A review of existing funding models, economic regulatory frameworks, policies and mechanisms

Abstract

Broadly, this review of funding models, economic regulatory frameworks, policies and mechanisms concluded that although funding and financing issues are widely cited as an impediment to delivering water sensitive urban design (WSUD), funding and financing issues are not the main impediment to delivering WSUD, at scale. Rather, the main issue is the ‘authorising environment’ for investment decision making.

The authorising environment for water infrastructure investments determines what is achievable. Within Australia, financing and funding decisions for water infrastructure projects are made relatively systematically across jurisdictions, and these approaches to financing and funding reflect decisions made within the authorising environment. Therefore, progress in delivering WSUD projects at scale will be made only by changing the authorising environment. Once that is done, objectives can be set that reflect the broader public health and environmental benefits delivered through WSUD. With clear, measurable, time bound objectives, the question then becomes how to deliver these objectives at the least cost.

Although this report does not make specific recommendations, it does identify reform options for further debate and discussion. The first three options can be collectively viewed as policy and institutional reforms aimed at elevating WSUD as a priority for government, and putting in place the necessary enabling architecture to equip regulators, utilities, local government and other parties with the authority to deliver WSUD.