The Redland Water 'Rip Off'

The Great SEQ Water Debate has been reignited and, in my opinion, will continue to be a topic of public debate for years to come as the hikes in water rates take an upward spiral.

Unfortunately for Redland City, we were needlessly thrown into this bureaucratic bungle called 'Water Reform'. It was completely unnecessary as the Redlands had positioned itself over the last couple of decades to be self sustaining in supplying water to our community.

LET’S SHARE?

At the time of the reform, I was informed by a State Government Member of Parliament, trying to justify the SEQ Water Grid, that water should be shared and not limited to one municipality. Unfortunately, that MP had not been around in Redlands as long as myself and others to realise that Redlands was actually forced to become self sufficient when it suffered a water shortage and Brisbane City refused to “share” with Redland Shire by extending its water network. Incredible irony really!.

REPORT - 'ASSESSMENT OF DRIVERS OF RECENT WATER PRICE INCREASES IN SEQ'

This recent report commissioned by the Local Government Association of Qld (LGAQ) highlights the damage yet to be caused by the Water Reform decisions forced upon Redland City residents.

See the full report here

THE ARGUMENTS

1. WHO ASKED FOR WATER REFORM?

The arguments being fuelled never truly expose the fact that the South East Queensland Water (Restructuring) Act 2007 was the brain wave of the State Government; Redland Shire Council certainly never asked for it. I opposed the reform from its inception and argued strenuously on numerous occasions both in this and the past term of Council, that we (Council) were not fighting the issue hard enough on behalf of our community.

This is what the purpose of water reform is supposed to deliver: Another irony!

South East Queensland Water (Restructuring) Act 2007

s.3 - Purpose

The purpose of this Act is to facilitate a restructure of the water industry in south east Queensland to deliver significant benefits to the community, including—

(a) improved regional coordination and management of water supply; and

(b) more efficient delivery of water services; and

(c) enhanced customer service for water consumers; and

(d) a clearer accountability framework for water supply security.

Click on the link to the Act here

My frustrations drove me to collecting community sentiment through my own petition both electronically and in hard copy. Interestingly, a response to this petition was NEVER received by me or tabled in Parliament by the State Government.

The petition stated;

“The petition of electors of the Divisions of Capalaba, Redlands, Cleveland draws to the attention of the House - Redland Shire residents and ratepayers believe we are uniquely different to other local authorities and in current proposals by the Qld Water Commission and the Qld State Government this has not been adequately recognised. We should not be required to pay for water security we have already paid for. 

Your petitioners therefore request the House to consider that the proposed concessions of delayed connection to Redlands water supply does not fairly compensate Redlands community for their initial $27 million (in historic value terms) of water security already paid for at the expense of other services and infrastructure.”

See the electronic petition in full here

2. COUNCIL’S GOT WHAT THEY ASKED FOR!

The State Government stated that Councils have got what they asked for. The only factor the Council of Mayors asked for was three distribution/retail entities rather that the State's proposal of one distribution entity. This does not mean they asked for the water reform.

I never felt comfortable with this move and questioned the fact that this represented tripling the cost of administrative systems and bureaucracy.

Not surprisingly, the State Government did a back flip, gave the Council’s what they negotiated and an opportunity forever more to say “ They got what they wanted.”

3. REDLAND CITY HAS BEEN COMPENSATED?

There is an argument that Redland City Council was adequately compensated with $83million for its water assets. Considering that State Government clearly understood the cost of building brand new infrastructure such as desalination plants and pipe networks – it seems obvious that water infrastructure owned by Redland City in 2007, and costing $27million 40 years ago, would be worth considerably more than this in today's dollars. My estimate is that brand new infrastructure and land to duplicate these water assets (if built in 2007) would have cost in excess of $600million.

4. SHOW US YOUR PRICE PATH AND WE WILL SHOW YOU OURS

The latest rhetoric from the State Treasurer Andrew Fraser is that the Council owned retail entities should be transparent and show their price path for water through to 2017. The problem is that for any commercial entity to forecast their prices they need to have guaranteed cost of their product. So when the State “guarantees” their price path for water through to 2017, perhaps the Council owned retail entities can do the same.

Unfortunately, the State has legislated these entities to have Boards of Directors who ultimately make these decisions not Council. As the smallest stakeholder, Redlands participation agreement and equity in the retail entity Allconnex will deliver little weight to these decisions.

Another point NEVER mentioned is that legislation allows for the Qld Competition Authority to determine water prices after 2013, which seems to undermine Andrew Fraser's insistence that Council declare their water pricing to 2017.

5. COUNCILS ARE THE ONLY LEVEL OF GOVERNMENT PROFITING FROM WATER

It is true that Council's profit from water. No surprise really – they always have to offset the rates. The fact remains that Redland City Council would have offset rates by an extra $10million this year if they still controlled water. So “profits” are down, council rates are up and water bills have increased even more.

IN SUMMARY

It is not rocket science, extra levels of bureaucracy are going to inflate the cost of water to our community. Previously, Council collected, treated and distributed water to our community through one entity - Redlands Water.

Due to the State Government's legislation on water reform, the community is now forced to fund five extra entities of bureaucracy - Qld Water Commission, WaterSecure, Linkwater, the Water Grid Manager and Allconnex.

Against the communities wishes demonstrated in the aforementioned petition, community equity has been diminished, water revenue has decreased (increasing the pressure on Council's General Rate) and decision making on the future of Redland's water has been unscrupulously stolen from the our community.

Redland City Council should not be sitting back and accepting this incredulous spin promulgated by the State Government and start to defend our community in relation to this additional increase on our cost of living.