Securing the future of town water funding

The Minns Labor Government is continuing to build a better New South Wales, with a system overhaul set to improve water affordability, availability and reliability across our regions.

Over the next two years, the NSW Government will explore a new funding model for local water utilities (LWUs) to address critical inefficiencies with the current system of project-based capital grants.

The reform is part of the highly successful Town Water Risk Reduction Program, which recently received a $15 million boost to help improve delivery of water and sewerage services in rural and remote towns.

In 2023, the NSW Government called for a Review of Funding Models for Local Water Utilities to investigate new models that could help reduce service risks without privatisation or forced amalgamations.

The NSW Government can now unveil its response to the Productivity and Equality Commission’s report, launching a new plan to reform the sector by 2027.

Key areas of reform include:

• Improving cost-of-living support through a review of the customer affordability and hardship programs funded directly by the NSW Government.
• Implementing a better funding model that gives the state’s 92 LWUs greater long-term financial stability and directs government funding to where it is most needed.
• Establishing basic levels of service through sector reform.

The plan was developed following extensive consultation with LWUs, water agencies and industry partners.

We will continue to work closely with the sector, particularly LWUs in Western NSW, to co-design ways that they can operate most cost effectively, reduce risks, and deliver better services to customers.

For more information visit: Local water utility reform

Minister for Water Rose Jackson said:

“The Minns Labor Government is committed to ensuring every person in NSW always has access to high-quality drinking water and wastewater, no matter what postcode they call home.

“This work builds on the $32.8 million for the Town Water Risk Reduction Program to tackle the most severe risks to town water, now we have a plan to safeguard the cost of service delivery.

“The previous funding model put our most remote communities at a disadvantage, where the economics of a small customer base servicing a huge land area just don’t add up.

“This plan provides a roadmap to direct government funding where it’s needed most and lock in the future of town drinking water in every corner of NSW.”