state of the water sector report 2014 presentation
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The Australian Water Association (AWA) and Deloitte are pleased to present the State of the Water Sector Report 2014. The Report is the only one of its kind, reporting on the trends and insights of water sector professionals about their own industry.TRANSCRIPT
State of the Water Sector
2014
2 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
Demographics
The State of the Water Sector Survey 2014 was open to all water professionals from 14 April 2014 to
19 May 2014. The survey was facilitated using the Deloitte online survey system, Qualtrics, and was
completed by 1,162 respondents.
3 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
4 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
The need to improve operational efficiency has been
articulated as the top issue facing the water sector, reflecting
the continued concern about the need to control costs and
demonstrate value for money within the sector.
Improving operational efficiency was identified as one of the
three most important issues by 46% of respondents, an
increase from 35% that identified it as a key issue in 2013.
Operational Efficiency
5 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
Water professionals were also focused on the need to place attention
on maintaining and augmenting infrastructure, which was ranked as
one of the top three issues by 45% of respondents. This was the top
issue in 2013 and 2012.
Maintaining and Augmenting Infrastructure
6 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
Ensuring secure water supplies was ranked third by 39% of
respondents as a current issue, and was identified as the top
issue in five years time by 41% of respondents.
Ensuring water supplies are secure
7 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
8 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• Water professionals identified the area of greatest concern in five years time as ensuring we
have a sustainable water supply.
• Although the sector believed the security of supply was being managed well, this shows the
acknowledgment of the challenges of increasing competing demands, climate change and
population growth.
Emerging Issues
9 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
Water Supply Options
• 84% of respondents at least ‘somewhat agreed’ that dams are an effective method of managing water
security within their region.
• 55% felt that there is scope for more dams to be built.
• 87% think there is capacity to use recycled water for drinking.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Desalination Water
Recycled Water
Urban Stormwater
Can be treated and managed to a level that is sufficient for safe and reliable potable supply?
10 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
Climate Change
• Climate change was identified as a significant or moderate risk to the sustainable management of water
by 86% of respondents.
• To address climate change the majority of respondents believed the water sector should;
- Focus on diversifying sources of water supply (67%)
- Ensure that systems can withstand extreme weather and events such as fire or flood (63%)
- Ensure asset management strategies account for longer term changes (57%).
Emerging Issues
11 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
12 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• In 2014 respondents were asked to nominate their top three priorities for reform in the water sector.
Water Reform, Economic Regulation and Water Pricing
0%
10%
20%
30%
40%
50%
60%
% Respondents
13 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
14 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• Water pricing remains a ‘hot topic’ in the industry. Although price rises in 2013 in most jurisdictions were
less than in previous years (Melbourne and Perth being exceptions) the industry is clearly concerned
about the public view’s on household water bills.
• In the 2014 survey, responding to community concern about rising prices was the fourth most frequently
identified issue, with 37% of respondents nominating it. This is a significant increase over the 25% of
respondents who identified it as an issue in 2013.
Water Pricing
15 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• Perceptions of whether bills are too high vary across states and aren’t entirely correlated with bills.
Pricing and pricing perceptions
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
South EastWater
QueenslandUrban Utilities
Sydney Water ACTEW WaterCorporation
SA Water
Typical bill ($)
Concern that prices a little or much too high(%)
16 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• Confidence in economic regulation is improving
• But regulatory regimes are being weakened or under review in some states – including Victoria and
Queensland
Economic regulation
Year Regulation is quite or very effective
2010 41%
2012 44%
2013 47%
2014 52%
17 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
18 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• A September 2014 report from the NSW Chief Scientist and Engineer
stated that Australia is in a good position to rise to the challenge of
managing the various water issues associated with CSG production
• It suggested that risks associated with CSG exploration can be
managed but that in and near drinking water catchments, risk
management needs to be of a high order
• The water industry is not yet convinced - 87% of respondents in the
ACT, Qld and NSW said CSG poses a risk to water resources, with
74% considering this risk significant or moderate
Coal seam gas
19 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• 83% of NSW Respondents either agreed or strongly agreed that dams are an effective way to manage
water security. Well above the national average of 68%.
• NSW respondents also deemed economic regulation of water in their state as effective, with 61%
indicating a level of quite or very effective regulation. Notably higher than the national average of 52%.
State Based Notes - NSW
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Dam Effectiveness
Effective Economic Regulation
Australia
NSW
20 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• A noteworthy shift in Queenslanders identification of big issues in the water sector included a 16%
increase in identifying the importance of ensuring water supplies are secure and a 13% increase in
responding to community concern over rising prices.
State Based Notes - QLD
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Responding to community concern overrising prices
Ensuring water supplies are secure
2014
2013
21 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• South Australian’s showed strong support when asked how well the sector is responding to climate
change impacts. 74% indicated climate change impacts are being well responded to compared to the
national average of 51%.
• Dissatisfaction with economic regulation remains high with South Australian respondents. With 39%
indicating minimal if any satisfaction with the effectiveness of economic regulation of water.
State Based Notes – SA
22 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• Victorian’s believe repairing irrigation infrastructure should be the top priority for meeting the water
supply needs of rural and agricultural needs (57%), above the response rates of the rest of the country
(≥9%). This area is being addressed through the Northern Victorian Irrigation Renewals Project.
• Despite significant price rises in 2013-14 in Melbourne, the proportion of Victorian’s who considered
water prices to be much or a little too high fell from 27% in 2013 to 20%.
State Based Notes - VIC
0%
10%
20%
30%
40%
50%
60%
NSW VIC QLD SA WA ACT NT TAS
Repair irrigation infrastructure
23 State of the Water Sector 2014 © 2014 Deloitte Touche Tohmatsu
• In Western Australia, 74% of respondents considered the state of the water sector across Australia to be
quite or very sound, an increase of 11% from 2013.
• To address the impacts of climate change, most Western Australians (77%) indicated there should be
further diversification of water supply sources, a large increase of 20% from 2013.
• Only 11% of respondents consider urban water prices a little or much too high, a drop from 20% in 2013
and considerably lower than the national average of 24%.
State Based Notes - WA
0% 10% 20% 30% 40%
NSW
VIC
QLD
SA
WA
ACT
NT
TASA little too high
Much too high
In Summary
24
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