Richard Mulcahy’s Bizarre Economic Theory On Water Consumption

johnboy 1 September 2005 5

A strange story in the Canberra Times on Committee concerns about Actew regulating water use while profiting from water sales.

It’s a bit of a worry but so far down the list as to barely warrant mention. What was bizarre, however, was Richard Mulcahy’s thoughts on water use and pricing.

“The Government should reduce its dividend demand on Actew if it wants, as it should, to encourage water conservation in the ACT. Otherwise you are simply punishing the consumer for saving water by pushing the price up and up.”

No Richard. You encourage the water conserver by putting a proper price on the resource and charging them less if they use less.

Vicki Dunne then put out a media release regurgitating this strange thinking.

On page three of the statement of intent it states that in regards to water demand ACTEW will ‘work with the ACT Government to achieve a reduction …

“This statement is in direct contrast with the one that follows on page nine where ACTEW’s water revenue is expected to recover from 2006-07 onwards where ACTEW has ‘assumed no water restrictions’ which has led to a significant increase in earnings,”

For Gods sake, do I have to round the Assembly and carve it into your thick skulls?

You’re Liberals, you modify behaviour by price not regulation.

Or are you just jumped up power freaks devoid of conviction?

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5 Responses to Richard Mulcahy’s Bizarre Economic Theory On Water Consumption
johnboy johnboy 10:11 pm 01 Sep 05

Water at the moment is priced, at the top rate, at $1.30 for ONE THOUSAND litres.

And you want to try and educate people to conserve it an punish them for wasting it?


Chris Chris 9:32 am 01 Sep 05

Interestingly, TWO meter readers from ACTEW-AGL have been around to my place (dual occupancy) in less than 3 months. As I’m exceedingly frugal (not to say pennypinching) with both electricity and water I’m wondering what this increased surveillance portends – one meter reader was nice, the other crabby. (The nice one pointed out that customers who switched from ACTEW to Countrywide got FF points – he should know.)

homebrewed homebrewed 9:26 am 01 Sep 05

che is right!
it a perpetual problem for water companies across australia… govt got them off their books in the name of economic efficiency but they effectively use them as ATMs… so with pressures to reduce consumption (and therefore less billable units)… up goes the unit cost!

And with the ACT government’s revenue base being eroded by the contraction of the property market (lower rates and lower stamp duty)… so the more dollars that can be squeezed from ratepayers via ACTEW the better!!!

you can modify behaviour in this circumstance with things other than price… in the form of incentives to install water smart devices, restrictions, and education!!!

che che 8:57 am 01 Sep 05

I keep telling everyone that ACTEW are not making their expected profit as people are using less water

therefore they want to up the price of water to ensure they do make their profit,

so in a sense the consumer is being punished for lower water usage

for the MLA’s it all depends on who they are backing that week, is it

A – their mates in ACTEW,
B – the environment,
C – the people (god forbid) or
D – just an opportunity to shiv the other bloke/party while their back is turned

I’ll take number 4 thanks Eddy

glimmertwin glimmertwin 10:46 pm 31 Aug 05

clearly the latter.

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