Water Efficiency Labelling and Standards Bill 2004

Managing Australia’s fresh water resources effectively and efficiently is one of our most important environmental and resource management challenges. Without secure and high quality water resources we would be unable to sustain our regional economies or urban communities. The long-term health of our freshwater ecosystems also depends on us minimising the negative impacts of agricultural and urban water consumption.

The emerging urban water problems in Australia are looking increasingly serious. One only needs to look at Melbourne, Sydney, Perth and South East Queensland for a graphic illustration of the urban water issues. High rates of population growth, the strong economy, increasing demands for environmental releases and prolonged drought conditions are continuing to offset the gains from conservation programs and increasing the pressure on available water supplies.

Reduced rainfall and inflows to storages have resulted in much lower sustainable yields from available storages than had been projected as recently as 5 to 10 years ago. The Gold Coast, for example, will be past the sustainable yields of its existing dams in only a few short years. Previous estimates of the potential water available from unexploited dam resources are being revised downward as a result of the recent drought at a time when the population is growing at a tremendous rate. As a consequence the Gold Coast is now in the process of planning a new regional pipeline to collect water from a dam near Brisbane. Unfortunately this solution will only provide temporary relief and the Gold Coast is now looking at recycled water, desalination and rainwater as part of its future water supply strategy. Water conservation has become more than a noble idea for the Gold Coast, but is now an integral part of meeting future water needs.

The Howard Government has taken this challenge very seriously by committing significant resources to improving water management across the nation and by working in partnership with the State and Territory Governments.

Today I am introducing a Bill for the introduction of a national Water Efficiency Labelling and Standards Scheme that will require water efficiency labels to appear on a range of common water-using products like washing machines, dishwashers and toilets and also establish a regime for the setting of minimum water efficiency standards. But before I explain the detail of the Bill, I would like to provide the broader context of the initiative.

In 1994 the Council of Australian Governments (COAG) agreed to implement a strategic framework for the reform of the water industry. Through the implementation of water reforms over the last ten years, Australian governments have made some real progress towards efficient and sustainable water management. The recognition of the need for environmental water provisions, the separation of water entitlements from land, and pricing reform, have all been significant steps forward.

At the COAG meeting in June this year, the Government and the States and Territories (except Western Australia and Tasmania) agreed to an Intergovernmental Agreement on a National Water Initiative. In essence, COAG recognised the twin imperatives to increase the productivity and efficiency of Australia’s water use and to ensure the health of river and groundwater systems. It was agreed that opportunities for a cooperative national approach to further progress water reform exist in a number of areas. These form the basis of the National Water Initiative. Key features of the National Water Initiative include:

• Secure and nationally compatible water access entitlements;
• Improved water trading, to expand water markets to their widest practical geographic scope;
• Accountable, outcomes-focused provision and management of environmental water; and,
• Actions to better manage urban water demand.

The urban water reforms are aimed at improving water-use efficiency and demand management, making better use of stormwater and recycled water, and encouraging water sensitive urban design. There has been a lot of activity in this area over the last ten years, including in the reform of water pricing in urban areas. This Bill—the Water Efficiency Labelling and Standards Bill—is a key initiative in support of the urban water reform agenda.

The Government is also working with States and Territories to develop National Guidelines for Water Recycling—managing health and environmental risks. The new Guidelines will cover water recycling and water sensitive urban design and be a part of the National Water Quality Management Strategy. The Guidelines will increase the uptake of water recycling opportunities in Australia to provide new sources of supply in a way that protects public health and the environment.

This Government is pushing forward with the implementation of its commitments under the National Water Initiative.

During the election, the Government announced the establishment of the $2 billion Australian Water Fund. Investment under the Fund will help achieve the objectives of the National Water Initiative through practical, on-ground water solutions. The three programmes that make up the Australian Water Fund—Water Smart Australia, Raising National Water Standards and the Communities Programme—will directly support improvements in how we manage urban water use. In particular, investment under the Raising National Water Standards programme will support this water efficiency labelling scheme.

The Government has introduced legislation in this session creating the new National Water Commission, a key commitment under the National Water Initiative.

The National Water Commission will have two vital roles:

• It will evaluate and advise on the reform progress under the National Water Initiative in accordance with the Intergovernmental Agreement; and
• It will also advise on project selection and administer projects under the Water Smart Australia and Raising National Water Standards programmes of the Australian Water Fund.

So the Water Efficiency Labelling and Standards Bill must be seen in the context of the Government’s very significant achievements in relation to water reform and as a contribution towards achieving efficiency improvements under the National Water Initiative.

At just under 1,800 gigalitres per year, that is, 1,800 billion litres per year, household water use accounts for about 16 percent of the consumption of the mains-supplied water in Australia. This is the second largest share of mains water use after agriculture, which at around 8,400 gigalitres per year, accounts for around 75 percent of consumption. Clearly whilst the “main game” in water consumption will always focus on agricultural use, urban and household water use cannot be ignored, especially as our main urban centres are experiencing significant water supply problems. The dual effects of increasing population and the emerging impacts of climate change make efforts to manage urban water use ever more important. Indeed, between 1996 and 2001, the supply of water to households in the main urban areas increased by 13 percent.

The purpose of the Water Efficiency Labelling and Standards Bill is to establish a water efficiency scheme for a range of important water-using products. Through the Scheme, the Government wants to empower consumers by providing them with information about the water efficiency of products so that they can contribute to water conservation directly through the purchase of more water-efficient products. This information will predominantly come in the form of labels on products covered by the Scheme, but also from the associated website and promotional material.

The net savings to consumers are forecast to be substantial. By simply choosing more efficient products, by 2021 the community stands to save more than $600 million through reduced water and energy bills. And these savings will be achieved without any compromise in product performance or convenience or any major adjustment in user behaviour. A water-efficient washing machine performs its function just as well as an inefficient one, as does a water-efficient urinal. So the scheme will promote clever design that benefits both consumers and the economy.

The water efficiency scheme will be the first of its kind in the world. Given that pressure on freshwater resources is emerging as a truly global problem, the potential for Australia to position itself as a leading exporter of water-efficient technologies and expertise is significant. Underpinned by a robust technical regime, our exporters will be able to use the label as a platform for marketing the water efficiency of their products to a growing global market.

The Government estimates that by 2021, water efficiency labelling will cut domestic water use by five per cent or 87,200 megalitres per year. A total of 610,000 megalitres—more water than in Sydney Harbour—will be conserved by 2021. Nearly half the water savings will come from more efficient washing machines, about 25 percent from showers and 22 percent from toilets.

The Scheme will also deliver substantial energy savings and greenhouse gas abatement through a reduction in hot water use. The reduction in greenhouse gas emissions for Australia is projected to reach about 570 kilotonnes of carbon dioxide equivalent per annum by 2021, with a cumulative total of around 4,600 kilotonnes of carbon dioxide equivalent by 2021.

The Water Efficiency Labelling and Standards Bill establishes a national legal and administrative structure for the Scheme. And yet, in the true spirit of federalism, the Scheme provides for working in partnership with the States and Territories, which will enact complementary legislation. This mirror legislation will fill in the small constitutional gaps in the Commonwealth’s powers. Importantly, the States and Territories have also agreed in principle to assist with funding the program using the usual population-based funding formula for any program costs that cannot be recovered through industry registration fees.

The Government expects the Scheme to commence in 2005. Initially, six appliances will be required to carry water efficiency labels: washing machines, dishwashers, toilets, showerheads, taps and urinals. Flow control devices will be covered on a voluntary basis. In addition to labelling, it is proposed that toilets will be required to comply with a minimum efficiency standard so that inefficient toilets with an average flush volume of more than five and a half litres can no longer be sold in Australia.

Under the framework set out in the Bill, it will be possible in future years to introduce minimum water efficiency standards for additional water-using or water-saving products other than toilets, where the need for this can be established. Minimum water efficiency standards will ensure that inefficient products can no longer be sold.

The Bill will also allow the product range covered by labelling requirements to be expanded if this is found to be appropriate in future years. Whilst the Scheme will initially cover washing machines, dishwashers, toilets, showerheads, urinals, taps and flow control devices, there is every reason to believe that further research and development will reveal that other products would benefit from labelling and minimum standards. For example, evaporative air-cooling systems and hot water systems are potential candidates for inclusion in the Scheme.

Industry has been consulted on the detail of the proposal and I am pleased to advise that the Scheme enjoys broad support.

The water efficiency scheme will help consumers make informed decisions about what products to purchase and the water, energy and financial savings that are possible. Industry will also benefit from the Scheme because it will create a level playing field in relation to claims about water efficiency and provide for nationally consistent product standards.

In conclusion, in this Year of the Built Environment the water efficiency labelling and standards initiative provides another important way that all Australians can conserve water and so help to make our urban communities more sustainable.