Water Account, Australia methodology

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 consists of 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.

The WAA was developed using the SEEA and the SEEA-Water framework. 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 within the economy and between the environment and the economy (SEEA Water, 2012, S. 3.1). This includes:

• Extraction of water from the environment by economic units (e.g. surface water and ground water extraction, as well as desalination plants);
• Flows of water within the economy (e.g. supply and use of distributed and recycled water) and;
• Final discharges of water from economic units back into the environment (return flows).
   

The monetary supply and use section presents aggregates of monetary data (dollars) in terms of the supply and use of water within the Australian economy. 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: 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 use by the industry supplying the water.
   
• Bulk Water: water supplied to another water supplier. This distinction is required to ensure the same volume of water is not counted twice 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, as much of this is simply redirected into nearby water systems.
   
• Reuse water: represents the transformation of wastewater into another economic product that is distributed throughout the economy (SEEA Water, 2012, S 3.12).
   
• 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: the concept of water consumption provides an indication of 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. The difference between water use and water supply is referred to as water consumption. 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: consist of goods and services provided to households by government and private, non-market producers (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).
   

The Supply and Use tables incorporate six main inputs into the production of the account:

• Description: the WSSS collection is an ABS census of all known water 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 2017-18 inclusive.
• Geography: state/territory and national.
• Key data used:
   
  • Set Water Supply and Sewerage Services industry estimates for:
     
    • self-extracted water
    • water supply to industries and households
    • return flows
    • monetary supply
       
  • Control total for use of distributed and reuse water by industries.
  • Unit price for agriculture water use.
     

• 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 annual EIS with a financial year reference period.
• Series used: 2014-15 and 2017-18 for EWES; 2015-16 and 2016-17 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.
  • Monetary distributed, reuse and sewerage and wastewater services for the following industries:
     
    • Mining
    • Manufacturing
    • Electricity and Gas Supply
    • Waste Collection, Treatment and Disposal Services
    • Other industries
       

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.

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 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. Total self-extracted use by industry by state/territory is used to allocate EWES estimates to a state/territory geography.

Distributed and reuse water: derived from the WSSS collection, the vast majority of water is supplied by the Water Supply and Sewerage Services industry. EWES water supply estimates set total supply for water providers outside of the Water Supply and Sewerage 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 industry by state/territory is used to allocate EWES national estimates to state/territory estimates for the following industries:

• Mining
• Manufacturing
• Waste Collection, Treatment and Disposal Services
   

EWES state/territory allocations are used for Electricity and Gas Supply self-extracted water use.

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

Distributed and reuse water: WSSS and EWES/EIS supply estimates set the control totals and is distributed based on subdivision ratios produced from the EWES/EIS and 3-digit division estimates from the REACS and the Agricultural census.

Wastewater: all wastewater use is currently assigned to the Water Supply and Sewerage 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.

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.
   

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

Distributed water: revenue estimates for the Water Supply and Sewerage 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 and Sewerage Services industry are the sum of retail revenue received for reuse water. Estimates for industries other than the Water Supply and Sewerage 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 and Sewerage Services industry.

Sewerage wastewater: 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.

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

Distributed water: expenditure on distributed water by the Mining, Manufacturing, Electricity, Gas and Waste Services industries is set by EWES and EIS.

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;
• Total residential expenditure was then divided by ‘Total volume of water supplied to residential customers’ (data item W8) to derive a unit price ($ per kL) per utility;
• Annual reports and other administrative information were used to account for some of the utilities that are not in the scope of the NPR;
• For all utilities without a unit price available using the above processes, the NPR weighted average unit price by state/territory was used;
• These unit prices were then multiplied by the total distributed water supply to residential customers for each utility;
• This was then aggregated to produce state/territory and national level household distributed water expenditure estimates.
   

Reuse water: reuse water follows the same methodology as distributed water use.

Bulk water, distributed: expenditure on distributed bulk water mirrors the supply revenue values.

Bulk water, reuse: expenditure on reuse bulk water mirrors the supply revenue values.

Sewerage and drainage services: EWES and EIS provided estimates for Mining, Manufacturing, Electricity, Gas and Waste Services. Estimates were available in the 2014-15 EWES and modelled forward using a Gross Value Added index by industry by state/territory. The gap between total supply and total industry use is allocated as household use.

Return flows: not valued.

Distributed water: total supply is used as the control total, with differences between supply and use allocated to use by Other industries (divisions E-S).

Reuse water: total supply is used as the control total. A weighted balancing approach was used to address discrepancies between the supply control total and use total, with the difference allocated between industries/households in the same proportions as water use.

Bulk water, distributed: no balancing required.

Bulk water, reuse: no balancing required.

Sewerage and Drainage Services: total supply less total industry use is allocated to Households use.

The summary tables aim to highlight key indicators of the WAA in a time series, and provide other relevant information linked with data from the supply and use tables. These indicators aim to enhance the ability of users to rapidly synthesise key stories. The data items presented in these tables, and not represented in the supply and use methodology described above, are described below.

Total water use by industry: sum of self-extracted water, distributed water and reuse water use by industries.

Total water use by industry (less Electricity, Gas, Water and Waste Services): sum of total self-extracted water, distributed water and reuse water use by industries, less the sum of total self-extracted water, distributed water and reuse water by the Electricity, Gas, Water and Waste Services industries.

Note that a majority of the water used by these industries is either supplied to other users or returned to the environment (e.g. hydroelectricity water use).

Total water use by households: sum of total distributed water and reuse water for households (note that self-extracted water use by households, including rainwater tanks and bores, is excluded from this edition of the WAA).

Gross Value Added (GVA): Chain volume measures; sourced from Australian National Accounts: State Accounts (cat. no. 5220.0).

Estimated population as of 30 June: sourced from Australian Demographic Statistics (cat. no. 3101.0).

Estimated number of households at 30 June: sourced from Household and Family Projections, Australia (cat. no. 3236.0).

Total water use (less Electricity, Gas, Water and Waste Services) per capita: total water use, less water use by the Electricity, Gas, Water and Waste Services industries, divided by the estimated residential population.

Total household water use per household: total water use by households (excluding self-extracted water) divided by the number of households.

Total water consumption: total self-extracted water use less return flows.

Water intensity: total water consumption (ML) divided by Industry Gross Value Added ($ million).

Water productivity: Industry Gross Value Added ($ million) divided by total water consumption (ML).

Expenditure per kL of water used by industry, distributed: expenditure on distributed water by industry, divided by total kL of distributed water used by industry.

Expenditure per kL of water used by households, distributed: expenditure on distributed water by households, divided by total kL of distributed water used by households.

Total expenditure by industry and households per capita, distributed: total expenditure on distributed water by industry and households, divided by the estimated residential population.

Total household expenditure per household: total expenditure on distributed water by households, divided by households.

Area-averaged rainfall: data sourced from Bureau of Meteorology, Climate change – trends and extremes.

Accessible volume in major dam storages as of June 30: data sourced from Bureau of Meteorology, Water Storage Dashboard.

Where necessary, tables have had values suppressed to protect confidentiality.