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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

water reform « Previous | |Next »
June 15, 2005

The rains have come but:


Asa Wahlquist, writing in The Australian, highlights a point that I've often made about the governance of water: that the state water utilites are a major problem. She says:

Spending on water infrastructure has plummeted in the past two decades as state governments have plundered the profits of water utilities and failed to reinvest in the sector.

She says that twenty years ago, Australia's infrastructure spending was about 4per cent of gross domestic product, against an OECD average closer to 3per cent. But the latest figures, from 2002, show Australia spent only about 0.5per cent of GDP on infrastructure, or one-seventh of the OECD average of 3.5 per cent.

She quotes Paul Perkins, the head of the Barton Group, who says that the finger can be pointed at the state Treasury's:

We so-called reformed our utilities, but the money went straight into Treasury and decisions on investment started to be made by Treasuries.

The state water utilites have become water corporations who are now more interested in making a profit, than ensuring a more sustainable use of water in the cities.

This represents a failure to apply the national competition policy to water in our urban areas.

Update: 20 June 2005
The winter rains have come in Adelaide and Canberra this last week, but not so Sydney. I was in Sydney from Thursday 16th to Sunday 19th and only a few drops of rain fell early on Sunday morning. The rest of the time was clear blue skies and losts of sparkling sunshine.

I caught a program on the NSW Statewide on Friday night before I went out to dinner
about water levels at Warragamba Dam and the low levels. The Sydney Water offical did not mention climate change once and exuded heaps of optimism about the future.

Crisis? What crisis? It was just a matter of waiting for the rains to come we were informed. The graphs of history showed they would come he said.

Update: 22 June 2005
They are a little more sensible in Melbourne. There they recognize the significance of climate change:

Global warming will stretch Melbourne's water resources to their limit, forcing the city to find new sources of supply, a report by the nation's top science agency has revealed... the CSIRO report, outlines a worst-case scenario for Melbourne, in which the city would lose 35 per cent of water flowing to dams by 2050. Under expected climate change, Melbourne will lose water due to less rainfall and higher temperatures says the report, commissioned by Melbourne Water. The scientists' "mid-range" scenarios project an 8 per cent loss of average flows by 2020, rising to a loss of 20 per cent by 2050.

That does even factor in the increased demand for water due to the increase of population. They are talking in terms of permanent water-saving rules to conserve water and recycling water as well as seeking new supplies.

Sydney by contrast is continuing to say that as recycling's not a key to Sydney's water shortage, ans desalinisation is the key, so all the storm water and treated sewerage can continue to flow into the sea.

| Posted by Gary Sauer-Thompson at 2:17 PM | | Comments (6)


I accidently deleted your post. sorry.

From memory it said that the rains did not come where you lived you only got a minimal amount.
But given the cartoon, maybe that was the point I was making.

It was a quick post as I had to catch a plane back to Adelaide.

I meant that the rains had come in the sense that there were no rains during autumn.

No the winter rains are not enough. Poor ole Goulbourn got very little.

The rains are not going to solve the problem of the lack of water in Sydney. That global city has to shift to recycling.

Not a problem.

Well it's like this Gary. If you privatise your utilities and put in place certain non-performannce clauses you can have your cake and eat it in Govt. Firstly you only approve annual price increases that are politically acceptable and don't allow the private companies enough for long term infrastructure needs. This allows you to spend that infrastructure money saved on recurrent expenditure and jobs for the boys in the PS. When the manure inevitably hits the fan with the utilities, you can enforce the penalty clause as a once off and blame private enterprise for the stink. Then you have to allow them to raise their prices dramatically, tutt tutting sanctimoniously about how consumers will have to live with the effects of all this private enterprise incompetence and lack of planning from the past. The price rise has to cover the penalty too of course. The private company gets a guaranteed return for which it has to have broad political shoulders and be suitably contrite every 5-10 years or so, while the govt of the day can recurrently spend the difference in GDP you noted. That's the great benefit of public/private partnerships. Win win!

The other way is you have to run things responsibly yourself. Just ask the Beattie Govt what that means when the manure hit the fan at Bundaberg Hospital recently. Ministerial responsibility for underspending on Health is a real bummer.

As if to emphasise my point about the politics of being the meat in the cosy public/private sandwich here Gary, there's only one logical thing for the pressed meat to do-see here.

I've always seen Owens as a captured regulator. So I'm not suprised by the appointment.