Are recycled water, underground water banks better options than dams

But MDA national president David Thurley insisted the country should turn its attention to ideas such as water recycling and banking water in underground aquifers.

"We have just relied on dams to solve our problems," Mr Thurley said at the MDA national conference in Albury.

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Despite the constant calls to build more dams, particularly during drought periods, Mr Thurley said analyses showed "such calls are not the simple answers they seem to be", with dams often tied up with green tape or struggling to get the positive return on investment ratio demanded by governments to justify the massive construction costs.

Mr Thurley said rural communities had to "turn away and toss aside" their preconceived ideas about water infrastructure and become more innovative. He pointed to London, Singapore and Los Angeles, where recycled water is regularly used to supplement potable water, with "ample evidence this is perfectly safe".

The CSIRO has promising research into the using aquifers as "water banks" and is calling for local government areas to take part in a trail where water is pumped underground in times of excess, avoiding evaporation loss and the massive construction costs associated with traditional dams.

Perth has even combined the recycled water and aquifer recharge. Every year, 28 billion litres - or about 10 per cent of the city's urban needs - is recycled and pumped back into the aquifers that support Perth.

But plenty of regional leaders, including many of the representatives at the MDA conference, believe governments had to continue pursuing dams, arguing the tried-and-tested method was the only large-scale solution to the constant threat of water shortages for both towns and the agriculture sector.

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Gunnedah Shire mayor Jamie Chaffey urged the federal government to back the Dungowan dam project - which many believe will have its $433-million commitment reneged in the October budget - in the neighbouring region of Tamworth.

Although Cr Chaffey's LGA won't benefit directly from the dam's increase in portable water, he said the flow on benefits of the added water security were enormous.

"Projects like Dungowan Dam are critical for the future growth of the North West region, but also more specifically the northern [Murray-Darling] Basin," Cr Chaffey said.

"We need projects like that to put more security into the basin. Without that security our agriculture is under threat, our communities will lose their population, and Australia will lose its status as a global provider of high-quality and quantity food and fibre."

Water Minister Tanya Plibersek wants to change the way large water infrastructure projects were assessed, giving consideration to the wider economic benefits brought about by improved town water security.

"A lot of them have really only been assessed against the agricultural benefit that they might bring - in many cases we don't take into account the economic benefit of providing more secure town water supplies," she said.

"Commonwealth funding has not really been assessed against what it does for water security for towns. One of the changes we'll make is to make sure we're contemplating both."

Nationals deputy leader and Coalition water spokesperson Perin Davey said "all options should be on the table", and highlighted the federal government's $3.5-billion water infrastructure fund - the National Water Grid - was designed to support a holistic approach to water security.

"When you look at dams, the low-hanging fruit - the really obvious places and the high rainfall areas - all taken, and any new dam still has to operate under the Murray-Darling Basin Plan, so there is no new water to be gained from dams," Senator Davey said.

"For urban water, I think we've got to be thinking more outside the box - recycled water, stormwater harvesting and desalination of shallow groundwater are all things we should be looking at."