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There are some places around that do recycle the water - maybe not directly back into the drinking water supply, but back to dams. From memory, Brisbane and Toowoomba do this (or have done it in the past - not sure now the water supply is back up again).
What I'd like to see is more interconnection between the various dams/rivers/desalination plants to be able to shift surplus water to places that need it. Imagine if we could pump extra water into the Murray-Darling system for example. (Mind you, the cynical side of me would then expect more of the corruption/greed that was recently exposed).
We fail as a country as we tend to react for our water - acquire through random events. Instead we need to take control and ensure we can generate any shortfall and get it where it's needed.
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