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Residents of Bundanoon, New South Wales, cheered after their near-unanimous approval of the measure at a town meeting yesterday.
In recent years at least 60 cities in the US, Canada and the UK have agreed to stop spending taxpayers’ cash on bottled water.
But, according to green campaign group Corporate Accountability International, no other community has ever voted to totally ban the sale of bottled water.
Bundanoon’s decision came hours after the New South Wales state premier banned all state departments from buying the beverage.
Jon Dee, who helped spearhead the Bundy on Tap campaign, said: “I have never seen 350 Australians in the same room all agreeing to something.
“It’s time for people to realise they’re being conned by the bottled water industry.”
Tiny Bundanoon is about 100 miles south of Sydney and has just 2,500 residents.
The town claims the water is an environmental menace, with bottles cluttering landfills and requiring large amounts of energy to produce and transport.
CAI head Deborah Lapidus said: “I think what this town is doing is taking it one step further and recognising that there’s safe drinking water coming out of our taps.”