The State Treasurer asked the Economic Regulation Authority (Authority) on 2 April 2009 to undertake an inquiry into water resource management and planning charges.

In accordance with the Terms of Reference, the Authority is to provide the Government with a range of options and recommendations for:

• the recovery of the water resource planning and management expenses incurred by the Department of Water; and
• the most appropriate regulatory arrangements for the setting of service standards for the water resource manager, the setting of the charges and the subsequent recovery of those charges from water users.

• the tasks or activities undertaken in the efficient management of the State’s water resources by the Department of Water, that would appropriately be recovered from water users;
• the most appropriate level of cost recovery from water users;
• and the most appropriate allocation of costs between licence holders and other water users.

The options recommended to the Government are to include:

• the implementation impacts for various types of users, including a sensitivity analysis on capacity to pay assumptions; and
• opportunities for implementation under both the existing legislative responsibilities of the Department of Water as well as those specified by the National Water Initiative.

The Authority is also required to have regard to:

• the Government’s social, economic and environmental policy objectives;
• the Government’s obligations as a signatory to the National Water Initiative Intergovernmental Agreement;
• and any relevant pricing principles arising from the 1994 Council of Australian Governments water reform agreement and the National Water Initiative.

The Authority has published an issues paper on 30 April 2009 to help interested parties understand the matters under review and to facilitate public comment and debate. Submissions on the issues paper are published on the Authority’s web site.

The Authority has also published a discussion paper on the principles that should be applied in determining how the costs of water resource management and planning activities should be recovered. The Authority invites submissions on the discussion paper from industry, government and all other stakeholder groups, including the general community. Submissions on the discussion paper are due by 31 August 2009.

The Authority will publish a draft report for further public consultation.

The final report for the inquiry is due to be delivered to the State Government by 2 January 2010, after which the Government will have 28 days to table the report in Parliament.

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