The Productivity Commission estimates that recent water restrictions have cost consumers more than $1 billion per year.
The Commission says most urban water users have faced water restrictions during the past couple of years because of the recent drought.
The Local Government Association of Queensland says lifting water restrictions could be considered after months of heavy rain.
Queensland Water Minister Stephen Robertson says the Productivity Commission needs a reality check.
The Productivity Commission also says rebates and subsidies to encourage household water efficiency can be expensive for the amount of water saved.
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