ve been made to place water supply issues high on the government's agenda (e.g. CSIRO, 2005). Because of these pressures and responses and the existence of traditional Western technology, Australia may provide a good example of how provision and management of infrastructure in Europe - and possibly the United States and other OECD countries - may be delivered in the future, when climate and demographic changes start to force a reappraisal of the way current services are delivered. INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 5. THE IMPACTS OF CHANGE ON THE LONG-TERM FUTURE DEMAND FOR WATER SECTOR INFRASTRUCTURE It is believed that there is already evidence of climate change in Australia, with droughts in the west and east and a longer-term reduction in rainfall in these areas of about 10%. Reduced rainfall is also responsible for a 50% reduction in observed river flow volumes. Agriculture, which includes substantial areas of irrigated land, accounts for some 67% of total water use despite comprising only some 4% of GDP output (WSAA, 2005). Household use comprises some 9%, and 16% is used in various industries. There is major tension between the acute urban area needs for water, where abstraction costs are some AUD 1 000/megalitre, and farming needs, where charges are only AUD 40/megalitre. The other major challenges are to restore "environmental flows" to waterways that have been degraded due to over-abstraction and to meet increasing customer expectations regarding service levels. Responsibility for water resources and management lies with each state and with local city and urban authorities, although central government has considerable influence controlling finances. In the 1980s a system of water licences was introduced, changing the way water was perceived and priced, and allowing water charges to be increased. Following rejection of the UK privatisation model in the early 21st century, reforms have introduced a hierarchy of organisations and delineat