Integration means different things to different people and as a consequence appears to only partially deliver on promised outcomes. For effective integrated water cycle management these outcomes should include improved water use efficiency, less waste, environmental sustainability, and provide secure and reliable supply to meet social and economic needs. The objective of integration is the management and combination of all these outcomes as part of a whole, so as to provide better outcomes than would be expected by managing the parts independently. Integration is also a consequence of the Water Reforms embarked on by the NSW State Government in 1995. The key goals of the reforms are clean and healthy rivers and groundwaters, and the establishment of more secure water entitlements for users. They are also essential for meeting the Council of Australian Government (COAG) water management strategies. The policies and guidelines that formed the NSW Water Reforms were the basis of the Water Management Act 2000 (NSW) (WMA) which is the legislative framework for water management in NSW. The NSW Department of Land and Water Conservation has developed an approach to integrated water cycle management for rural centres in NSW based on a catchment and policy context. This approach includes consideration of catchment wide needs and issues, environmental sustainability, government policy and community objectives in the development of an integrated water cycle plan. The approach provides for a transparent assessment of priorities and how to deal with them, and while specific to urban centres, could easily be expanded for use in the management of the whole of the catchment water cycle. Integration of the water cycle is expected to offer benefits to the local environment, community and economy. For instance, any unused proportion of an urban centre's water entitlement, or an offset against this entitlement created through returned flows (such as via good quality sewage effluent discharge to a river), can provide a surplus which is available to be traded on an annual basis. Further, improved demand management within an urban centre can be expected to result in a reduction in abstraction against the licence entitlement. This may result in the increased availability of in-stream water for environmental or other purposes and is expected to increase the economic value of returned water. Improved water use efficiencies are also expected to result in reduced capital works (and their associated costs) as the efficiency of service delivery and resource use improves. In this paper an example of the application of this process is provided and the outcomes discussed.

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