The study addresses the critical challenge of achieving universal access to safe and affordable drinking water in Australia's small, rural, and remote (SRR) communities by 2030, a target set by Sustainable Development Goal (SDG) 6.1. Despite high overall access rates in most high-income countries, significant disparities persist between metropolitan areas and remote regions. Australia faces this challenge acutely, with numerous SRR communities lacking access to ‘good quality’ drinking water as defined by the Australian Drinking Water Guidelines (ADWG). The exact number of affected communities and individuals is uncertain due to gaps in monitoring and reporting. The elevated costs of ensuring good water quality and the difficulties in maintaining services in these remote areas hinder efforts to improve outcomes. This study aims to quantitatively assess the economic feasibility of achieving SDG 6.1 in Australia. Understanding public willingness to pay (WTP) for improved water quality, along with the associated costs, and identifying enabling conditions for successful implementation, is crucial for informed policymaking and resource allocation. The focus will be on understanding WTP of the broader Australian population to pay for improvements to drinking water quality in SRR communities, even though they may not directly benefit from the infrastructure improvement themselves. This is important because the benefits of improved water quality largely accrue to remote communities, while the costs are more likely to be borne by the broader population. This requires careful examination of economic benefits, costs, and implementation factors.

The paper reviews existing literature on water quality gaps in Australia and other high-income countries. It cites studies highlighting similar challenges in the United States and Canada. It also references work on the costs of water infrastructure in remote areas and the use of cross-subsidies to support service provision in SRR communities. The authors discuss the complexities of delivering public services, particularly in remote areas, and the challenges of adequately valuing the non-market benefits of safe drinking water. Existing studies on WTP for water quality improvements in various contexts are examined to provide context for the current findings. This includes studies from Canada, various OECD countries, and low-income countries. The literature review is instrumental in establishing the context, scope, and significance of the research questions addressed in this paper. The literature also informs the chosen methodology and the interpretation of the results.

The study employs a mixed-methods approach, combining a stated preference survey with cost estimations. A national stated preference survey (n=3,523) was conducted to determine the WTP of Australian households for a program to improve drinking water quality in the 395 identified SRR communities. The survey employed a choice experiment design, presenting participants with various scenarios involving different levels of water quality improvement and corresponding tax increases. Three models were estimated to account for potential response biases, including a full sample model (Model 1), a model considering payment consequentiality (Model 2), and a model incorporating additional mitigation techniques (Model 3). The WTP estimates were then aggregated to the national level, considering different assumptions about non-respondents' WTP. Separately, the incremental capital and operating costs to improve water services in the 395 communities were estimated using panel data fixed effects models. Three scenarios were considered based on the level of water quality complaints. The analysis further incorporates cost disability factors from the Commonwealth Grants Commission to account for the higher costs associated with remoteness. Finally, enabling conditions for successful implementation, drawing upon existing literature and case studies (such as the Torres Strait pilot program), are explored. The methodological rigor ensures a robust evaluation of both the benefits and costs of providing good quality drinking water.

The study found a significant WTP for improved water quality across Australia. The annual aggregate WTP ranged from AU$1.17 billion (Model 3) to AU$4.72 billion (Model 1), with corresponding 10-year net present values of AU$8.25 billion and AU$33.17 billion, respectively. These values are substantially higher than the estimated implementation cost of AU$0.20 - AU$1.30 billion. The estimated costs to provide 'good quality' water to the 395 communities ranged from AU$0.51 million to AU$3.29 million per community. The most conservative cost estimate yielded a benefit-cost ratio of over 5, suggesting a strong economic justification for investment. The analysis revealed that factors such as political affiliation and environmental concerns significantly influenced voting preferences, with left-leaning voters and those concerned about water availability and climate change more likely to support the program. Socio-demographic factors (age, income, education) showed less pronounced effects. The study also identified several enabling conditions for successful water service improvement: cultural competence in community engagement, a systems approach that considers technological, social, cultural, and governance factors, ongoing training and support for local operators, and cross-agency coordination.

The high WTP estimates, exceeding the estimated costs, strongly support public investment in improving water quality in SRR communities. The findings underscore the significant societal value placed on access to good drinking water, even among those not directly affected. The study's robustness is enhanced by the consideration of multiple models and cost scenarios. The identification of enabling conditions beyond financial considerations highlights the importance of a holistic approach that respects cultural contexts and ensures long-term sustainability. These findings have implications for policymaking in Australia and other countries facing similar challenges. The model provides a useful framework for prioritizing investments in water infrastructure and resource allocation, emphasizing the social return on investment in achieving universal access to clean water. The high benefit-cost ratios across various scenarios and models suggest that such an investment is economically viable.

This study provides a comprehensive economic evaluation of achieving universal access to good-quality drinking water in Australia's SRR communities. The high WTP and favorable benefit-cost ratios strongly support substantial public investment. The identification of key enabling conditions offers valuable guidance for program design and implementation. Future research could focus on refining cost estimates with more comprehensive data, exploring alternative financing mechanisms, and conducting more detailed analyses of distributional effects.

The study's limitations include the reliance on self-reported data for water quality issues and the potential for response bias in stated preference surveys. Further, the study doesn't account for the costs and benefits of improving water services in areas where monitoring or reporting gaps exist. Finally, the benefit estimates primarily consider WTP and exclude other potential benefits such as reduced healthcare costs or improved productivity. The data availability for future research is expected to improve to fully assess the wider impact and cost-benefit analysis.