Queensland Water 2026 Annual Conference

On 19 August 2026, Tim White presented at the Queensland Water 2026 Annual Forum.

The following is Tim’s presentation, and you can download the slides on the download link

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Good afternoon everyone.

Before I begin, I’d like to acknowledge the Traditional Custodians of the land and waters on which we meet today, and pay my respects to Elders past and present.

Working in the water sector gives that acknowledgement particular meaning for me.

Water has always been central to Country — connecting people, communities, culture and place. And those of us who work in this sector have the privilege, and responsibility, of making decisions about something that has sustained communities here for tens of thousands of years.

Through our work, we’re fortunate to work with water businesses and communities across Queensland, on the lands and waters of many different Traditional Custodians.

So today, I’d also like to acknowledge those Traditional Custodians, and recognise their enduring connection to land, waters and community.

It’s a connection that long predates the institutions, regulatory frameworks and infrastructure that I’ll be talking about today — and one that should continue to inform how we think about the stewardship of water for future generations.

My name is Tim White, and I am the Executive Director of Utilities Regulation Advisory (or URA), a firm that specialises in the economic regulation of utilities sectors.  We are the only firm nationally that specialise in water pricing.

From a personal perspective, I have been working in the economic regulation of water for 24 years across Australia and NZ across both regulators and businesses, and have been involved in the design of water pricing frameworks across Australia and NZ, including the 3Cs framework in NSW, the PREMO framework in Victoria, working with SEQ’s water businesses and the Queensland Government on the frameworks for bulk water pricing, and currently engaged with the NZ regulator to help establish the water pricing framework for Watercare.

We also work extensively with water businesses to develop regulatory pricing submissions to achieve success under regulatory scrutiny.

URA is part of the Utilities Advisory Group, where our sister entity Utilities Strategy Advisory provides advice in strategy, transformation, governance, investment planning, program management, organisational capability and regulatory readiness across the water sector, and some of my colleagues Daniel Lambert and David Francis are here with me today if you wish to connect.

UA operates nationally, with dedicated resources in Queensland, across the Eastern Seaboard of Australia and into NZ.

For full disclosure, URA is currently engaged to work with the QCA in undertaking a price monitoring review of Urban Utilities and Unitywater.

Today I want to spend some time exploring the purpose of economic regulation, what good practice looks like, implications for Queensland water service provision and how to be prepared.  In doing this, I want to use other jurisdictions as a point of reference, but also be clear on why one cannot simply adopt the frameworks applied in other jurisdictions.

Water pricing doesn’t matter, until it does

Queensland’s water sector is entering a period of increasing scrutiny. Population growth, ageing infrastructure, affordability pressures, climate resilience, more stringent environmental regulation and significant growth in capital investment requirements are all increasing the importance of transparent and robust pricing outcomes.

The Queensland Government has already directed the QCA to undertake price monitoring of Urban Utilities and Unitywater, reflecting a desire for greater transparency, consistency and independent scrutiny of retail pricing. Furthermore, Seqwater’s bulk water prices have been frozen for two years, and pressure is being applied to the retailers to freeze their prices.  This demonstrates the political sensitivity in water pricing.

This is not unique to Queensland:

• In the recent IPART review of Sydney Water’s prices, the current premier wrote to the Chair of IPART urging priority for household cost-of-living impacts, following Sydney Water’s proposed large price increase to fund growth infrastructure.
• The Victorian Government has had an unofficial mandate of flat or falling prices in Victoria for the last 10 years.
• In SA, the SA Government heavily criticised SA Water for not investing enough to cater for its growth ambitions.  Further, to help deliver growth, and to keep prices down, they tipped in half a billion dollars to maintain affordability.  More recently, the SA Government has announced the de-corporatisation of SA Water into a new state trust focused on integrated planning and to support more effective capital delivery.
• In Tasmania, TasWater and the Economic Regulator were hauled in front of the Tasmanian Public Accounts Committee due to the large price increases determined through the price review.

Water pricing doesn’t matter, until it does.  Independent of the form of economic regulation, and the clarity of roles and governance, Governments will always seek to influence utility pricing.  Sitting Governments do not want to see large price increases, but at the same time don’t understand the risks to service providers of constraining spending.

Recent developments in South East Queensland have highlighted the increasing importance of clear roles for governments, utilities and independent regulators. As affordability pressures and infrastructure investment needs continue to grow, economic regulation provides a framework for balancing customer interests with the long-term sustainability of essential water services.

Regulation is designed to protect customer interests

Economic regulation exists because customers cannot rely on competitive markets to protect their interests where monopoly infrastructure services are provided.

Economic regulation seeks to achieve four broad outcomes:

• Efficient prices means prices that recover the efficient cost of providing the required services — no more and no less — while providing appropriate signals about the cost of service provision and use.  For example, this can be achieved by forecasting the efficient operating and capital cost for meeting servicing obligations and appropriately allocating those costs to the service in accordance with cost drivers.
• Sustainable service delivery means ensuring water and wastewater services can continue to be provided safely, reliably and affordably over the long term, including through changing demand, asset condition, climate and other risks.  For example, a business maintains an evidence-based renewals program for ageing water mains rather than deferring expenditure to suppress current prices and creating reliability problems and higher costs for future customers.
• Efficient investment means making the right investment, at the right time, using the most efficient solution, having considered alternatives, risk and whole-of-life cost.  For example, faced with population growth, a business tests augmentation, demand management, optimisation of existing assets and staged investment before committing to a major new treatment plant.
• Customer value for money ensures the services and outcomes customers receive are commensurate with the prices they pay, reflecting customer priorities and willingness to pay.  For example, customers indicate that reducing sewer spills is a priority. The business develops and tests an efficient improvement program and demonstrates that the resulting bill impact is supported by the customer benefits delivered.

There is a common misconception that the purpose of economic regulation is to deliver the lowest prices, or to maintain affordability.  Whilst that is an important consideration or input, it needs to be balanced against servicing obligations and maintaining financial sustainability.  Regulation is designed to ensure that customers are paying no more than is necessary for the services they receive.

Regulation is designed to protect customer interests

To do this, regulatory frameworks are commonly underpinned by the objective of promoting the long-term interests of customers by encouraging efficient investment, efficient service delivery and efficient prices.  This can be distilled down to five key objectives:

• Affordable prices, because customers should pay no more than necessary for efficient services.
• Reliable services matter, because safe and dependable water and wastewater services are essential to public health and economic activity.
• Future ready investment, because infrastructure must be maintained and expanded to meet population growth, resilience and environmental obligations.
• Service quality, because customers value continuity, water quality, responsiveness and environmental outcomes alongside price.
• Intergenerational equity, because today’s prices should not simply defer efficient costs onto future customers through under-investment or deteriorating assets.

Economic regulation should not be seen by businesses as a purely technical/theoretical exercise.  Its whole premise is built on good business/market practice.  Economic regulation is fundamentally about balancing competing objectives rather than pursuing the lowest possible price.

Where costs and hence prices are efficient, and if a Government determines that prices are not affordable for its communities, then it should be incumbent on them to fund the gap (for example through a CSO) to meet servicing requirements.  The reality is that political needs lead to interventions that in many circumstances result in less efficient outcomes, and a lack of balance between these competing objectives.

Foundations are critical to success

Economic regulation looks different in every jurisdiction.  It needs to be tailored to the structure and maturity of the industry.  Better practice frameworks typically align with seven core principles:

• Independent – Economic regulation should be undertaken independently of political, commercial and stakeholder interests, with decisions based on objective evidence and established regulatory frameworks.  In reality this has been difficult, as demonstrated by different jurisdictional involvement in water pricing.  In NSW, Victoria, South Australia, the ACT and Tasmania, their economic regulators are set up independent of Government, with authority to determine prices.  They undertake detailed price review processes to establish efficient historical and forecast costs to set fair and reasonable prices.
• Transparent – The regulatory process, supporting analysis and decision-making should be clear, understandable and accessible to customers, utilities and other stakeholders.  Good practice requires symmetry between the expectations of businesses to be transparent with the justification and evidence to support decision making processes, and of regulators regarding their decisions and the basis for forming their positions.  A regulator shouldn’t ask something of a business that it would not be willing to ask of itself.
• Predictable – Regulatory frameworks should provide sufficient certainty to support long-term planning, investment and customer confidence.  They should be predictable in their form and predictable in their application.  This means consistency across businesses and consistency in the consideration of issues and decisions that are formed.
• Evidenced – Prices and expenditure should be supported by robust evidence demonstrating efficiency, prudency and customer benefit.  Proposals should be based on credible and fact based evidence and analysis, not on professional opinions or assertions.  It is not incumbent on regulators to accept or agree to things that are asked for.  It is incumbent on businesses to demonstrate that its proposals and strategies deliver the best outcome for customers.  In other words, its not for them to prove a business wrong, but for the business to prove that its proposals are appropriate.
• Proportionate – The regulatory framework should be proportionate to the size, complexity and risk profile of the regulated business.  One size does not fit all, and the form or regulation of a water business servicing 3,000,000 people should be different to one that services 3,000 people.  Maturity is commonly linked to size and funding availability
• Customer focused – Economic regulation should promote outcomes that reflect the long-term interests, preferences and willingness to pay of customers.  It is not a regulators role to tell businesses what is in customer’s best interests.  That should sit with the business.  They are responsible for managing the relationship with customers, directly engaging them on their preferences, and determining how those preferences can best be delivered.  Better practice seeks to give customers a greater level of influence over the issues that most materially impact service and cost.  It also means engaging with all forms of customers, not just residential and non-residential.  Finding ways to engage with hard to each customers, those that are vulnerable and/or disadvantaged and traditional owners, not only as stakeholders, but rights owners, is important, and through forms that best meet their needs.
• Enabled through legislation – Regulation is driven by the legislative framework and the focus of the Govt that set up the framework. E.g. affordability, long term financial sustainability, private sector participation, different ownership models, scale and practicality.  The best frameworks provide clarity, consistency and integration through legislation, sub-ordinate instruments, policies and administration.

For regulation to be good practice, the costs of regulation must not exceed the benefits.

Queensland’s water sector is… complicated

Queensland effectively has four different delivery models – state-owned wholesalers, distributor retailers, council owned businesses and smaller regional councils.  All are regulated quite differently, but for how long?

Only four of Queensland’s water service providers are owned by the State, including three (being Seqwater, Sunwater and GAWB), where the QCA undertakes formal reviews, and provides advice to the Queensland Government, to inform its final pricing decision.  All wholesale water providers across NSW and Victoria (such as WaterNSW, Sydney Desalination Plant and Melbourne Water) are independently regulated, where their prices are set by those regulators through five yearly price reviews.

Urban Utilities and Unitywater are the two retail distributors that are currently under a price monitoring framework following a recent referral from the Queensland Government.  As these are multi-council owned businesses, the State cannot set their prices, but they establish legislative frameworks and policies that those businesses must respond to, and can use those instruments to influence pricing outcomes. The framework for these businesses is built around monitoring, which means that in effect its focus is more ex-post than it is ex-ante. This makes it very different to the other states, with a focus on current period performance, the base year and less focus on forecasts.

This differs to retail distributors in Victoria, such as Greater Western Water, South East Water and Yarra Valley Water in Melbourne, which are independently regulated by the ESC, and prices are set on an ex ante basis.

All other water customers in Queensland are serviced by regional councils and small providers, where there is no role for the economic regulator.  This is similar to arrangements for local water utilities in NSW.

Independent of the organisational model, customers expect value, transparency, reliable services, long term planning and evidence-based investment.  Regulatory frameworks should be tailored to the structure and maturity of the sector.

Consistent economic regulation or regulatory maturity?

On that basis, it is difficult to see Queensland’s regulatory framework converging to a single approach across all water service providers.  And I’m not sure it should. The costs of applying such a framework would almost definitely outweigh the benefits.  It is more likely that we see a convergence of regulatory expectations with a focus on the following organisational capabilities:

• Strategic planning maturity is the ability to translate long-term objectives, risks and customer needs into integrated service, asset, financial and investment plans.  An example may be for a business to use 20–30 year demand forecasts, asset condition, climate scenarios and growth forecasts to develop an integrated servicing and investment strategy, which then informs its five-year capital program and prices.
• Customer centered decision making ensures customer needs, preferences, affordability and willingness to pay genuinely influence decisions, rather than engagement simply validating decisions already made.  For example, customers identify reliability and affordability as priorities. The business tests alternative service levels and investment options with customers and changes its proposed program in response to their preferences.
• Evidence based investment means investment decisions supported by demonstrated need, consideration of alternatives, risk, benefits and whole-of-life costs, providing confidence that expenditure is prudent and efficient.  For example, rather than automatically replacing an ageing treatment plant, the business assesses asset condition, failure risk, demand, refurbishment, optimisation and replacement options and selects the lowest whole-of-life-cost solution that meets the required service outcome.
• Performance and transparency means the organisation measures, understands and openly reports its financial and non-financial performance, including whether expenditure and investment are delivering the outcomes promised to customers.  For example, a business publicly reports service reliability, water quality, customer complaints, capital delivery and operating efficiency against targets—and explains material underperformance and corrective actions.
• Continuous improvement means the organisation systematically learns from performance, benchmarking, customer feedback and previous decisions and uses that learning to improve future outcomes.  For example, benchmarking shows the business has materially higher water-main maintenance costs than comparable utilities. It investigates the causes, changes its maintenance approach, sets an improvement target and tracks whether savings and service improvements are actually achieved.
• Quality decisions are made through clear, disciplined and transparent governance processes, with appropriate challenge, evidence, consideration of alternatives and accountability.  For example, before approving a major augmentation, management presents the Board with the need, options considered, customer impacts, risks, whole-of-life costs and independent assurance. The Board challenges the assumptions and records why the preferred option represents the best long-term outcome for customers and the business.

Many of the examples I have cited here are what we expect of well-functioning, major utility service providers.  However, full deterministic building block regulation is expensive and its not suitable for small scale businesses. Some jurisdictions like SA have put in place tiered frameworks based on scale.

One set of principles, applied proportionately

The destiny for Queensland is unlikely to be regulatory uniformity, but instead a focus on business maturity that reflects good practice (as required and incentivised through economic regulation).

In aggregate, there are six organisational capabilities that align with good practice regulation, but their implications differ across industry stakeholders, to reflect expectations under differing levels of regulatory oversight, and to reflect the complexity and maturity of the service provider.

I don’t intend to go through the table in detail otherwise I am coming between you and lunch, and you can read at your own leisure.  It also is not intended to be a complete list of expectations, but a set of examples of different expectations for different providers.

For example, whilst there may be an expectation of fully integrated planning across corporate, financial, assets and pricing strategies for major Queensland utilities, a more proportionate expectation might be long term financial planning for a larger council or more strategic-based planning for a smaller regional council.

Major utilities should undertake detailed options analysis, economic evaluations and utilise independent peer review and benchmarking to validate their decisions.  Larger councils should undertake risk assessment, lifecycle costing and capital prioritisation to ensure its program remains appropriate.  Smaller regional councils should ensure business cases are fit-for-purpose, that it undertakes appropriate condition assessments and inspections of assets to inform decision making, moving beyond simply asset age.

Furthermore, major utilities are well placed to implement continuous improvement, innovation in service delivery and digital optimisation.  Larger councils are better placed to focus on asset management maturity, internal benchmarking and process improvements.  For smaller councils, their abilities may be limited to periodic reviews, lessons learned and broader staff development.

Queensland doesn’t need one regulatory framework for every water service provider. It needs one set of regulatory principles, applied proportionately.

The future of economic regulation in Queensland is not about choosing between affordability, investment or service quality. It is about creating a framework that gives customers confidence that these trade-offs are being made transparently, consistently and in their long-term interests.