The Facts of SEQ Water Reform: SEQ Mayors

21 / Feb / 2011 | News

SEQ Mayors have today joined together to condemn and correct the misinformation being spread by Gold Coast City Councillor Eddie Saroff regarding SEQ water prices, labelling his actions as political point scoring.

The Mayors said Cr Saroff’s media commentary on water prices was wrong and called on him to deal with the facts.

The facts are:
The rise in SEQ water prices is a direct result of a succession of State Government decisions that mean:
• much higher bulk water charges as a consequence of funding of a desalination plant and recycling plant that have since been effectively mothballed;
• the setting up of three new water retailers that Councils consistently said were unnecessary and would add to costs;
• the removal of a 40 per cent State capital subsidy on new works that will add hundreds of millions of dollars to the future costs of water provision; and
• a deal with the unions that ties the hands of the water utilities in achieving savings for three years.

SEQ water prices have been extensively reviewed with the following findings:
• Recent water increases for Allconnex have been due to increases in bulk water charges and additional retail/corporate costs relating to the establishment of the new entity. (Source: AEC Economics: Assessment of Driver of Recent Water Increases in SEQ, Nov 2010; Independent Review of SEQ Water Prices by former ACCC Commissioner Dr David Cousins Dec 2010)
• Allconnex’s prices are well below reasonable cost recovery, and ‘there is no evidence of an exercise of monopoly power’. (Source: Queensland Competition Authority Draft Report SEQ Interim Price Monitoring Feb 2011 p.9)
• SEQ councils have only a very limited power to direct the water utilities as shareholders while the entities have an independent power to set their own prices until 2013. (Source: Legal advice from King & Co, solicitors, September 2010)

These are the facts of SEQ water reform that all SEQ councils have to deal with. None of us like the current arrangements and Council of Mayors (SEQ) consistently lobbied the Government to leave Councils running their own water businesses directly as we did in the past.

SEQ Councils will continue to lobby the Government to reduce State bulk water charges, and we will continue to advocate to the water utilities the need to reduce costs and keep price rises to a minimum.

Public slanging matches are no substitute for hard work in getting costs down and delivering efficient and effective services to ratepayers and all SEQ Mayors call on Cr Saroff to deal with the facts and stop spreading misinformation in an attempt to further his political career.