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National Water Account 2017

Melbourne: Governance

Yarra River, City of Melbourne © iStock

Accountability

1. This water accounting report has been prepared and presented in accordance with the Australian Water Accounting Standard 1, with the following exceptions:

  • No Assurance Statement was prepared because the standard for, and practice of, assurance of water accounting reports are currently not available.
  • Notes on the quantification approaches and levels of uncertainty are incomplete because the knowledge base is often inadequate.
  • No information is disclosed about material events that occurred after 30 June 2017, such as extreme precipitation and significant water rights purchases. This information is publicly available elsewhere.
  • Asset changes for water stores (surface water and groundwater) have been included in the Statement of Changes in Water Assets and Water Liabilities, without a corresponding water store asset volume being included in the Statement of Water Assets and Water Liabilities for the following items:

        – Urban water supply system
        – Recycled water system

    This is because water store flows and levels could be quantified but storage volumes for these items could not.
  • The volumes of water assets and water liabilities including the volumes of changes to water assets and water liabilities that failed the recognition criteria were reported in the water accounting statements with dashes ('–') in order to highlight data and knowledge gaps that may affect the water accounting statement balances.

2. The report has been compiled from the best data available, as detailed in the water accounting statement Notes, in the time available to compile it from a number of sources. The Bureau of Meteorology takes a nationally-consistent approach to report preparation and presentation, but for a few items there may be local data of higher quality that were not used.

3. All significant and specific interpretations of the Australian Water Accounting Standard 1 for the purpose of the preparation of this report are explained in the 'Water accounting policies' note. The Bureau of Meteorology is responsible for these interpretations.

 

Robert Argent

General Manager Water

Bureau of Meteorology

15 March 2018

 

Water accounting policies

Introduction

The information presented in the Melbourne region water accounting report is based on collaboration between the Bureau of Meteorology and:

  • Victorian Department of Environment, Land, Water and Planning
  • Melbourne Water
  • City West Water
  • South East Water
  • Yarra Valley Water
  • Western Water
  • Southern Rural Water
  • Central Highlands Water
  • Gippsland Water

This report has been prepared using an accrual basis of water accounting, with the exception of the physical water flow information. The water attribute being quantified is volume and the unit of account is megalitres (ML) in quantifying and either ML or gigalitres (GL) in presenting. Only In the accounting statements and tables, a negative volume is shown in brackets. The applicable reporting period is from 1 July 2016 to 30 June 2017.

Transactions between water assets and water liabilities within the region (e.g., between the surface water store and the groundwater store) are not reported in the water accounting statements because they do not affect the region's total water assets and water liabilities.

 

Recognition of water assets and water liabilities

Only water that is held or managed by the State licensing authority or the urban retail water authorities and from which future benefit can be derived by stakeholders of the region is defined as a water asset.

Water liabilities are constituted by present commitments to supply water, the discharge of which is expected to result in a probable decrease of the region's water assets or a probable increase in another commitment to supply water.

Provided its volume can be quantified in a way that is complete, neutral, and free from material error, the volume of the water asset or water liability is recognised in the Statement of Water Assets and Water Liabilities.

Water held in storages that has already been abstracted from the entitlement system is deemed not to be part of the region (regardless of the storage's size or connection to the system). This is because the attendant water right has already been exercised.

 

Recognition of changes in water assets and water liabilities

The increases and decreases to the reported water assets and water liabilities consist of changes that can be quantified in a way that is complete, neutral, and free from material error. These volumes are presented in the Statement of Changes in Water Assets and Water Liabilities and the Statement of Water Flows.

Precipitation and evaporation are recognised only in relation to the surfaces of open storage and river volumes. They do not represent all precipitation, evaporation, and evapotranspiration within the region (notably, these processes occurring from the landscape are not captured).

The portion of runoff that flows into the surface water store (storages and river channels) is quantified and recognised in the Statement of Changes in Water Assets and Water Liabilities. This runoff includes precipitation captured in the catchment less evaporation and infiltration, and is recorded as Runoff to surface water.

Allocation announcements on regulated entitlements have been recognised as increases in water liabilities. Note that the definition of regulated or unregulated entitlements for the purpose of the National Water Account (refer to Glossary) may be different to the meaning applied by the jurisdiction. Please refer to the Water rights, entitlements, allocations and restrictions note for more information on the allocations.

 

Water assets and water liabilities that fail the recognition criteria

The volumes of some water assets in the Melbourne region were not reported in the water accounting statements but replaced by dashes ('–') as they 'failed the recognition criteria' specified in the Australian Water Accounting Standard 1, because:

  • they could not be quantified in a way that is complete, neutral and free from material error, and/or
  • they were unlikely to provide a future benefit to the region or the region's stakeholders.

Water assets that failed the recognition criteria include the urban water supply system, and the recycled water system (see Urban water system note).

 

Changes to water assets and water liabilities that fail the recognition criteria

The volumes of several changes to water assets identified in the Melbourne region were not reported in the water accounting statements but replaced by dashes ('–') as they 'failed the recognition criteria' specified in the Australian Water Accounting Standard 1, because:

  • they could not be quantified in a way that is complete, neutral, and free from material error, and/or
  • they were unlikely to provide a future benefit to the region or the region's stakeholders.

The volumes that failed the recognition criteria include:

  • discharge: groundwater to surface water; and surface water diversion: statutory rights (see Surface water store note)
  • groundwater discharge to landscape; groundwater extraction: statutory rights; and non-allocated extraction: individual users (see Groundwater store note)

 

Restatement of comparative information

In accordance with the Australian Water Accounting Standard 1, comparative year volumes must be restated in the statements if there is a prior period error or a change in item presentation. Information on comparative year volumes restated from the 2016 Account is shown in Table N1. It also includes restatement of comparative information relating to the between-store flows and transfers, which are eliminated from the region's water accounting statements.

 

Table N1 Changes in presentation from the 2016 Account
Item descriptionRevised 2016 volume in 2017 Account
(ML)
Volume reported in 2016 Account
(ML)
Updated information
  
Allocation remaining: individual users3,5123,503
Claims: surface water / Allocation remaining: urban system481,681484,329
Adjustment and forfeiture: individual users600609
Adjustment and forfeiture: urban system / Claims: surface water105,422102,634
Prior period errors  
Claims: surface water / Allocation: urban system548,682548,542
Other groundwater increases12,270 0
Other groundwater decreases 012,270
Transfer (from urban supply system): inter-region431161

 Restatements due to prior-period errors have been made to correct data translation and calculation errors.

 

Transactions within the region

Transactions between water assets and water liabilities within the region (e.g. between the surface water store and the groundwater store) are not reported in the water accounting statements because they do not affect the region's total water assets and water liabilities.

This information is reported in the Water stores note for each water store. These contain internal transactions that were excluded from the consolidated water accounting statements. This ensures that transactions between water assets and water liabilities within the region are still reported.

 

Reconciliations

Introduction

The following reconciliation tables verify:

  • how the region’s closing water storage in the Statement of Water Flows reconciles to the total water assets reported in the Statement of Water Assets and Water Liabilities
  • how the region’s change in water storage in the Statement of Flows reconciles to the change in net water assets reported in the Statement of Changes in Water Assets and Water Liabilities.

 

Closing water storage to total water assets

 

Table N2 Reconciliation of closing water storage to total water assets for the Melbourne region
 2017
ML
2016
ML
Closing water storage presented in the Statement of Water Flows623,298584,129
Surface water  
Storages552,541511,129
Unregulated and Regulated rivers3,1124,553
Groundwater  
Water table aquifers22,05422,054
Underlying aquifers16,56516,565
Urban water system 
Supply system
Wastewater29,02629,828
Recycled water
Total water storage as presented in the Statement of Water Assets and Water Liabilities623,298584,129
   
add Other water assets  
Claims: inter-region647,907592,105
Claims: desalinated water00
   
Total water assets1,271,2051,176,234

 

Net change in water storage to the change in net water assets

 

Table N3 Reconciliation of the net change in water storage to the change in net water assets for the Melbourne region
 2017
ML
2016
ML
Change in net water assets as presented in the Statement of Changes in Water Assets and Water Liabilities87,434(176,324)
adjustments for:  
Change in non-physical water assets  
Surface water  
Claims: inter-region (55,802) 173,518
Claims: desalinated water00
Total change in non-physical water assets(55,802) 173,518
   
Change in water liabilities  
Surface water liability  
Allocation remaining: individual users7,497(2,429)
Commitment: inter-region00
Groundwater liability  
Allocation remaining: individual users00
Total change in water liabilities7,497(2,429)
   
Net change in water storage as presented in the Statement of Water Flows39,169(5,235)