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TRANSBOUNDARY WATER MANAGEMENTDistribution of Australia’s mean annual run-offSource: Water and the Australian Economy, April 1999Australia, like other countries, faces increasing pressures for waterto be made available for productive agriculture, economic growth,the growing needs of cities and the environment. Not only are thedemands on water resources escalating, but a changing climatemeans that in many regions there is less water to go around.Managing water and supply security in Australia is a sharedchallenge. It has many players, very different local circumstancesand no single government agency has sole authority.Unlike international transboundary water issues that focus onintercountry negotiations, Australia’s transboundary water issuesare domestic – but no less complex. Under Australian water lawsit is not the federal government that determines the conditions onwhich water is available for use, but the six state and two territorygovernments. Local government also has an important role in waterdelivery, stormwater and drainage, which increasingly feature inurban supply and demand management.Yet there are national imperatives for water management. Mostnotably in Australia, these have been to share physical waterresources among states, to protect nationally significant environmentalassets and to foster interstate water markets. Attempts toachieve these goals have been complicated by different legislativeand administrative arrangements between states, and by the differentcharacter of hydrological systems and water-dependent ecosystemsboth within and between states.Following the federation of Australia’s states in 1901, initialsteps towards intergovernmental cooperation on water resourcesfocused on developing water supply systems and increasing waterstorage capacity. By the 1980s, the limitations of this approach werebeing observed in many parts of rural Australia – with diminishingreturns on subsidized infrastructure, rapidly rising water extractionchallenging the capacity of water systems, and increasing andobvious environmental degradation.In the 1990s, environmental degradation saw a1,000 km-long toxic blue-green algae bloom in theDarling River system and increasing algal bloomsthroughout the whole Murray-Darling Basin.Increasing water demand was also contributingto rising water salinity, declining biodiversity andless frequent beneficial flooding in floodplains andsurrounding streams. Recognizing this, governingjurisdictions agreed to cap their allocations forconsumptive use from the system at 1994 levels. Thecap meant that new surface water demand could onlybe satisfied through trading. This important policydecision recognized that the limits of sustainabilityhad been overreached.This period was also marked by significant microeconomicreform in Australia and water became part ofthat broader appetite for national change. In 1994, allgovernments committed to the Council of AustralianGovernments Water Reform Framework, which wasdesigned to make water management more environmentallysustainable and economically efficient. Thekey elements of subsequent reforms were foundedin that agreement. They included recognition of thewater needs of the environment, handing irrigationsystems over to irrigators to manage, tradable waterrights, and the separation of the regulatory, policy andservice delivery functions of water authorities.In the 1990s the nation began to feel the effects ofwhat would become the 12-year-long ‘Millennium’drought, triggering a renewal of focus on effectivemanagement of Australia’s resources. In some communities,the drought came close to putting water for basic[ 62 ]