1) Sydney Water runs its own recycled water units and supplies that to some designated areas only. At Bardia, such connection is available to every lot. This does away with the need to install a separate Rain Water tank.
2) Many builders do provide a credit (money back) if rain water tank is not required. However the builder still has to do a good amount of plumbing connections, so do not expect entire cost back.
3) Recycled water conx ensures an assured supply of treated water, where as rain water tank does not. When there is no rain, normal water gets supplied instead of from the tank.
4) You have a point there, and to best of my knowledge - in absence of rain water tank the rain water would just end up with in storm water drain.
5) The rain water tank occupies prime space and is not really nice to look at. If you insist you could have recycled water feeding into rain water tank (which also takes input from normal water line) and that way minimal rain water is poured down storm drain. However you pay for tank and for usage of recycled water and for extra engineering/plumbing to have this setup. I don't know if this is done or feasible without manual intervention.
It's just a bit expensive for me for $150 a quarter plus the normal water line will be around $500 together:-?
Taking a clue from prices you put up, i did some research. It isn't that expensive and seems the price at which we will be charged for storm water going to be in favour. Just for flushes and stuff it would be about 100/lts in month plus for garden and at that rate with approx .1.83/kilolitre. it does make sense to use it. Look at this link here
http://www.sydneywater.com.au/SW/accoun ... /index.htm