ORANGE, AAP – At the peak of the drought, flashing signs were a daily reminder to residents in Orange that their water supply was dwindling.

The signs, on main streets and in supermarket car parks around the city in central west NSW, lit up with ever-declining water storage levels.

At its lowest point in March 2020, Orange’s water storage dipped to around 20 per cent.

Months of drenching rain mean the city’s main water source, Suma Park Dam, is now full and the creeks are flowing. The neon signs have disappeared.

But the dry times remain front of mind for many residents as the city expands, raising questions over whether its infrastructure can cope with a growing population, caused in part by people leaving the city for a life in the country.

It’s not just a local issue. In the first year of the pandemic, regional areas experienced a net gain of 43,000 people, more than double the 2019 figure, according to data from the Australian Bureau of Statistics.

Orange City Council last week held community forums on its draft housing plan, which aims to accommodate a forecast 10,800 extra people by 2041, a population increase of 26 per cent.

Life-long resident Phil Stevenson has lived through several droughts, and is alarmed at how dramatically the water supply dropped between 2017 and 2020.

“If it stayed dry, then that would have been it,” Mr Stevenson said after one of the forums.

Orange mayor Jason Hamling says the council has spent more than $100 million on water infrastructure in recent years, by raising the dam wall, investing in stormwater harvesting and building a pipeline from the Macquarie River.

“I’m confident with the infrastructure we have. We will keep expanding it, we will keep improving it,” Mr Hamling says.

“Orange is an attractive place to live. That’s why I live here. I love the place, I was born and bred here and I always rave about Orange.”

The council says its modelling on water shows Orange will be able to service a population of 58,000 by 2060.

Many regional towns in Australia are navigating the balance between sudden growth and sustainable infrastructure.

Regional Australia Institute’s chief economist, Kim Houghton, says there are two drivers behind population changes in country areas: city-dwellers moving to the regions amid COVID-19; and regional residents staying put.

“This slight increase in people moving to regions has really made it a lot worse because there’s always been a two-way flow,” Dr Houghton says.

He says regional areas, however, shouldn’t turn their back on growth.

“The way our communities are evolving, as people age, and as kids grow, they will be looking for more services delivered in our communities by people from our communities,” Houghton says.

“The general evolution of our towns is a growing need for workers and a growing need for employment.”

Debate over a new private hospital development near Kingscliff, on the NSW-Queensland border, is an emerging example of the duelling demands of liveability and expansion.

A consortium plans to build a $250m healthcare hub next to the Tweed Valley public hospital in Cudgen, featuring aged care facilities, a hotel and housing for essential workers.

The developers say the project will create 1000 new local jobs, boosting the economy after years of hampered economic activity caused by the COVID-19 pandemic.

Tweed Nationals MP Geoff Provest says the government’s ongoing hospital development shouldn’t be seen as a “green light to concrete additional Cudgen farmland”.

“This is not welcome. We committed to protect the remaining Cudgen farmland, and that is what we are doing,” Mr Provest says in a statement.

Peter Newton, president of the Kingscliff Ratepayers and Progress Association, says many residents oppose the project, and they want new developments to preserve the region’s rural and coastal land.

“There’s always tension between maintaining the beauty of the place, and moving forward,” Mr Newton says.

“We’re not anti-development, we’re all about balance. We know this community, we know what makes this place.”

Mr Newton says the region’s assets are already being tested by an influx of visitors and new residents.

“We’re being loved to death, as most regional communities are,” he says.

“The infrastructure is not built for that.”

Wangaratta, in northeast Victoria, is also experiencing infrastructure stress, with new housing developments prompting an increase in approvals for sewerage and water connections by 45 per cent over three years.

Utility company North East Water slowed their development approvals in October, noting the demand had surpassed their highest planned growth forecasts.

“If we didn’t take this action, it could lead to water pressure issues and sewer spills in some areas of the city,” the company says in a statement.

Population changes don’t just affect roads, water and housing, but social infrastructure too.

Dr Houghton, from the Regional Australia Institute, says attracting enough health and social service workers to support growing communities is a major challenge.

“It’s great that people are bringing their jobs from the city with them, but what those towns need is feet on the ground to deliver services,” he says.

“Whether it’s baristas, or aged care assistants, or allied health assistants, those are the jobs that people are finding hard to fill in regions.”

He says the solution lies in creative planning, with fewer decisions made by city-based public servants.

“We don’t want planning to be done to regions, we want planning to be done with regions.”