The state government is secretly holding back a Sydney Water application to gouge hundreds of millions
- From:The Sunday Telegraph
- May 20, 2012
THE state government is secretly backing a Sydney Water application to gouge an extra $335 from households over the next four years.
Despite the O’Farrell government promising to limit bill increases from state-owned water and electricity suppliers, Sydney Water wants to boost revenue by $570 million – an application backed by the NSW Treasury Corporation.
Sydney Water’s submission to the Independent Pricing and Regulatory Tribunal would result in 1.7 million households facing a 30 per cent rise in bills over the next four years, or $84 each year.
The submission to the pricing watchdog to set prices over the next four years claims IPART’s proposal to restrict bill rises would see Sydney Water lose $140 million each year, which represents “a very large change with significant business impact”.
Sydney Water claims it needs the money to pay for infrastructure upgrades.
Its price claims are backed by two letters from NSW Treasury Corporation. One letter submitted last week claims allowing Sydney Water to maintain higher finance costs were essential to maintaining the state’s triple-A credit rating.
Treasurer Mike Baird has washed his hands of the application, declaring the final decision on prices rests with the independent regulator, not the government.
“The government’s debt adviser has independently raised concerns that IPART has not appropriately reflected current market conditions for the cost of debt in its calculations, which could subject customers to unnecessary price volatility and leave the state vulnerable to financial shocks,” he said.
But Opposition water spokesman Luke Foley said Premier Barry O’Farrell had promised to keep prices as low as possible for families.
“Yet they’ve now had Treasury and Sydney Water make secret submissions to the pricing regulator that, if adopted, will add $335 to every household water bill,” he said. “In opposition, Mr O’Farrell was on the side of hard-working families struggling under cost of living pressures. In government, he’s become out of touch very early on.”
Finance Minister Greg Pearce, who is responsible for Sydney Water, said it was important prices remained low and the quality of Sydney’s water was maintained.
“IPART sought submissions from all stakeholders… the government will respect IPART’s final determination in June,” he said.
The submission comes amid threats of stop work action by Sydney Water workers after the organisation refused an Australian Services Union request to end a cost-cutting roster trial that made cuts to overnight supervisor staff.