Why Gympie will be paying more for water in 12 months

Description

Follow up on previous expert comment in Gympie Times October 201 in light of Queensland Audit Office Report.

Subject

LONG-TERM pain is on the horizon for Gympie household budgets with southeast Queensland water prices expected to soar over the next decade.

In their latest financial audit of the state's water services the Queensland Audit Office has reported that the current operations of Seqwater, the bulk water agency which sells untreated water to bodies including Gympie Regional Council, are unsustainable.

According to the report, the Queensland Competition Authority is investigating the prices Seqwater should charge from July 1 next year until June 30, 2021.

Bond University water law researcher Victoria Baumfield said the report paints a grim financial future for households serviced by Seqwater.

"It appears that prices will continue going up every year at least for the next 10 years, if not longer - and indeed, most likely longer," Assistant Professor Baumfield said.

While price rises were already on the cards to ensure all Queenslanders were paying the same for water by 2019-20, Prof Baumfield said the report suggests those buying from Seqwater could be slugged further as it tries to claw back the $9.4-billion debt it was saddled with after the Millenium Drought.

"Prices are going to continue to increase over the period through 2028 even after Seqwater is operating at a profit in order to make up for the previous undercharging," she said.

"The Audit Report states that Seqwater will charge a price high enough to cover the full cost of its debt repayments as well as other operating costs."

While a spokeswoman for Gympie Regional Council said in June that Gympie prices would remain stable until 2019 at the earliest, Prof Baumfield said they would have little choice but to pass costs on after that thanks to the full-cost pricing policy which Queensland had adopted over the past two decades.

"Seqwater will be required to pass those costs on in full to its wholesale customers, including Gympie Regional Council, and Gympie will presumably have to pass those costs on to its retail customers."

And there seemed to be little option of avoiding it, either.

"I am not aware of any other options other than buying water from Seqwater as Seqwater is the designated (monopolist) water wholesaler for the region."