Australian Water Management Review Vol. 1 2014 | Page 53

Melbourne, Living Victoria implementation plan,
Melbourne’s Water Future, and the Plan Melbourne
metropolitan planning strategy contained visionary
statements about overhauling water management
and linking water and urban planning. However,
the implementation details, including proposed
initiatives and outputs, are largely lacking in
initiatives and coordination to deliver whole-ofgovernment solutions. While the initiatives in
Melbourne’s Water Future will deliver incremental
improvements, they will not deliver the kind of
transformational change that is required.

propped up. Institutional inertia limits the range of
acceptable solutions and interventions to those that
would fit into the existing institutional paradigm.
Often, solutions are directed at simply improving
the efficiency of the existing water system, due to
a counterproductive bias towards the sunk costs
associated with the legacy of past decisions.
Melbourne is also often seen as amongst
the leading water sensitive cities, and yet its
transformation journey is similarly torturous. The
issue of sustainability is firmly entrenched in the
Australian national conversation and community
aspiration. Recent policy documents released by the
Victorian Government have contained wonderful,
aspirational statements about transforming water
management and planning in Melbourne. The Living

One of the biggest barriers to connecting the
visionary, aspirational statements at the beginning of
a proposal with the actual initiatives that follow is that
the current economic valuation framework for reform
packages and projects ignores many of the nonmarket beneficial outcomes that can only be realised
through transformational change. In the case of water
sensitive cities, these non-market benefits include
liveability, sustainability and resilience. So even
though governments may be able to see the value of
a water sensitive city, they continue to use outmoded
investment decision-making processes that focus
on minimising costs and maximising efficiencies
to achieve a narrow band of objectives. Thus, they
cannot justify a decision to implement initiatives to
deliver non-market benefits because they can’t yet be
quantified and presented as a dollar figure (though
our research economists are working on it). This
issue, and broader notions of institutional inertia, are
extensively discussed in blueprint2013, where it is
pointed out that fit-for-purpose water solutions can
only be delivered by a fit-for-purpose governance
structure.

In many ways, cities in developing countries are far
more likely to achieve the status of a water sensitive
city, because this sort of institutional inertia isn’t
present. Developing countries, where infrastructure
and institutions are not well established, are more
flexible and conducive to contemporary urban water
solutions. As such, cities in developing countries
are well-placed to leap-frog directly to being water
sensitive city rather than going through an organic
evolution like cities in developed countries.
At the CRC for Water Sensitive Cities, we have just
started working with the City of Kunshan, in the
Suzhou region of China, to see if we can catch the
wave of rapid development in this region and guide
the construction of a water sensitive city that stands
solidly supported by all three pillars. Our new
memorandum of understanding commits the City
of Kunshan, through the government agencies for
both planning and urban construction, to annually
identify and resource at least