Andrew Barr is applauding the Independent Competition and Regulatory Commission’s revised thinking on water prices:
Today’s announcement by the Independent Competition and Regulatory Commission (ICRC) means that Canberra’s water prices will continue to compare favourably to other mainland capital cities, while not undermining the considerable efforts and gains that have been made to date in water conservation in the ACT.
The ICRC has significantly amended its methodology to that used in their draft price determination reports released over the past twelve months. Overall, the final decrease in water and sewage prices for 2013-14 results from the combination of sewerage service prices falling by 18 per cent and of water prices rising by 4.9 per cent. The ICRC also recommends these charges increase by CPI in the 2014-15 period.
Every cent of profit that ACTEW makes is returned to the community, and the Government believes the community should receive adequate compensation (in the form of returns on equity) for owning ACTEW. But we acknowledge that providing a return should not put undue risk on the financial viability of ACTEW.
Shadow Treasurer, Brendan Smyth, has today expressed his disappointment that ACT tax payers are being forced to pay more for water, purely to keep ACTEW from becoming insolvent.
“It is completely unacceptable that water prices in the ACT are increasing by 5 per cent for this reason,” Mr Smyth said today.
“ACTEW is running a monopoly on one of the most basic services in this Territory, and there is absolutely no reason that they should be overcharging Canberrans to keep afloat.
“Today’s report has confirmed that if the ICRC passed on its initial recommendation that water and sewerage prices should drop by an average of $230 a year, ACTEW would be unable to pay dividends to the Government in the foreseeable future.