Cape Town households will shoulder a bigger share of the new water restrictions to make more water available for the region's economic drivers of agriculture, industry and tourism.
This reflects a major shift in the way the region's water is allocated, with agriculture getting a bigger share than the urban areas - the opposite of the last year - and with the 40% reduction for business and industry being scrapped.
As Cape Town and surrounds emerge from one of the worst droughts on record, the national Department of Water and Sanitation has told farmers who depend on the big six dams in the Western Cape water supply system that they need to cut their water consumption by only 10% for the coming year.
This is a marked change from the 60% cut that the national department imposed on agriculture over the past year, which led to a production loss of R5.9bn and the loss 30 000 jobs.
The national department proposed that the City of Cape Town and the scores of other towns that use water from the big six dams, cut their water consumption by between 10% and 20% for the coming year.
This is a reduction from the cut of 45% that the national department imposed on Cape Town last year, but not nearly as great as this year's reduction for agriculture from 60% to 10%.
However, the City of Cape Town announced on Thursday that it had opted to take a more cautious approach than the department suggested, and cut their consumption by 30% from December 1.
This translates into Cape Town moving from Level 5 water restrictions, to the less stringent Level 3 restrictions. The daily allocation of water per person will increase from 70 litres a day, to 105 litres.
The City went further. It said it recognised the negative impact the water restrictions have had on business, industry and tourism. As a result, it has decided that the 40% water restriction it had imposed on the business sector last year will be removed from December 1.
Deputy Mayor Ian Neilson said "essentially, agriculture and business are getting priority".
"Restrictions have had a significant economic impact on tourism, and the agricultural sector has suffered very significantly in the last year," Neilson said.
Neilson said all the municipalities, irrigation boards and other water users had sat around a table with the national department on November 19, and had come to an agreement on the different percentage cuts for different sectors.
All had agreed that agriculture should have much lower cuts than the urban areas.
"It was the other way round the last year. They had very severe restrictions last year. As a city and a region we are dependent on agriculture and agricultural processing, so the urban users agreed to go to Level 3," Neilson said.
Households were the biggest water users, Neilson said. Cape Town used two-thirds of all the water from the catchment dams.
"And of that, residents use 60%."
Carl Opperman, CEO of Agri-WesCape, said the crippling drought had brought the competing water users together to work out the best way to use the scarce resource in a way they had not done before.
"We sat around the table and said let's make it work to get the economy up and running. It made us look at whether we were using water in the best way for the economy. I think the drought was more than a learning curve. It was a change in mindset," Opperman said.
Xanthea Limberg, mayoral committee member for informal settlements, water and waste services, said the coming year was not only a period of recovery for the supply dams, but for the economy as a whole.
"Due to the extreme economic and rural hardship that has been suffered as a result of the drought, the agricultural sector will only reduce water usage by 10% as it too enters a period of recovery. The City fully supports this move," Limberg said.
The other reason for not taking as big a cut in water restrictions as the national department had proposed, was because the City realised it was moving into unknown territory with climate change.
Climate change forecasts are that the western part of the Western Cape will become increasingly hotter and drier.
Neilson said this three-year drought had been far more serious than anticipated, and they would need many more years of data to know if this was a change in climate.
"We have taken the approach that we anticipate it could be a change. We know we can no longer rely on surface water only. We have to diversify our water resources."
Russel Breuton from Wesgro, the province's tourism, trading and investment agency, said the easing of restrictions would send out the message that Cape Town was "open for business".
It would help small businesses in particular, as the lower tariffs that accompany the Level 3 restrictions would reduce input costs.
Breuton said the tourism industry had started to see a "pick-up" in bookings.
"It is difficult to provide a forecast for the season, and we do expect an impact from the drought, but the situation is starting to turn around."
President of the Cape Chamber of Commerce and Industry Janine Myburgh said the drought had changed many businesses' way of thinking. Many had invested in water-saving devices, grey water systems, rainwater tanks and boreholes.
"It has been painful, but I think we are better off for the experience. We are certainly in a better position to deal with future dry years."
Kevin Winter from UCT's Future Water Institute believed the time was right for lowering the restrictions.
"It makes sense. The world is watching to see what happens next. The big difference now from 2017 is that there is transparency about the water issue, and everyone will make sure the City keeps in line. The restrictions can be pulled back very quickly if necessary."