In its March 2008 publication Towards Urban Water Reform , the Australian Productivity Commission reported that urban water users do not own property rights to water (p.61).
The Commission's assertion was not correct in relation to water collected from roofs for rainwater tanks.
All water users in New South Wales, Victoria, Queensland and the Northern Territory own property rights to water collected from roofs for rainwater tanks, as confirmed by the respective governments (Attachments 1-16)
Australia's other governments, including the commonwealth, consider that the water that falls on a person's roof is not the property of that person (Attachments 17-28)
A market for trading mains drinking water supply could be established if property owners were permitted to trade the amount of mains water they save in a given year by substituting their own rainwater.
In Australia, sovereign risk is an impediment to rainwater tanks becoming a significant additional source of urban drinking water supply.
Sovereign risk occurs in the form of governments taxing the use of rainwater or imposing entitlement regimes.
For example, the National Water Commission claims that governments can establish entitlement regimes for the use of rainwater (Attachment 17). The commonwealth government makes the same claim (Attachments 18, 19).
Confirmation by the governments of NSW, Victoria, Queensland and the Northern Territory that rights to water collected from roofs for rainwater tanks are vested in the property owner, removes sovereign risk in those markets.
However, a threat remains in the other states and the ACT.
Sovereign risk is enshrined in Australia's National Water Initiative Agreement (2004).
Clause 2 says, ''In Australia, water is vested in governments...''.
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