Reticulated water supply is a natural monopoly. Level 2 water restrictions have just been declared in Sydney. Sydney Water is supposed to be autonomous but is it?
Sydney Water:
has no program to remedy 110 megalitres a day of leakage (about 7% annually) but turns on expensive and energy intensive desalination that supplies about 15% when in operation
has a very low level of water recycling (about 7%)
made $424m profit after tax
on top of its profit paid $546m dividend to the state government out of a gross income of $2.733b (20%) last year.
And yet they want a 2.5% price rise to cover the loss of revenue due to water restrictions.
How do you feel about Sydneysiders paying more for their water under these circumstances? Do you think instead of going into State coffers the surplus should be spent on a more sustainable, cheaper less wasteful water supply?
It is reminiscent of SEQ a decade or so ago when the water authority was demanding that they should receive the same revenue despite only providing a fraction of the normal water supply on the pretext that they still had expenses to pay.
Perhaps mining companies, manufacturers, airlines and all other businesses should try the same scam when production or sales are down, except that they would receive very short shrift.
There is a long history of how such situations came to be, and most are dependent on who was voted into government and the T&C when services were spun off to private enterprise or made into profit-making government businesses and similarly, if and how they are regulated and overseen.
On one hand it might be karma but I doubt enough people will take it to heart in any election since few people are single issue voters, and what appeals to them as a basket of policies and competencies whether real or imagined will probably continue to appeal to them in the same ways. Another increase for another reason when profits might not be ‘keeping up’ in future? ka-ching.
There is almost universal credit for Hawke-Keating for modernising the economy, but in reality they started the transition to what we have today. In a simple sense even if a government does something well and with good intentions, its opposition will one day have the ability to attack it whether for ideological or partisan reasons, or just to be mischievous and direct a few dollar somewhere.
Sydney Water looks like a prime example of how it can go.
