Government rules out extra fixed charges for SEQ bulk water
Treasurer Curtis Pitt says the state government will not be approving any recommendation to impose extra bulk water fixed charges on water consumers in South East Queensland.
Mr Pitt said fixed charges was not included in the scope of the Queensland Competition Authority’s review of pricing by Seqwater — the supplier of bulk water to SEQ councils and water retailers.
“As with any such review, the QCA’s role is to make recommendations and the government’s role is to make final decisions on those recommendations,” he said.
“The government will be making decisions that ensure no avoidable or unnecessary costs are passed on to SEQ water bills.
“In addition, my direction to the QCA specifically ruled out consideration of fixed charges in the review and I directed that the QCA was to focus only on volumetric pricing.
“The government will not be approving increased fixed charges on bulk water bills as a result of the QCA review.”
The QCA is expected to deliver a draft report in November with a final report expected by March next year.
Mr Pitt said there were options open to the government to ensure water bills did not rise, including extending the 20-year price path for repaying the cost of the water grid.
“We will need to assess those issues when we receive the QCA recommendations,” he said.
Mr Pitt said while there was no expectation that lower water consumption by SEQ consumers inevitably meant higher water bills.
“The price impact from lower demand will largely be offset by continued cost savings,” he said.
“As its owners, the government has consistently driven Seqwater to find operating and capital cost efficiencies.
“Consumption is down on average, but Seqwater has already made significant savings to offset the reduced revenue.
“As the QCA has stated, it set an operating cost saving target of $50 million over three years in its 2015 pricing review and Seqwater exceeded the target by around $67 million over three years.
“Seqwater is expecting that the price impact from lower demand will largely be offset by these continued cost savings.
“In the 2015 pricing review, water prices actually dropped across five local government areas, including Logan (6.7%) and Somerset (10.3%).
“In addition, bulk water charge make up less than half, and in some cases only one-third of a customer’s final water and sewage bill.”
Mr Pitt said Seqwater’s actual and forecast capital expenditure was also lower, which meant further long-term savings for end consumers.
“Lower consumption levels allow for the deferral of the next significant augmentation of the south-east corner’s water infrastructure until around 2040, which again reduces costs borne by end consumers,” he said.
“New water supply infrastructure would otherwise have been required as early as 2020-21.
“It is important to note that the earlier review of water prices under this government locked in lower prices for bulk water than under the previous LNP government.
“Our record concessions package of more than $5 billion for 5 million Queenslanders already provides a subsidy of up to $120 per annum to eligible pensioner property owners in SEQ.”
Mr Pitt said it was Labor that drought-proofed South East Queensland.
“The water grid’s interconnected pipe network means we now have an extra 85,000 million litres of water available for households, businesses and industry,” he said.
“Despite the criticisms from the LNP, the grid has proved its worth in times of potential water shortages as a result of natural disasters and will continue to do so,” he said.