The Role of Forests in Water Production
The way in which water catchments are managed, together with the nature of the vegetation within those catchments is intrinsically linked to the health of rivers and streams, the aquatic life and the quantity and quality of water which flows from the catchments.
World's Big Trees Are Dying
Alarming Increase in Death Rates Among Trees 100-300 Years Old
Undisturbed native forests (particularly Ash or Wet Sclerophyll) produce the most stable stream flows with the greatest productivity and highest quality water.
Mixed forests in excess of 200 years old and where fire has been excluded, enable the greatest productivity of water.

Lower Weld Valley, aerial view. The whole viewfield, apart from a
riparian strip, is couped up and zoned for logging.

Old trees which are deep rooting help pull moisture deep into the ground and together with the deep litter on the forest floor, causes much greater ground absorbtion, enabling water to percolate out slowly thereby maintaining relatively stable stream flows.
The leaf litter together with up to 2500 species of mosses, fungi, lichens and bacteria living in that litter play a vital part in breaking down organic matter into nutrients and consuming the droppings of  warm blooded animals and in doing so ensure the water which filters out from these forests is of the highest quality.

Those catchments which are described as reforested, are in fact “green deserts” of vast mono-cultures deprived of any variety of life forms and lack the ability to provide a stable micro-climate and water production capacity.
Ref: Colin Tudge, The Secret Lives of Trees