❓ Mr. Kelly questions water charge increases, citing Water Corporation profits and accusing the government of using them to offset state debt. The Minister defends the increases, referencing cost recovery, infrastructure maintenance, and climate-independent water sources, while also criticising Mr. Kelly's public statements.
AnsweredQoN 413Legislative Assembly
QuestionView source ↗
WATER CHARGES — FORECAST
413. Mr D.J. KELLY to the Minister for Water:
I refer to the three seven per cent
increases in water charges over the coming three years that the minister has
approved in this year's budget, and the pain that this will place on
already struggling household budgets.
(1) With the
Water Corporation already making a net payment of $130 million last financial
year to the government from its growing revenue, how are these increases
justified on a cost-recovery basis?
(2) Is this not
purely a policy decision by the government to hit Western Australian households
to pay for its out-of-control state debt?
413. Mr D.J. KELLY to the Minister for Water:
I refer to the three seven per cent
increases in water charges over the coming three years that the minister has
approved in this year's budget, and the pain that this will place on
already struggling household budgets.
(1) With the
Water Corporation already making a net payment of $130 million last financial
year to the government from its growing revenue, how are these increases
justified on a cost-recovery basis?
(2) Is this not
purely a policy decision by the government to hit Western Australian households
to pay for its out-of-control state debt?
AnswerView source ↗
I thank the
member for Bassendean for the question.
(1)–(2) A
couple of points are worth noting about some of the public commentary of the
member about Water Corp and government charges, and I think they need to be
pointed out to the house. The first was when he was on radio this morning
saying that the state government is using Water Corp as a cash cow.
Mr F.M. Logan : It is.
Mr
D.T. REDMAN : That is fundamentally wrong, and I will tell members why. It
is interesting that that is what he said this morning, but his commentary now
is that the net accrual to government is $130 million. He uses public
commentary to say that the government is using Water Corporation as a cash cow,
then comes into this house, puts the record straight, and says that the net
accrual to government is $130 million. During the last term of the last Labor
government, I do not think there was one year in which the net accrual to
government—in other words, the net cash to government from the Water
Corporation—was less than $200 million. Not one year. But in the last
term —
Several members interjected.
The
SPEAKER : Members, Hansard cannot hear.
Mr
D.T. REDMAN : In the last term of the Liberal–National government
the net accrual was well below $200 million and it is around $120 million or
$130 million in this year's state budget. I make the point that the
public rhetoric of the member for Bassendean is totally off the mark, as
highlighted in the question given to me today; there is certainly a big
difference in that.
Coming back to the point about the
prices in the forward estimates, every year the state government through its
budgetary process makes decisions around the price of water for a whole range
of reasons, including as a result of recommendations from the Economic Regulation
Authority and the cost pressures on the Water Corporation to maintain
infrastructure, which the member for Bassendean has put to me as being a
challenge.
I make the point that the forward
estimates are simply an indication of the future. They are simply an indication
in the budget papers of the outward expenditure and the outward likely fee
changes. In the past two years this government has not increased charges in the
figures in the forward estimates. Every year the state government makes
decisions. Determining the fee increases is a cabinet decision. I make the
point that that is a decision that the state government makes every year.
On the basis of a six per cent
return on investment, across the charges for water, drainage and sewerage the
government is slightly under cost recovery. Over the longer term, we try to
pitch our price increases to be fair and reasonable. We are trying to run an
efficient corporation to ensure that we get a good return for the taxpayer. I believe there is a recognition in the community that if we are to move
towards climate-independent sources of water, as we are doing—we have
made decisions around desalination plants and groundwater replenishment as
climate-independent sources of water for Perth—we need to ensure that we have a cost structure to manage
that. I think the public accepts that position.
member for Bassendean for the question.
(1)–(2) A
couple of points are worth noting about some of the public commentary of the
member about Water Corp and government charges, and I think they need to be
pointed out to the house. The first was when he was on radio this morning
saying that the state government is using Water Corp as a cash cow.
Mr F.M. Logan : It is.
Mr
D.T. REDMAN : That is fundamentally wrong, and I will tell members why. It
is interesting that that is what he said this morning, but his commentary now
is that the net accrual to government is $130 million. He uses public
commentary to say that the government is using Water Corporation as a cash cow,
then comes into this house, puts the record straight, and says that the net
accrual to government is $130 million. During the last term of the last Labor
government, I do not think there was one year in which the net accrual to
government—in other words, the net cash to government from the Water
Corporation—was less than $200 million. Not one year. But in the last
term —
Several members interjected.
The
SPEAKER : Members, Hansard cannot hear.
Mr
D.T. REDMAN : In the last term of the Liberal–National government
the net accrual was well below $200 million and it is around $120 million or
$130 million in this year's state budget. I make the point that the
public rhetoric of the member for Bassendean is totally off the mark, as
highlighted in the question given to me today; there is certainly a big
difference in that.
Coming back to the point about the
prices in the forward estimates, every year the state government through its
budgetary process makes decisions around the price of water for a whole range
of reasons, including as a result of recommendations from the Economic Regulation
Authority and the cost pressures on the Water Corporation to maintain
infrastructure, which the member for Bassendean has put to me as being a
challenge.
I make the point that the forward
estimates are simply an indication of the future. They are simply an indication
in the budget papers of the outward expenditure and the outward likely fee
changes. In the past two years this government has not increased charges in the
figures in the forward estimates. Every year the state government makes
decisions. Determining the fee increases is a cabinet decision. I make the
point that that is a decision that the state government makes every year.
On the basis of a six per cent
return on investment, across the charges for water, drainage and sewerage the
government is slightly under cost recovery. Over the longer term, we try to
pitch our price increases to be fair and reasonable. We are trying to run an
efficient corporation to ensure that we get a good return for the taxpayer. I believe there is a recognition in the community that if we are to move
towards climate-independent sources of water, as we are doing—we have
made decisions around desalination plants and groundwater replenishment as
climate-independent sources of water for Perth—we need to ensure that we have a cost structure to manage
that. I think the public accepts that position.
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