National water consumption jumped 12.9% in 2023–24 to 17,223 gigalitres — the largest single-year increase in recent record. Agriculture, forestry and fishing accounted for 11,760 gigalitres of that total, up 14.6% from the previous year. For Australian businesses that depend on reliable water access — whether for irrigation, processing, cooling, cleaning, or supply chains — those numbers are not just statistics. They reflect a system under growing pressure from climate variability, ageing infrastructure, and rising demand from both industry and households.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Two things happened at once last year. The 2023–24 season began with the driest three-month period on record, then shifted to heavy rain in some regions while southern areas stayed dry. Major dam storages dropped 8% nationally. So consumption went up at the same time supply became less predictable. For businesses that assumed water would always be available at a stable price, this year was a wake-up call. One industry that saw the shift most clearly was agriculture, where irrigation demand pushed water use to 11,760 gigalitres — nearly 70% of total national consumption. The ABS water account makes clear that the pattern is not a one-off. A drying climate in the south-west and south-east is making allocations tighter, and businesses in those regions need to plan for more variability, not less. If you run an operation that depends on water — directly or through your supply chain — the conditions that drove last year’s figures are likely to persist. Here’s what you actually need to know.
The term water scarcity gets thrown around a lot. In the Australian context it refers to a situation where the demand for water — from agriculture, industry, households, and the environment — regularly exceeds the available supply, or where supply becomes so variable that users cannot plan around it.
What I tend to notice in conversations with business owners is that many treat water scarcity as an agricultural problem. It is not. If you manufacture goods, run a hospitality venue, manage a commercial property, or operate cold-chain logistics, your business has a water exposure. And it is probably larger than you think.
The Real Cost of Getting Water Strategy Wrong
The most immediate consequence of ignoring water risk is financial. When allocations get cut or prices spike, businesses that have not diversified their supply or improved efficiency face sudden cost increases with no easy fix. Perth is the clearest example. The city has the largest projected supply shortfall of any Australian capital city, driven by persistent drying in the south-west that has reduced rainfall availability for decades. For businesses operating there, water costs will keep rising as the city invests in desalination and recycling — both more expensive than rainfall-dependent supply.
But the stakes are not just about price. They are about continuity. Darwin’s forecast water demand is expected to more than double by 2056. That is the biggest proportional increase of any capital city. If you run a business in Darwin that relies on consistent water supply for your operations, you are looking at a future where the utility needs to build entirely new infrastructure just to keep pace. And infrastructure takes time. The Water Leaders Forum hosted by the Australian Water Association in 2025 focused heavily on this tension — how to time infrastructure investment so it aligns with community affordability thresholds and government funding cycles. That means delays. And delays mean risk for businesses that need water now.
There is also a less visible cost: regulatory exposure. State governments control water allocations, and when scarcity tightens, they adjust. Businesses that have not kept up with changing allocation frameworks or long-range rainfall forecasts may find themselves locked out of access at critical moments. The Bureau of Meteorology’s latest outlook shows below-average rainfall likely across much of southern, central, and eastern Australia for June to August. That pattern has been building for years. The 36-month rainfall deficiencies now cover large areas of south-west Western Australia, South Australian agricultural zones, much of Victoria, and Tasmania. For businesses in those regions, the trend is not temporary.
Where Australian Businesses Misjudge Their Water Exposure
Over-reliance on rainfall-dependent supply
Most capital cities still get the majority of their water from surface water and groundwater — both rainfall-dependent. That works well in wet years. In dry years, the system tightens fast. Perth learned this lesson decades ago and now sources a significant portion of its supply from desalination and recycling. Other cities have been slower to adapt. For a business in Sydney, Melbourne, or Brisbane that assumes municipal supply will always cover its needs, the risk is that during a prolonged dry spell, restrictions or price adjustments hit without warning. What I would do in that situation is check exactly how much of your local supply comes from climate-independent sources. If the answer is “very little,” that is a vulnerability worth addressing now, not during a drought.
Treating water as a fixed cost rather than a variable risk
Many businesses budget for water the same way they budget for electricity — as a recurring expense that fluctuates moderately. But water allocation systems work differently. In irrigated agriculture, for example, allocations depend on seasonal conditions and carryover policies. A business that assumes last year’s allocation will repeat this year can find itself suddenly unable to plant or process. The ABS data shows that agriculture’s water use jumped 14.6% in 2023–24 partly because opening allocations were high after the wet 2022–23. When allocations tighten the following year, the swing can be brutal.
Ignoring the skills and labour gap in water management
This is the one that surprises people. The Australian Water Association reports that workforce gaps were raised in nearly every state and territory meeting in 2025, particularly around operator training and diversity pipelines. Utilities and contractors cannot expand capital programs if they cannot find the people to build and run them. For a business planning to invest in on-site water recycling or efficiency upgrades, that labour shortage means longer lead times and higher costs. The gap between wanting to improve water resilience and actually getting the work done can be years.
Underestimating how regulation is evolving
State and territory water strategies are often out of date. Infrastructure Australia notes that Perth and Adelaide’s long-term water strategies date back to 2009, and Canberra’s was last updated in 2014. But that does not mean nothing is changing. State regulators are actively looking at operator capability, pricing frameworks, and demand management. Businesses that assume the regulatory landscape will stay static are taking a gamble. The trend is toward stricter allocation monitoring, higher compliance requirements, and more reporting on water use.
→ Scroll right to see all columns
| City | Primary water source type | Key risk | Alternative supply status |
|---|---|---|---|
| Perth | Climate-independent (desal + recycling) | Persistent drying reduces groundwater recharge | Most diversified nationally |
| Darwin | Rainfall-dependent | Demand projected to double by 2056 | Adelaide River Off-Stream Storage proposed |
| Adelaide | Rainfall-dependent | Strategy last updated 2009; rainfall declining | Desalination plant available but underused |
| Melbourne/Sydney/Brisbane | Rainfall-dependent | Majority of supply from surface water | Some desalination and recycling investment underway |
Building a Practical Water Resilience Plan for Your Business
Audit your actual water dependency
Start with a clear picture of where your water comes from, how much you use, and what your supply contract actually says. If you are on town supply, check whether your local utility publishes annual water security statements or drought response plans. If you hold a water licence or allocation for irrigation or industrial use, review the carryover rules and allocation history for the last five years. The ABS water account and the Bureau of Meteorology’s drought reports are good starting points for understanding the regional context. A proper audit also means tracing water through your supply chain — if a key supplier is in a region with falling allocations, that is your problem too.
Assess whether alternative sources make sense for your site
For many businesses, the most practical first step is reducing demand rather than finding new supply. Low-flow fixtures, cooling tower optimisation, and rainwater capture for non-potable uses can cut consumption by meaningful percentages without major capital. But for operations with high water demand — food processing, beverage manufacturing, commercial laundries, data centres — on-site recycling or greywater treatment may be worth modelling. The cost of these systems has come down, but installation lead times have gone up due to the skills shortage. If you think you might need one, start the feasibility work now, not when a restriction is announced. You can explore water regulation and compliance questions with a specialist if the legal framework around on-site treatment is unclear in your state.
Plan around infrastructure delivery timelines
The water sector is shifting from building single assets to sequencing entire portfolios. That is a more strategic approach, but it also means projects take longer to reach the construction phase. The Australian Water Association has noted that utilities are under pressure to demonstrate that their plans can meet community expectations on both price and resilience. For a business that relies on a new desalination plant or recycled water scheme coming online, the risk is that its timeline slips. The best hedge is to build your own buffer — either through on-site storage, efficiency gains, or contracts that give you priority access during shortages. If you share water infrastructure with neighbouring businesses, consider whether a joint investment in shared recycling or storage could improve everyone’s position.
Watch for emerging regulatory and reporting obligations
Governments are increasingly looking at mandatory water efficiency reporting for large users, similar to the frameworks already in place for energy. Victoria and New South Wales have been the most active, but other states are expected to follow. For businesses with water use above certain thresholds — typically above 10 megalitres per year for commercial sites — the cost of non-compliance can outweigh the cost of the efficiency measures themselves. Staying ahead means knowing your state’s current thresholds and monitoring the pipeline of regulatory changes. The Infrastructure Australia report recommends that the Australian Government maintain up-to-date strategies for water planning, but the real action happens at the state level, and it moves faster than most businesses expect.
- Map your water sources, volumes, and supply contracts for the last three years
- Check your local utility’s water security and drought contingency plans
- Estimate the payback period for on-site efficiency or recycling investments
- Review your state’s threshold for mandatory water reporting
- Build at least one buffer option — storage, alternative supply, or priority contract
Frequently Asked Questions About Industrial Water Access
Does my business need a water access licence? ▾
What happens if my water allocation is cut mid-season? ▾
Are there tax incentives for on-site water recycling? ▾
Can I sell my water allocation to another business? ▾
Which Australian industries face the highest water-related business risk? ▾
How do I find out if my region is in a rainfall deficiency? ▾
Water Security Is No Longer a Regional Issue — It’s a Business Continuity Issue
The data from 2023–24 shows that water consumption is climbing while supply patterns become less predictable. Infrastructure is catching up slowly, if at all. For Australian businesses, the window to treat water as a strategic risk rather than an operational cost is closing. The businesses that will manage best are the ones that audit their exposure now, build in buffers, and keep an eye on how regulations are shifting in their state. Waiting until the next dry spell to take water seriously is the kind of delay that costs more than the solution ever would.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Adapting to Change: How Australian Businesses Overcome Challenges.
Sources and Further Reading
Is Your Business Stuck in the Past? Adapting to Disruptive Technologies in Australia — Looks at how technology shifts, including water monitoring and efficiency tools, are changing operational risk for Australian companies.
Why Australian Companies Face Excessive Legal Disputes — Explores how regulatory gaps and compliance complexity, including in environmental areas like water, contribute to legal exposure.
Australian Bureau of Statistics (2025). Water Account Australia, 2023–24. 🔗
Infrastructure Australia (2025). Secure and Sustainable Water for Growth — Water Supply. 🔗
Bureau of Meteorology (2025). Drought — Rainfall Deficiencies and Water Availability. 🔗
Australian Water Association / Inside Water (2025). The Future of Water in Australia — AWA’s 2025–26 Agenda. 🔗
