# Water Account, Australia methodology

Latest release
Reference period
2020-21 financial year

The Water Account, Australia (WAA) is an environmental-economic account produced by the Australian Bureau of Statistics (ABS), which is compiled, as far as possible, in accordance with the System of Environmental-Economic Accounting (SEEA) and the SEEA-Water frameworks. It includes water supply and use tables for both physical volumes and monetary values.

The following section outlines the broad concepts, sources, and methods for the Water Account.

## Concepts

The WAA was developed using the SEEA and the SEEA-Water frameworks. SEEA was first published by the United Nations in 1993 and was elevated to an international statistical standard in 2012. The SEEA framework extends the boundaries of the System of National Accounts (SNA) framework to include environmental resources, which occur outside the economic production boundaries that are measured by the SNA.

Water supply and use tables describe water flows from the environment to the economy, within the economy, and from the economy to the environment (SEEA-Water, 2012, S. 3.1). This includes:

• extraction of water from the environment by economic units (e.g., surface water and groundwater extraction, as well as sea water for desalination)
• flows of water within the economy (e.g., supply and use of distributed and recycled water)
• final discharges of water from economic units back to the environment (return flows).

The monetary supply and use tables present aggregates of monetary data (dollars) in terms of the supply and use of water within the Australian economy. Monetary supply and use tables illustrate the economic transactions associated with the use of distributed and reuse water and the provision of sewerage, drainage and wastewater services.

Key concepts are listed below:

### Extraction of water (self-extracted water)

Refers to the movement of water from the environment into the economy, either permanently or temporarily. SEEA identifies the environment as the supplier and the industry/household as the user (SEEA-Water, S 3.6). Extracted water can be further classified into three main sources:

• Surface water: water on the surface of continents such as in a river, lake, or wetland.
• Groundwater: water found underground in the cracks and spaces in soil, sand and rock. It is stored in and moves slowly through geologic formations of soil, sand and rocks called aquifers.
• Seawater for desalination: saline water that is extracted from the ocean or marine estuaries with the express purpose of creating usable water.

### Distributed water

Refers to water flows from one user (or supplier) to another user after extraction. This includes the supply and use of potable and non-potable water from one economic unit to another (SEEA-Water, 2012 S 3.31). In the WAA, distribution losses are recorded as water use by the industry supplying the water (usually the Water supply, sewerage and drainage services industry).

### Bulk water

Water transferred/delivered from one water supplier/provider to another water supplier/provider. This distinction is required to ensure the same volume of water is not counted twice (in the physical supply and use tables) as the water moves through the economy; however, these exchanges are valued in the monetary tables.

### Wastewater

Represents water that has been used by an economic unit or household, and then transferred between economic units. The industry collecting wastewater is a “user” in the physical supply and use tables, while in the monetary tables that industry is a “supplier” of sewerage and wastewater services (SEEA-Water S 3.9). The most commonly understood form of wastewater is sewage; however, non-sewage wastewater products are also included (SEEA-Water, 2012, S 3.12). Stormwater and drainage water are not currently included in the supply and use tables in the WSS, as much of this is simply redirected into nearby water systems. However, in Australia, there is some infiltration of stormwater into sewerage systems in many regions, so naturally some stormwater is included in the wastewater estimates.

### Reuse water

Represents the transformation of wastewater into another economic product that is distributed throughout the economy (SEEA-Water, 2012, S 3.12). In the WAA this includes the transformation of stormwater and drainage water.

### Return flows

Represents the flows of water from industries and households to the environment. This excludes flows of water to wastewater treatment facilities but includes flows of water from treatment facilities directly to the environment. The SEEA records return flows as use by the environment (SEEA-Water, 2012, S 3.15).

### Consumption

Water consumption refers to the amount of water that is lost by the economy during use, in the sense that the water has entered the economy but has not returned to the environment. Water is instead incorporated into products, evaporated, transpired by plants or simply consumed by households or livestock. Water consumption is equal to the the difference between water use and water supply. The concept of water consumption used in SEEA-Water is consistent with the hydrological concept. It differs, however, from the concept of consumption that is used in the National Accounts, which instead refers to water use (SEEA-Water, 2012, S 3.44).

### Industry classification

The WAA uses the Australian and New Zealand Standard Industrial Classification (ANZSIC) for its industry classification. The ANZSIC is implemented for all ABS industry-classified statistics and is a fundamentally important reference for organisations wishing to interpret these statistics or to compile their own statistics on a comparable basis.

### Households’ expenditure

In the monetary account, this refers to final consumption expenditure by households, or expenditure incurred by resident households on the consumption of water and related services (including sewerage services).

### Social benefits paid in kind

Social benefits paid in kind consist of goods and services provided to households by government and private, non-market producers (non-profit institutions serving households, or NPISHs), either free or at prices that are not economically significant (SNA, 2008, S 8.141).

### Taxes

Compulsory, unrequited payments, in cash or in kind, made by institutional units to government units (SNA, 2008, S 7.71).

### Subsidies

Current unrequited payments that government units, including non-resident government units, make to enterprises on the basis of the levels of their production activities or quantities or values of the goods or services that they produce (SNA, 2008, S 7.98).

### Exports

Exports of goods and services consist of sales, barter, or gifts or grants, of goods and services from residents to non-residents (SNA 1993, S 14.88).

### Imports

Imports of goods and services consist of sales, barter, or gifts or grants, of goods and services from non-residents to residents (SNA 1993, S 14.88).

## Data sources

### Water supply and sewerage services (WSSS) collection

Description: the WSSS collection is an ABS census of all known water and wastewater suppliers/utilities across Australia. It collects physical and monetary data on water supply, water treatment, and return flows of water to the environment.

Frequency: annual, financial year.

Series used: 2014-15 to 2020-21 inclusive.

Geography: state/territory and national.

Key data used:

Water supply, sewerage and drainage services industry estimates for

• self-extracted water
• water supply to industries and households
• wastewater collected
• return flows
• monetary supply.

The WSSS is used as a control total for use of distributed and reuse water by industries; it also sets the unit price for Agriculture water use.

### Energy, water and environment survey (EWES) and Environmental indicators survey (EIS)

Description: the EWES is an ABS survey conducted every three years, with the EIS conducted in the intervening two years. The EWES provides a more comprehensive range of data across industries, as well as providing benchmark estimates for selected data items. The EWES has a larger sample size than the EIS, therefore, some businesses/organisations selected for the EWES may not be selected for the EIS.

Frequency: triennial EWES and EIS with a financial year reference period.

Series used: 2014-15 and 2017-18 for EWES; 2015-16, 2016-17, 2018-19, 2019-20, and 2020-21 for EIS.

Geography: state/territory and national (EWES); national only (EIS).

Key data used:

Self-extracted use, distributed supply, reuse supply, and return flows data for the following industries:

• Mining
• Manufacturing
• Waste collection, treatment and disposal services
• Electricity and gas supply.

Used to disaggregate division level use data from the WSSS collection.

Price paid for distributed and reuse water for the following industries:

• Mining
• Manufacturing
• Electricity and gas supply
• Waste collection, treatment and disposal services
• Other industries.

Expenditure of sewerage and wastewater services use for the following industries:

• Agriculture
• Manufacturing
• Electricity and gas supply
• Waste collection, treatment and disposal services
• Other industries.

### Rural environment and agricultural commodities survey (REACS)/Agricultural census

Description: the REACS is run annually by the ABS in between the five-yearly Agricultural census. The scope of the REACS and Agricultural census collection is all businesses operating agricultural land in Australia who have an estimated value of agricultural operations (EVAO) of $40,000 or greater. Frequency: REACS is run annually in the years between the five yearly Agricultural census. The last Agricultural census reference period was 2020-21. Series used: 2014-15, 2016-17, 2017-18, 2018-19, and 2019-20, for REACS; 2015-16 and 2020-21 for Agricultural census. Geography: state/territory and national Key data used: • to estimate Agriculture self-extracted water use • to disaggregate division level use data from the WSSS collection • to estimate GVIAP. Note: the agricultural water use data presented in this publication is different to the data presented in the ABS publication Water Use on Australian Farms (WUOAF). This is because: (a) the multiple data sources used for the WAA compilation, compared to the single source of ABS survey data (REACS) used to produce WUOAF; (b) the WUOAF publication presents an ‘activity view’ of agriculture – therefore, its estimates of water use are slightly different to the ‘industry view’ estimates presented in the physical water supply and use tables in WAA; and (c) the scope of WUOAF is all businesses operating agricultural land in Australia who have an estimated value of agricultural operations (EVAO) of$40,000 or greater, while the WAA includes all agricultural businesses.

The Agriculture ‘industry' view presented in WAA includes only agricultural activity that occurs in businesses where the primary income-producing activity (i.e. the activity with value added that exceeds the value added of any other activity carried out by the same business) of the business is agricultural production.

Also note that losses from the distribution system for agriculture (e.g. evaporation and seepage from irrigation channels) are attributed to the Water supply industry rather than the Agriculture industry in WAA.

### Australian National Accounts: State accounts

Description: contains state and territory estimates of gross domestic product (referred to as gross state product) and its components.

Frequency: annual.

Series used: Industry Gross Value Added (GVA): Chain volume measures, Industry Gross Value Added 2014-15 to 2020-21.

Geography: state/territory.

Key data used:

• used to create state/territory indexes to move EWES data forward and backwards
• provides Industry Gross Value Added (GVA) estimates for the summary tables
• social benefits paid in kind, taxes, subsidies, imports and exports.

### National Performance Report – Bureau of Meteorology

Description: the Bureau of Meteorology’s Urban National Performance Reports benchmark the pricing and service quality of Australian urban water utilities. Indicators include water resource supply and usage, financial operations, bills and pricing, assets, water quality compliance and customer performance. The reports are published annually and prepared independently by the Bureau of Meteorology, State and Territory governments, and the Water Services Association of Australia; the reports support commitments under the National Water Initiative.

Frequency: annual

Series used: 2014-15 to 2020-21

Key data used: estimation of household price of water

Summary indicators: in addition to the data that feeds into the supply and use data section, the summary tables include data to assist users in contextualising the presented information. The sources for these data items are noted below.

### Australian Demographic Statistics

Description: this quarterly release contains the most recent estimates of the resident population (ERP) of Australia and the states and territories based on the results of the 2021 Census of Population and Housing held on 9 August 2021, and the addition of quarterly components of population growth. The ABS has used the 2021 Census to produce final rebased estimates of the resident population. This release contains the latest available statistics on births, deaths (including infant deaths) and overseas and interstate migration.

Frequency: quarterly

Series used: June 2015 to June 2021

Geography: state/territory and national

Key data used: estimated residential population as of end of financial year.

### Household and Family Projections, Australia

Description: the latest household estimates and projections in this publication cover the period 2016 to 2041 for Australia, the states and territories, capital cities and rest of state/territory regions. The projections of households, families and persons by living arrangement are based on Series I, which assumes no change in 2016 living arrangement propensity.

Frequency: every 5 years with annual estimates

Series used: 2016 to 2041 publication for 2015-16 to 2018-19; 2011 to 2036 publication for 2014-15.

Geography: state/territory and national

Key data used: estimate of household numbers.

### Bureau of Meteorology, Climate change – trends and extremes

Description: provides climate indicators available for Australia, states and territories as well as other geographies.

Frequency: monthly

Series used: financial years - 2014-15 to 2020-21

Geography: state/territory and national

Key data used: area-averaged rainfall by state/territory and national.

### Bureau of Meteorology, Water Storage Dashboard

Description: a dashboard featuring information on 305 major water storages around Australia

Frequency: daily

Series used: 30 June 2015 to 30 June 2021

Geography: state/territory and national

Key data used: estimates of accessible volume in major dam storages as at end of financial year.

### Value of Agricultural Commodities Produced (VACP), Australia

Description: the VACP is run annually by the ABS. It applies a unit price to the agricultural commodity volume estimates produced by REACS to produce a valuation of all produced agricultural commodities.

Frequency: VACP is run annually.

Series used: 2014-15 to 2020-21

Geography: state/territory and national

Key data used:

• State based unit prices for agricultural commodities.

## Methods

The methods used to compile the data in the WAA have been split into four broad groups that align with the data cubes published in this account:

1. Physical supply and use
2. Monetary supply and use
3. Summary table
4. Gross Value of Irrigated Agricultural Production (GVIAP).

All data items in the WSSDS industry highlights data cube were sourced directly from the WSSS collection with no notable methodological adjustments.

### Methods - Physical supply and use of water

#### Physical supply of water

The general methods used to compile the physical supply and use tables of the water account are relatively straightforward. Data from the WSSS collection operates as a stabilising component, acting as a spine for the compilation. The basic premise behind this decision is that the WSSS collection is a relatively complete census of all water providers – a population who, by necessity, understand the subject matter. The EWES/EIS surveys are utilised to inform industry splits, excluding Agriculture, and provide detail that is lacking in the WSSS collection instrument. The Agricultural census and surveys (REACS) fill a similar niche for Agriculture.

With this in mind the following represents a broad outline of how the data feeds into each supply and use water category.

Self-extracted water: the sum of all self-extracted water use sets the supply figure for the environment to the economy.

Distributed and reuse water: derived from the WSSS collection, the vast majority of water is supplied by the Water supply, sewerage and drainage services industry. EWES water supply estimates set total supply for water providers outside of the Water supply, sewerage and drainage services industry, while total use by industry is used to allocate these data to states/territories.

Wastewater: currently the WAA does not include estimates for the supply of wastewater to sewerage systems, split by individual industries and households. This is a known data gap that will be explored in future iterations of the WAA. In the interim, the total wastewater supplied is estimated in the account. The total wastewater supply is aligned to the total wastewater received by subdivision 28, sourced from the WSSS collection.

Return flows: formerly referred to as "regulated discharges" in the WAA, return flows estimates are sourced from the WSSS collection (state/territory and national) and EWES (national) surveys, however no data is currently available for return flows from Agriculture and households. These are known data gaps that will be explored in future iterations of the WAA. Total use by the Waste collection, treatment and disposal services industry is used to allocate EWES national estimates to state/territory estimates. Mining and Manufacturing utilise total self-extracted water in the same way. For the Electricity and gas industry, return flows estimates were aligned with self-extracted surface water.

#### Physical use of water

Self-extracted water:  WSSS, EWES, EIS, and REACS all collect data on self-extracted water use – these data are utilised directly.

Distributed and reuse water:  WSSS and EWES/EIS supply estimates set the total. WSSS sets control totals for ANZSIC divisions A, B, C, and D and is distributed based on subdivision ratios produced from the EWES/EIS and ANZSIC 3-digit division estimates from the REACS and the Agricultural census. EWES Supply and the residual WSSS supply is allocated to other industries. Use by the Water supply, sewerage and drainage services industry is sourced from the WSSS and includes water losses in distribution.

Wastewater: all wastewater use is currently assigned to the Water supply, sewerage and drainage services industry, and collected is via the WSSS collection. While some other industries are likely treating a small amount of wastewater this would not involve wastewater transferring between institutional units and is therefore out of scope.

Return flows: represent flows from the economy to the environment; under SEEA conventions (SEEA Water S 3.16) all return flows are attributed to the environment. Data collected via the WSSS, EWES and EIS.

Note: environmental flows are out of scope in this edition of the WAA. Environmental flows relate to (a) statutory requirements to maintain specific water regimes or (b) specific entitlements, which accrue annual allocations of water that can be extracted (or left in-stream) for environmental purposes.

### Methods - Monetary supply and use of water

The monetary water supply and use tables are displayed in purchasers’ and current prices. They generally follow the same format as the physical supply and use tables, however there are a number of key differences, as outlined below:

• Self-extracted water and return flows are not currently valued as, generally, no volumetric charge is applied and there is a lack of available data. The majority of water that is extracted by the user and has a volumetric charge is included in distributed water in both the physical and monetary supply and use tables.
• Bulk water, or the supply of water between water suppliers, is valued in the monetary tables. As this is an intra-industry transfer the water flows/transactions are not included in the physical supply and use tables as this would lead to a double-counting of the supply of the water.
• The monetary supply and use tables also include relevant statistics from the Australian National Accounts, Input-Output Tables. These include import/export values, relevant taxes and subsidies, and social benefits paid in kind.
• Supply and use balancing is required as discrepancies exist between supply and use totals due to differing compilation techniques and data sources.

#### Monetary supply of water

Self-extracted water: self-extracted water supply is currently not valued in the account.

Distributed water: revenue estimates for the Water supply, sewerage and drainage services industry are the sum of retail revenue received for distributed (potable and non-potable) water. Estimates for industries other than Water supply and sewerage services industry utilise household and industry derived unit values (prices) and the physical volume of distributed water supplied by these industries from the physical supply and use tables.

Reuse water: revenue estimates for the Water supply, sewerage and drainage services industry are the sum of retail revenue received for reuse water. Estimates for industries other than the Water supply, sewerage and drainage services industry utilise industry and household derived unit values (prices) and the physical volume of reuse water supplied by these industries from the physical and supply and use tables.

Bulk water, distributed: supply is the sum of the associated revenue from the WSSS collection. All revenue is allocated to the Water supply, sewerage and drainage services industry.

Bulk water, reuse: supply is the sum of the associated revenue from the WSSS collection. All revenue is allocated to the Water supply, sewerage and drainage services industry.

Sewerage wastewater: supply is set by total revenue received from sewerage charges and trade waste charges, as reported in the WSSS collection.

Return flows: currently not valued in the account.

#### Monetary use of water

Self-extracted water: currently not valued in the account.

Distributed water use for the Mining, Manufacturing, Electricity, Gas and Waste services industries are derived by multiplying the price of water paid by the physical use. The price is derived from data collected on the Energy, water and environment survey (EWES) and Environmental indicators surveys (EIS), by dividing expenditure on water by the volume of water used.

Agricultural distributed water expenditure was calculated using data from the WSSS collection. An agricultural unit price was derived by dividing total revenue received for distributed water by the total volume of distributed water, at a state/territory level, for irrigation units. These unit prices were multiplied by the agricultural use of distributed water estimates from the physical supply and use tables

Household estimates are derived by multiplying a unit price by physical use. The unit price is calculated using the Bureau of Meteorology’s National Performance Reports (NPR) data via the following methodology:

• The ‘Typical residential bill: water supply’ (data item P3, which includes fixed charges, usage charges and special levies) was multiplied by ‘Number of connected residential properties: water supply’ (data item C2) to derive total residential expenditure at a utility level.