The benefits of meeting SDG 6.1 ‘water for all’ in remote and rural Australia far exceed the costs.
RE&D Research Seminar
Date & time
Provision of safe drinking water remains a challenge in regional and remote Australia, particularly in small towns and communities. In order to make decisions about resource allocation for drinking water services, policy-makers require information about the benefits and costs associated with such programs. A key issue is that conventional benefit-cost-analyses for public services tend to focus exclusively on the targeted population. The aim of this study is to estimate the societal benefit to Australian residents for a program to improve water quality for people currently exposed to sub-standard services. To this end, we apply the stated preference valuation approach though an online survey across a sample of over 3,500 Australian residents. We elicit respondents’ willingness-to-pay, through a household tax increase, for a program such that water quality meets all Australian Drinking Water Guidelines, for up to 260,000 people currently affected in 395 small towns and communities (<10,000 inhabitants). The estimated average willingness-to-pay for the program lies between A$781 and A$847 per household per year, over 10 years. Aggregation across the Australian population, using a conservative approach, for the entire duration of the program, indicates a social benefit within the range of A$24 and A$33 billion. The costs (capital and O&M) of similar proposed programs across Australia, and also throughout NSW and WA, are in the order of $3.3 million per community. On this basis, the estimated total cost for the full program to improve drinking water quality in 395 affected towns and communities is $1.3 billion. The estimated societal benefits of improving the supply of safe drinking water across Australia’s small towns and communities far outweigh the financial costs. We propose that decision-makers responsible for funding water infrastructure take into account the strong public support and the societal benefits of a program to deliver safe drinking water for all.
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