Groundwater and surface water resources are often closely linked. This has particular implications for Australia and how we manage our water. As a result of this connectivity it is possible to allocate the same resource twice, to surface water users and to groundwater users. This double allocation of the same water has reduced the flow in our rivers and streams. There has never been a nationwide review of surface water and groundwater interaction in Australia and consequently the extent of double allocation is unknown. There is also no national approach to managing our groundwater, nor an agreed method for assessing its links to surface water. The lack of understanding of the links between groundwater and surface water has contributed to the nation's present water shortage. This has been exacerbated by dry conditions over the last decade and by rising demands for water. It is suggested that tackling the impacts of surface water and groundwater interaction requires a national approach on three fronts - technical, managerial and educational. Several approaches are proposed for assessing and managing our groundwater resources, and recommendations made for their adoption. It is also argued that remedying the over-allocation of surface water and groundwater should be borne equitably by all users, with cuts and restrictions applied generally rather than to groundwater users alone.