Frontier Economics Pty Ltd

Frontier Economics has a professional staff of around 30 in Australia and Singapore. In addition, Frontier Economics can draw on the experience, expertise, and resources of its associate offices in Europe.
Founded in 1999 by a team of highly experienced consulting economists, Frontier Economics is an economic consultancy specialising in applied microeconomic analysis, including market design, industry and price regulation, institutional restructuring, investment evaluation and policy design.
Frontier Economics has worked extensively in most major sectors of the economy in Australia, New Zealand and the Asian region. As we apply our expertise across all industries, we are highly skilled at quickly identifying and understanding critical issues and ascertaining how applied economics can lead to the right answers
Our water practice combines in-depth knowledge of the water industry in Australia and internationally, with the ability to apply advanced economic techniques and analysis. We provide consulting services to a range of clients across the water sector including governments, water authorities, regulators, and the private sector to assist them in addressing many of the fundamental challenges associated with meeting society’s demands for safe, efficient, sustainable and reliable water services.

Organisational Capability

Frontier Economics has a professional staff of around 30 in Australia and Singapore. In addition, Frontier Economics can draw on the experience, expertise, and resources of its associate offices in Europe.
Founded in 1999 by a team of highly experienced consulting economists, Frontier Economics is an economic consultancy specialising in applied microeconomic analysis, including market design, industry and price regulation, institutional restructuring, investment evaluation and policy design.
Frontier Economics has worked extensively in most major sectors of the economy in Australia, New Zealand and the Asian region. As we apply our expertise across all industries, we are highly skilled at quickly identifying and understanding critical issues and ascertaining how applied economics can lead to the right answers
Our water practice combines in-depth knowledge of the water industry in Australia and internationally, with the ability to apply advanced economic techniques and analysis. We provide consulting services to a range of clients across the water sector including governments, water authorities, regulators, and the private sector to assist them in addressing many of the fundamental challenges associated with meeting society’s demands for safe, efficient, sustainable and reliable water services.

Projects

International survey of water sector reforms
Frontier Economics was engaged by the New Zealand Department of Internal Affairs (DIA) to prepare a report that surveyed and synthesised the experience of water sector reforms in a number of jurisdictions, including Ireland, Great Britain, Australia and certain parts of New Zealand. The focus of the report was on the understanding the drivers and outcomes of aggregation of small water service providers--typically local councils--into larger scale providers. Our report examined the motivations for such reforms in the jurisdictions of interest, the impact on customer outcomes, efficiency and financial impact on councils. We also considered the impact of other reforms that coincided with the aggregation of providers, such as the introduction of economic regulation, improvements in water quality and service standards, and changes to governance arrangements and models. Our work was an input to DIA's Three Waters review--a major, cross-agency review into water sector in New Zealand (2019).
Economic Assessment of Liveability Associated Health Benefits of Water Industry Investments
The Water Services Association of Australia (WSAA) engaged Frontier Economics to assist in understanding and quantifying the liveability-associated health benefits of water industry investments in order to better inform investment decisions. This project deliberately focused on the health benefits associated with Integrated Water Cycle Management (IWCM) – broadly characterised by projects with physical connections between water, land and related resources. Our study: o Defined the key economic evaluation framework necessary to identify the potential health-related impacts from water urban water investments. o Articulated the cost and benefits and logical causal linkages between water investments and health benefits o Developed a conceptual framework and tool to assist in the quantification of these benefits (i.e. reduced health care costs and reduced mortality and morbidity), accounting for different contexts (e.g. regions served, demographic characteristics etc). o Applied our framework and tool to three illustrative case studies (2018)
Measuring Social and Economic Impacts of the Basin Plan in Victoria
Frontier Economics were commissioned with Tim Cummins and Associates to assist the Victorian Government in undertaking a socio-economic analysis of the impacts in Victoria of water recovery through the Basin Plan. The findings of the project will inform discussions with the Commonwealth Government and help to make sure that all future water recovery from Victoria is based on robust evidence that it will result in neutral or positive social and economic impacts. The report sets out a systematic, methodical and repeatable way to analyse the impacts of the Basin Plan in Victoria. The report found that water use in the southern-connected Basin has changed significantly as a result of the Basin Plan. The consumptive pool has decreased significantly and the mix of industries has changed; horticulture, with its relatively fixed water demands now accounts for a larger proportion of the consumptive pool. Irrigators have been adapting, but the recent relative abundance of water since buyback was completed (with the notable exception of 2015/16), has enabled many irrigators to maintain water use though water allocation purchases. Consequently many of the socio-economic impacts of the Basin Plan may not be observed until the next drought (2016).
Western Parkland City (South Creek) Strategic Options Business Case
Developing a highly productive and liveable Western Parkland City (WPC) is central to realising the Government’s vision. However, urbanisation will place great pressure on the health of South Creek and presents significant challenges around meeting community demand for water and wastewater services. Infrastructure NSW engaged Frontier Economics to develop a strategic options business case (including an economic assessment and analysis of key risks, funding and governance arrangements) that considered the value of integrating land use and water cycle management. It considered and quantified key water-related infrastructure, open-space, urban-cooling, environmental and urban-form costs and benefits. Our analysis demonstrated that changing current practices and policies could generate significantly more value for the community than ‘business as usual’. As a result, INSW has recommended the NSW Government and IPART consider amending the legislative and regulatory framework for land use planning and the governance and funding of key water-related and other social infrastructure.
Sustainable water management: what is best practice?
The aim of this study was to articulate the characteristics of an effective and sustainable water management regime - to identify 'best practice' in water resource management. This report builds on and updates an earlier report prepared for Meridian Energy in 2007 to take account of recent developments in the literature and in practice. This provides a contemporary 'best practice' checklist against which the current reform program in New Zealand can be assessed. Based on the analysis in this report, we developed a 'scorecard' for assessing the extent to which water policy frameworks are likely to achieve their sustainability objectives The scorecard focuses on the underlying policy and legal framework for water allocation and management, although it is recognised that outcomes may depend heavily on how well policy is applied in practice.
This study for the National Water Commission documents the history of water markets in Australia. It covers from early developments in water management — which preceded the emergence of the first water markets in the early 1980s — to the maturing and broadening of water markets in the 1990s and 2000s. It also examines the interaction between water markets and the increased focus on environmental sustainable water management, which emerged in the late 2000s. The study draws on an extensive literature review and discussions with stakeholders involved in establishing water markets (2011).