Water resource management is a complex process, which requires suitable policy tools that are able to meet objectives of economic efficiency, social equity and environmental sustainability. Meanwhile, irrigation industry has to change its habitual behaviour in managing water when faced with increasing environmental and community concerns and new government policies. As a result, policy makers and irrigation practitioners are increasingly challenged to strike a balance or make trade-offs between the diverse economic, social and environmental effects of water usage. With this in mind, this paper attempts to analyse the interactions between water policy and irrigation practice in Australia and outline the synthesis of some findings from the reform experiences of selected countries. The insights drawn from this study are aimed to facilitate the irrigation industry make proactive response to policy changes in the future to realise the sustainable development of industry, community and the environment.