This inquiry responds to the Australian Government’s request for the Productivity Commission to undertake its third triennial assessment of jurisdictions’ progress towards achieving the objectives and outcomes of the 2004 National Water Initiative (NWI).

The Commission was asked to make recommendations:

• on actions that the parties to the NWI might take to better achieve the objectives and outcomes of the NWI
• to support all Australian governments in efforts to progress national water reform in light of current priorities, including water security and the involvement of First Nations communities in water management
• on how the Australian Government can better utilise the Water Act as a framework for guiding national water reform policy.

This report is structured as follows: it starts with a brief motivation for and description of the NWI. Then it discusses the case for reform of what is now a 20-year-old agreement, highlighting climate change and population growth. The subsequent sections of the overview, and chapter 1 of the report, outline how the NWI can be improved based on updated renewal advice that the Commission first provided in 2021, and additional findings and recommendations from the Commission's 2024 assessment.

Key findings:

• The 2004 National Water Initiative (NWI) has served Australia well as a foundation for water management. But a renewed and updated NWI will help governments navigate growing water security challenges.
• Planning for water security should be a greater focus of a renewed NWI, in the face of an increasingly variable and changing climate.
• A renewed NWI should include both an objective and a new element, recognising First Nations peoples’ reverence and cultural responsibility for water and the continued involvement and participation of First Nations peoples in water management.