Water security and resilience

The Town Water Risk Reduction Program’s (TWRRP) aim is to support Local Water Utilities (LWUs) to reduce risks in town water systems for regional NSW communities.

TWRRP Phase 1 was successfully completed in December 2022 and TWRRP Phase 2 was subsequently announced.

TWRRP Phase 2 outcomes include:

• Skills and Training - Address critical skills shortages and boost water operations training and employment opportunities in regional NSW for school leavers, Aboriginal and First Nations students and existing water operators, in partnership with Training Services NSW.
• Advanced Operational Support - Deliver a new program in partnership with NSW Health to help optimise the performance of high-risk water treatment infrastructure so that more regional towns have reliable, resilient, and safe water services.
• Enable local water utilities to accelerate responses to audits to improve local dam safety and address water quality risks, leveraging the systems and expertise of WaterNSW.

TWRRP Phase 2 results for the 2023-24 financial year include:

• Advanced Operational Support program has completed 8 technical specifications documents of online monitoring upgrades and 10 Operational Improvement Opportunities plans for high risk LWU’s.
• Skills and Training have progressed all 9 actions under the skills and training action plan and delivered a successful water industry showcase day that resulted in 4 new trainees.
• The NSW Productivity Commission is progressing its consultation and analysis on alternative funding models for LWU’s.
• 8 councils have requested 5 – yearly dam risk reviews to be conducted by WaterNSW.
• 15 high priority councils

The program has been well-received by the sector and there is a desire to see it expanded. TWRRP was described as ‘the most welcome program in the last few years’ and ‘very beneficial’ in submissions received through the Joint Select Committee Parliamentary Inquiry – Protecting Local Water utilities form Privatisation – published in March 2024.

In May 2024, Phase 2 of the Town Water Risk Reduction Program (TWRRP) was approved for extension until June 2025.

In November 2023, the Minister for Water requested a review by the NSW Productivity and Equality Commission (PEC) to identify sustainable, efficient, and equitable approaches for reforming state funding for Local Water Utilities (LWUs).

The PEC report was released in mid-2024 and contained a set of recommendations for the NSW Government to consider. The findings and recommendations were informed by 42 public submissions, and a series of roundtables and targeted consultations on the PEC’s Issue Paper.

The PEC emphasises the need to improve the targeting and predictability of NSW Government funding for LWUs, compared to the current capital/project-focused funding model. This is to ensure the sector adequately addresses the current challenges in delivering safe, secure, and affordable services, now and in the future.

The PEC recommends significant changes to how LWUs are funded and associated improvements to regulation and strategic planning. It recommends:

• Developing a LWU Funding Policy, including a Community Service Obligation (CSO) funding mechanism to support delivery of basic levels of service for LWUs that cannot recover the cost of efficiently delivering such services from revenue that can be reasonably raised from its customers (based on their ability to pay), developers or other own source revenue.
• Making improvements to regulatory standards and strategic planning requirements and coordination to facilitate the setting of efficient basic levels of service and the identification of efficient solutions to deliver them, resulting in efficient and well-targeted funding support.
• Establishing a Sector Priorities Plan, setting out the NSW Government’s funding priorities for the LWU sector over the short to medium-term (2 to 4 years) based on well-coordinated strategic planning across the LWUs, regional and state level.
• Reviewing delivery and structural models for water supply and wastewater service provision in western NSW.
• Reviewing support schemes to address customer affordability, hardship and financial emergencies, including current pensioner rebates in regional and metropolitan areas, with a view to establish targeted schemes that are fully funded by government.

The NSW Government will develop and publish a response to the PEC’s recommendations, informed by consultation with the  LWU sector.