State Government bulk water charges key to increased water bills: SEQ Mayors

21 / Dec / 2010 | News

An independent report commissioned by SEQ Mayors has confirmed that the State Government’s increased bulk water prices have been the key driver of higher water bills for South East Queensland residents.

The report, Review of Water Prices, was prepared by Dr David Cousins AM, the former Chair of the Prices Surveillance Authority and ACCC Commissioner, and now Professorial Fellow at the Centre for Regulatory Studies at Monash University.

Dr Cousins found that bulk water cost increases were the key cost driver for each of SEQ’s three distributor-retailers: Queensland Urban Utilities (83.8%); Allconnex (61.7%) and Unitywater (34.5%).

He also pointed to the high establishment costs associated with the State Government’s water reform process, the removal of State capital subsidies for water and sewage infrastructure, and the constraints placed on SEQ water entities pursuing cost efficiencies due to the State’s insistence on providing jobs guarantees to the unions for three years.

Dr Cousins was highly critical of the State’s posturing on water prices, arguing it is inconsistent with the State Government’s commitments under the National Water Initiative and COAG Competition Policy agreements, and contrary to the approach they have taken with their own power utilities.

Council of Mayors (SEQ) Deputy Chairman Councillor John Brent said the findings in Cousins’ report are no surprise to SEQ Councils.

“The Review of Water Prices report confirms what SEQ Councils have long known, that the State Government’s bulk water price increases are the main reason for increased water bills in SEQ,” said Cr Brent.

“It is the State Government that set the exorbitant bulk water prices, it is the State Government that forced the creation of the new water entities, and it is the State Government that placed the three-year moratorium on staff redundancies in the new water entities and removed capital subsidies for new infrastructure.

“Dr Cousins’ report puts out the challenge to the three distributor-retailers to take every opportunity to reduce their costs and provide value for money for ratepayers, a view endorsed by SEQ Councils.”

Cr Brent said Dr Cousins confirms that Councils cannot direct the entities on their day to day operations and that it is up to the boards of the entities to deliver on the stated policy objectives of providing cost efficient, reliable water services to the residents of SEQ.

“While SEQ Councils do not have power over the boards of the water entities, Councils will continue to lobby the water boards to find savings and efficiencies and reduce the burden on families,” he said.

“The State Government should stop lecturing the entities and encourage them to get on with their job.”

Cr Brent endorsed Dr Cousins’ call for the entities and all levels of government to engage more with their communities about the true causes and costs of water prices.

“By commissioning this report, Council of Mayors (SEQ) is seeking to provide the residents of SEQ with a genuinely independent and objective view of what has happened to water prices in SEQ.

“I would encourage every resident of the region worried about water prices to read this report,” he said.