Australia is the driest inhabited continent on earth. Like a miracle, when it rains, droplets of pure water fall for free on the roofs of the houses we build. It only makes sense to capture this precious free resource and use it. Indeed, it is such a waste not to.
The average Melbourne home uses 200,000 litres of water a year. Depending on the suburb, a 200m2 roof area could expect to gather 80-120,000 litres of water a year. This would typically be used for flushing toilets, running the cold in the laundry, and watering the garden. Though can also be used for the shower if you have a large enough roof to make it worthwhile. Drinking rain water (with appropriate filters) is also possible, but as this is a very small component of water use in the house is usually left off.
In conjunction with water efficient appliances, and appropriate garden mulching, plant selection and distribution, a 50% reduction in towns water bill could be expected. This can go even higher when there is only a small garden, or greywater is harvested for this purpose. Not only does this save you money on water and sewer bills, but it also takes pressure off the melbourne water storage, which during the last drought got down to dangerous 30% capacity levels.
As a rule of thumb, minimum tank size should be 2,000 litres / 50m2 of roof. For a more accurate sizing, the Alternative Technology Association has created a great free sizing tool at www.tankulator.ata.org.au