CEO Insights 2019: Jonathan McKeown, Australian Water Association

What key trends do you predict will have an impact on the growth of your industry in 2019?

On the positive side, the following main trends will support growth of the water industry in 2019:

Demand for water infrastructure

The rate of population growth in our east coast cities with the escalated growth rates over the next 10 years is creating new demands for water services. This increased pressure is creating a positive impact on state government planning, community engagement and infrastructure investment. New projects in water infrastructure are expected to increase demand for skills and long-term resources from the water sector. This is being witnessed in the expansion of capacity at existing water plants, the upgrading of waste treatment plants and the commissioning of new plants.

Community support to provide for water security

The recent and continuing drought conditions in NSW and Queensland have raised the issue of water security on the national political platform, enabling both urban and regional communities to successfully push new approaches to address and overcome the challenges of water security. This heightened community awareness licenses our political parties to address the very real issues of providing water security.

SDGs underwriting our projects

There is a growing awareness of the UN’s Sustainable Development Goals in the Australian community. Goals that go well beyond just the provision of clean water for all including gender equity, education and partnerships. The SDGs encourage people to think globally whilst acting locally.

On the negative side, these positives can be quickly demolished by a downturn in the economy because of regional conflicts, commodity and oil price disruptions, a currency crisis or a natural disaster. Additional political instability and leadership in Australia will further delay any true long-term water planning and resource allocation needed to confront our water challenges.

What are the three biggest threats facing your industry in 2019?

The first threat remains climate

Climate uncertainty and the ability to change climatic conditions to destabilise steady economic development and investment remains a very real threat in 2019. Any number of significant climate changes that produce severe drought or floods can cause rapid economic downturn. A lack of clarity on both immediate responses to water needs caused by climatic changes and a lack of transparent long-term management planning to restore productive water capacity will deepen the economic damage suffered.

The second threat is a lack of national political water leadership

Australia is still labouring under a system of inconsistent regulation of water across eight different jurisdictions across the states and territories. There is no clear National Water Plan that can provide all consumers of water with security of supply. There is not a national water entity charged with the task of coordinating our national water needs beyond COAG. COAG itself is plagued by political short-term vision and partisan competition. What we need is leadership from the national government to drive the inclusion of matters that include:

• Increased use of groundwater with managed aquifer recharges in regional Australia
• Safe and affordable drinking water for all people regardless of location
• Water to support industry and agriculture
• Water management to create livable communities
• Water to protect the environment
• A nationally transparent water trading system
• A recognition of Indigenous water cultures and values
   

There needs to be a national commitment to ensure that all sources of water are considered. However, Australia’s water leadership needs to be shared with the state governments who possess the constitutional powers relating to water. There is now a real need for a new level of competitive neutrality in the water sector, a neutrality that can unlock maximum efficiencies and innovation from new players, technologies and approaches.

We need to question how our historically large urban water monopolies can be shaped for a future that will need more decentralised water management. It’s a future that will require more local community engagement and the introduction of more competition in the delivery of water services based on the adoption of new technologies. In the design, management and delivery of our water services we need to harness new agility and innovation to remove outdated silos of operation that hinder real customer engagement in an age of digital disruption and imminent automation.

The third threat is a lack of community understanding on water issues

When not confronted with a water crisis, most Australians and the politicians that represent us become complacent about our water challenges. This is in part a result of the success Australia has enjoyed in the effective delivery of water services that are largely hidden and mostly undervalued. The importance of the delivery of these water services deserves to be better valued and understood as the major economic driver for the country. The removal of water services would reveal a massive impact on the economy, but it is the need to progress the community’s awareness of new options for water management that deserves new focus.

Highlighting the progress on science, technology and management systems would help grow the community’s appetite for new water recycling, community-based water projects, stormwater harvesting and the use of new sources of water. It is only with such community engagement that Australia will be able to keep up with the rate of scientific research and modern technologies to improve our water management practices.

Jonathan McKeown has been the Chief Executive of the Australian Water Association since May 2013. He has worked as a commercial lawyer and a management consultant for over 200 businesses and projects across Asia and the Middle East. Prior to his current role, Jonathan was Chief Executive of the NSW Farmers Association.