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Steep Rise In Water Costs Forecast

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Shadow Natural Resources Minister Dale Last

April 4, 2019

The LNP has warned that Queensland farmers face substantial price rises for water if a move towards “cost-reflective” pricing is adopted.

Opposition Leader and Member for Nanango Deb Frecklington said a projected increase in the Barker-Barambah scheme was “completely unacceptable and out of touch with the real world”.

“There is a proposed increase in water prices from $30/ML to $74/ML and this is simply unaffordable for our Barker-Barambah irrigators,” she said.

“If these increases go ahead, many irrigators will have to cease production.”

Shadow Minister for Natural Resources Dale Last highlighted a submission from the Queensland Farmers’ Federation (QFF) to the Queensland Competition Authority review in water pricing.

“The QFF used State-owned Sunwater’s own ‘cost-reflective’ numbers to identify significant price increases for farmers already struggling under the burden of high water and electricity prices,” Mr Last said.

“The projected price increases we are seeing for some irrigation schemes are unacceptable and should be of major concern to farmers and the communities that rely on them.

“If the Labor Government wants to move to ‘cost-reflective’ pricing for water then it has a lot more work to do to ensure SunWater is providing value for money to its rural customers.”

Mr Last said ‘cost-reflective’ pricing would effectively kill numerous irrigation schemes in regional Queensland.

“These price increases have real world impacts on our rural and regional communities,” he said.

QFF identified the following SunWater cost blowouts:

  • 112 per cent increase in non-routine expenditure across all schemes from the QCA target for 2013-2018 totalling $69,160,000, compared with the actual $146,566,000
  • 59 per cent increase in non-direct costs for irrigation customers from an actual $11.1 million in 2017 to a forecast $17.6 million in 2019, a $6.5 million increase in two years
  • $7.6 million increase over two years from 2017 in irrigation operational expenditure

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2 Responses to Steep Rise In Water Costs Forecast

  1. Ross Trevor

    The Queensland Government sets the price of irrigation water supplied by Seqwater in South-East Queensland and SunWater elsewhere in Queensland to recover the associated costs of the infrastructure (e.g. dams, weirs and channels).

    The prices are regulated to strike a balance regarding cost recovery for the services provided versus impacts on customers, keeping prices as simple and transparent as possible. See: https://www.business.qld.gov.au/industries/mining-energy-water/water/industry-infrastructure/pricing/irrigation

  2. Disgruntled

    Ross Trevor, mate, what are you trying to convey with this seriously ambiguous comment? Do you think farmers should pay $30 or $70 per meg?

    It is not easy to make ends meet. The $70 may not be that bad if the water left the dam and arrived over the crop, applied itself just as it is needed all by itself. Mate, that does not happen! Costs and risks are very high and if Billy boy gets his way there will not be any spare electricity to get to irrigate at night time while everyone is busy charging their silly cars, so what’s the point of busting your belly farming?

    Every farmer in a regulated scheme area needs an allocation [that’s a number of megs]. These megs are paid for annually whether the dam has water or not, even when empty! This is called the “nominal allocation”.

    The dam water has various reliabilities, ie high or low. Farmers have low or very low and towns and industries have high or very high. Now at the start of the water year, water for town and industry and even environmental water is set aside, and if any is left the farmers get to share that as a percentage of their nominal allocation. This water is called their “announced allocation”, which they pay for as it is used. At the start of a water year an irrigator knows precisely how much water he or she has to use for the year. Cotton growers do not get any preferences. An intelligent irrigator then chooses what crop best suits his individual circumstances to try to maximise his return. The crop he chooses should be his business.

    Now cotton well-managed does not really use any more water than some other crops and it provides very much-needed export income and above all its sale can be contracted into the future, so really if you grow cotton a sale is guaranteed.

    This is something that does not happen with a lot of small crops. Some of these can be downright risky to grow.

    BP Dam is predominately funded by the irrigator. He stays home and works his butt off while the recreational user has fun, fun, fun mostly for free. Just try to imagine what this region would NOT be if the dam was not here. All the development, tourist businesses, enjoyment by the masses as well as all the cropping and all the businesses and jobs involved in all this.

    The dam has really been very good for the region and slugging the irrigator can be seen as not really fair!

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