxpayers and hinder innovation.