The NSW bulk rural water pricing model is fundamentally broken, with farmers paying the lion’s share of ballooning WaterNSW costs under IPART’s flawed impactor-pays model.
In a report released today, NSW Irrigators Council (NSWIC) is demanding action be taken to prevent farmers from being priced out of business in the upcoming IPART 2025-2030 pricing determination.
“WaterNSW’s revenue requirements are increasing far faster than farmers’ capacity to pay,” warned NSWIC CEO, Claire Miller.
“Although the WaterNSW pricing proposal has not yet been submitted to IPART, a proposed 15 per cent plus CPI year-on-year increase has been presented to Customer Advisory Groups.
“Agricultural water licence holders, particularly small family farms, are already struggling with rising input costs including interest rates, fuel, insurance, machinery, wages, and energy, alongside higher water allocation prices due to State and Commonwealth environmental water recovery.
“They just cannot afford to pay exorbitant increases in their water bills as well.”
IPART’s impactor-pays principle compounds the cost pressure by imposing a disproportionate share of costs onto rural water licence holders when it is abundantly clear that this water is benefitting a diverse range of stakeholders.
“WaterNSW customers are covering 80-100 per cent of operating and capital costs, and 80-100 per cent of 20 out of 35 Water Administration Ministerial Corporation (WAMC) activities,” Ms Miller said.
“But NSW’s water is managed for multiple purposes, including environmental health, community wellbeing, and increasingly for the social, economic, cultural, and spiritual wellbeing of First Nations.
“The pricing model should be updated to one which more fairly allocates costs among all users, including the wider NSW population and government contributions.”
“We understand WaterNSW is making every effort to rein in costs to cap price rises at 15 per cent plus CPI year-on-year – but that is still well beyond the ability of farmers to pay.
“The fact is, the NSW bulk rural water pricing model is broken. An urgent, transparent root-and-branch review of the current pricing framework is essential if farmers are not to be priced out of business.”
NSWIC also raised concerns the new customer engagement models have diminished the voice of paying customers by placing an overemphasis on consulting indirect stakeholders with poor literacy on technical subjects such as river operations and water pricing.
WaterNSW customer service levels are also perceived to be declining while costs are increasing, with centralised services, reduced customer contact hours in regional branches, and inadequate communication.
“The rural bulk water pricing model needs restructuring so rural water customers only pay for costs directed related to water delivery,” Ms Miller said.
“Infrastructure, river operations, services, planning, and management required for public interest purposes should be funded from consolidated revenue or another mechanism spreading costs across the NSW community.
“IPART must revise its definition of an ‘impactor’ and review cost-sharing between rural water customers and the NSW Government for public good activities.
“WaterNSW’s government dividends should be waived over the 2025-2030 period, recognising the inability to generate a surplus amid rising costs. The Government should also release WaterNSW from land tax and cover interest on decades-old legacy debts from building dams and other infrastructure.”
You can view NSWIC’s full report HERE
