National Water Account 2018

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Key findings

Climate and water

Water Accounting Statements

Supporting information

Region description

Reference information

Melbourne: Governance

Accountability statement

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 2018, such as extreme precipitation and significant water rights purchases. This information is publicly available elsewhere.
• Asset changes for water stores (surface water, groundwater and urban water) 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.

Matthew Coulton

a/General Manager Water

Bureau of Meteorology

28 February 2019

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
• 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 accounting 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 2017 to 30 June 2018.

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 access and use 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 recharge: groundwater from surface water (see Surface water store note)
• groundwater discharge to landscape (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. Comparative year volumes are not required to be restated if there is a change in scope or methodology, or subsequent data availability for the quantification of an item.

Water use

The following comparative year volumes related to water use were restated from the 2017 Account due to prior period errors:

• Claims: inter-region
• Allocation remaining: individual users
• Allocated diversion: individual users
• Adjustment and forfeiture: individual users
• Non-allocated diversion: individual users
• Other groundwater increases
• Other groundwater decreases

Urban water system

Comparative year volumes for several urban flow volumes were restated from the 2013, 2014 and 2015 Accounts due to a change in presentation associated with amendments to the Water Regulations in 2016. A primary aim of these amendments was to reduce reporting burden on urban utilities and town councils.

The change in presentation included the separation of water flows associated with the urban water supply system from flows associated with the wastewater and recycled water systems. Previously, these flows were classified as a single flow from the urban system. Evaporation from the urban system was reclassified as a loss from the wastewater and recycled water system, and leakage from the urban system to either groundwater and the landscape was reclassified as a single leakage item. The comparative year items restated in the 2018 Account include:

• Supply system discharge: surface water
• Wastewater discharge: surface water
• Other wastewater and recycled water decreases
• Leakage: groundwater
• Delivery: inter-region.

Between-store flows

In the 2013–2017 Accounts, transactions between water assets and water liabilities within the region (e.g. between the surface water store and the groundwater store) were not reported in the water accounting statements. In the 2018 account, however, these between-store transactions were included as they provide a better understanding of the water movement that occurs at each water store or system. Comparative year volumes for these transactions are also 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

 * between-store claims

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

* between-store claims / liabilities