Water sustains life Access to adequate, good-quality water is vital for our environment, communities, economy, and culture. The outlook under a changing climate, in which severe droughts are projected to occur more frequently and last longer, extreme events to become more intense and cool-season rainfall to continue to decrease, will impact both the environment and the economy. Climate change threatens our water resources The outlook for inland water in the 2016 state of the environment report was positive: the millennium drought had ended, and Australia had returned to above-average rainfall. However, since then, Australia has experienced its lowest 24-month rainfall period on record, which has significantly affected inland water environments, which had not recovered from the millennium drought. Both surface-water and groundwater ecosystems were affected, and several major fish deaths occurred. Water use, especially irrigation, is a major pressure on Australia’s water Although water use has decreased since 2016, this is mainly as a result of the dry conditions (and, in turn, decreased water available for allocation) rather than changes in use. The dry conditions also meant that less water came from surface-water sources, and more came from groundwater and desalinated water. Pressure on groundwater sources is expected to increase with climate change and will require specific management approaches. Better water management – which balances competing interests, involves Traditional Custodians and considers climate change – is needed for this vital resource The past 5 years have demonstrated that Australia’s inland water is being impacted by climate change and emphasised the need to include climate change in water resources management. In light of the increased variability of Australia’s water resources, it is essential that water resource managers adopt an agile, risk-based approach, by considering cultural and environmental impacts that respond to the prevailing and predicted future hydroclimatic conditions. Some progress has been made on the implementation of water resources management plans, including the Murray–Darling Basin Plan, despite the complications of implementing the Plan during a period of severe rainfall deficiency. However, areas of the plan remain outstanding or poorly done, including having regard to Indigenous people’s values and uses in the management of water resources. Indigenous people remain distant from the benefits of water ownership and participation in the water market. Their engagement and role in water remain limited; some states and territories have progressed, but most lag. Data capture by states and territories remains a gap in knowledge, and prevents reporting on and assessment of Indigenous inland water. Water quality is generally good in Australia, but per- and poly-fluoroalkyl substances (PFAS) have contaminated water sources near some defence bases, and salinity also affects some areas. The 2019–20 bushfires significantly affected water quality; the combined effects of the drought and fires caused high levels of sediment and ash, which contaminated rivers and water sources. Low flows and high nutrient levels in the lower Darling/Barka River in 2018–19 contributed to major fish deaths. Access to clean water is a basic human right, but access to clean, healthy drinking water for Indigenous communities remains below standard. Since the 2016 state of the environment report, Australian federal and state and territory government agencies have continued to make data and information publicly available. However, the lack of coordination means that there is now a plethora of websites containing data and information, which are often not displayed using a standardised regime. This is causing confusion for stakeholders and impacts on water users’ ability to make well-informed decisions.