Australia's Kalgoorlie Water Bank project misses out on federal budget funding

It is called Water Bank and with an estimated total cost of $92 million it has the potential to break the bank.

But this "shovel ready" project designed to drought-proof Australia's biggest outback city remains in limbo after missing out on funding in this week's federal budget.

While Tuesday's budget included more than $1.3 billion for the National Water Grid Fund, the Commonwealth has turned off the tap for Water Bank at this stage.

A spokesperson for Water Minister Murray Watt told the ABC the budget was "financially responsible" and showed "spending restraint across all policy areas".

Water Bank will be considered in "future budget rounds", the spokesperson said.

What is Water Bank?

Western Australia's historic mining centre of Kalgoorlie-Boulder, about 600 kilometres east of Perth, is famous for the discovery of gold in 1893.

But water is almost as valuable as gold in a city home to 31,268 people, who rely on a 566km-long, 123-year-old pipeline for their drinking water.

Only so much water can be pumped along the pipeline.

For decades, the City of Kalgoorlie-Boulder has irrigated public spaces with treated effluent.

That includes an 18-hole grass golf course, which soaks up about 3 megalitres a day in summer.

But after signing a multi-million-dollar deal to supply large quantities of recycled water to a mining company, the city's storage dams dried up in 2023, resulting in water restrictions for the local population.

It forced the City of Kalgoorlie-Boulder to come up with a long-term solution, dubbed Water Bank.

The project involves building new dams to harvest additional stormwater and growing supplies of recycled water stored in 27 reservoirs and tanks across Kalgoorlie-Boulder.

Three years of lobbying

Prime Minister Anthony Albanese first heard about the project in February 2023 at the peak of water restrictions when he met with then-mayor John Bowler.

Mr Bowler, a former state MP who served eight years as mayor, raised water security, during the prime minister's visit, as the single biggest issue facing the city.

"When I met Prime Minister Albanese … he gave me the indication that Kalgoorlie, at the end of the world's longest water pipeline, would be at the forefront [for investment in water security]," he said.

"We never got a dollar, so I remain hopeful but maybe a bit sceptical."

Since that meeting, the City of Kalgoorlie-Boulder has stepped up its lobbying, with current Mayor Glenn Wilson making at least seven trips to Canberra since his election in late 2023.

Assistant Minister to the Prime Minister, and Perth MP Patrick Gorman, said he had been well briefed on Water Bank.

"I have met with the City of Kalgoorlie-Boulder and I understand the needs and the challenges … they have done an excellent job of putting their case forward," he said.

The city's application was for $9.5 million from the National Water Grid Fund to progress stage one of Water Bank.

It was boosted by the WA government's pledge of $5 million towards stage one at last year's state election.

Mr Wilson described the "crucial" project as "shovel ready".

"It's about what we can do to capture more water, increase our efficiency and create revenue streams for the city at the same time," he said.

Liberal MP for O'Connor Rick Wilson was "bitterly disappointed" by Water Bank's omission.

The budget papers show WA will receive $106 million over five years through the National Water Grid Fund.

The fund has previously been tapped for $5 million towards a preliminary business case for a desalination plant in WA's Great Southern.

It has also jointly funded an $11.7 million project to expand drinking water supplies at Halls Creek in the Kimberley.

Former City of Kalgoorlie-Boulder councillor and Liberal staffer Nardia Turner said it ignored the region's contribution to the national economy.

"Incredibly disappointing, incredibly short-sighted … I just don't know why a mining region which contributes so much to the economy continually gets pushed to the back [of the queue]," she said.

"Without water you can't have progress for any industry."

The onus now appears on the city to get on with the job of Water Bank, but will ratepayers be forced to bear the cost?

"We will review the project," Mr Wilson told the ABC.

For now at least, the glass is half full, with heavy rainfalls in recent months filling dams to 100 per cent capacity to ensure Kalgoorlie-Boulder's immediate water supply is secure.