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Real Business : Issue 3 2008
FUTURE FOCUS FLOWCHART C limate change affects us all. Australia’s Murray River system, as just one example, defines seemingly ever-present dry conditions. The two-year period to the end of November 2007 was the system’s lowest on record. In preparing for the solution, it is the depth of information available that will make the difference – and one in which water accountants specialise. According to Professor Jayne Godfrey, deputy dean of research at the faculty of business and economics at Monash University, water accounting involves recording, report- ing, and interpreting data relating to water transactions, transformations and events. “Water accounting has the potential to radically transform water policy, and the resourcing of the water industry,” she says. “This change will be achieved only through fundamental changes to the nature and integrity of data underpinning decision making, and by the presentation of this data in a format, context and timeframe that facil- itates effective, informed decision making.” With enormous potential as a positive change agent, public and investor confidence in water accounting is fundamental. Professor Keryn Chalmers, head of the accounting and finance department at Monash University, provides insight into the importance of a conceptual approach. “Water accounting embraces more than the reporting of water volumes,” she says. “Water accounting is being developed from a concep- tual approach with due attention to questions such as who should be reporting, why they should be reporting, BETTER ACCOUNTING FOR WATER WILL HELP US USE THIS VALUABLE RESOURCE MORE EFFECTIVELY what should be reported and how it should be reported. Addressing these questions provides a conceptual base to inform the development of reporting requirements that will enhance public and investor confidence in the management and use of this precious resource.” “The financial reporting framework provides a strong reference point for developing a water-reporting framework, given that the objective of financial reporting is to provide information useful for making and evaluating decisions about the allocation of resources”. Such important and wide-reaching deci- sions are made by government agencies such as the National Water Commission (NWC). Reporting directly to the Australian minister for climate change and water, Senator Penny Wong, the NWC is the lead agency for driving national water reform under the National Water Initiative – Australia’s blueprint for how water will be managed into the future. In addition to providing advice on national water issues to the Council of Australian Governments (COAG) and the Australian government, the NWC helps parties to the National Water Initiative (NWI) meet their commitments under this intergovernmental agreement. It also manages the $200 million Raising National Water Standards Program and the National Groundwater Action Plan. The importance of meeting current and future water needs underlines the impor- tance of the continued development of this emerging field. “Understanding the water we have is important if we want to be able to make decisions to use water in a sustainable way,” says Ken Matthews, CEO of the National Water Commission. “Australia needs to know how much water there is, where it is, who is using it and what it is being used for. BY STEWART BELL 28 REAL BUSINESS ISSUE 3, 2008
Issue 1 2009