Water price decision invests in sustainability

AS Queensland irrigators count the cost of a tough summer season, they have at least been spared from having to pay a substantial charge to cover a return on irrigation scheme headworks.
For almost a year now, the Queensland Competition Authority (QCA) has been conducting a review that would recommend new SunWater irrigation prices for the next five years.
This review has been a major focus for the Queensland Farmers’ Federation. We were very concerned that the imposition of a rate-of-return on irrigation schemes would have made a number of farms and irrigation areas unviable or unable to invest in their futures despite efforts to investigate irrigators’ capacity to pay these increased charges.
QFF has made repeated submissions to this effect.
Following an announcement late last year, we are now looking at a policy that is good news for irrigators, communities, and the State.
Minister for Natural Resources, Stephen Robertson, is to be congratulated for his leadership by striking out the additional rate of return for infrastructure built prior to October 1, 2011 (which is when the new price path is expected to begin).
He has also removed the capacity to pay assessment – which would have been extremely difficult and complex – and saved the industry the agony of negotiating this process for another six months with a high degree of uncertainty.
Further, he has ensured QCA is in position introduce price increases over a period of five years or more to moderate the impacts of large price increases in particular schemes.
Ultimately, there are still some challenges ahead for irrigation water prices, but this decision brings us into line with the policies of southern States such as NSW and hopefully gives us the opportunity to grow irrigation schemes in Queensland.
Instead of having the irrigation sector looking over its shoulder and trying to pay for dams that the State built decades ago, schemes can have some confidence to look to the future and make long-term investments to modernise operations.
This focus on long-term sustainability of agriculture is a cornerstone policy of QFF, so it is pleasing to see Minister Robertson recognising that and he should be credited with taking decisive action.
In the future, new irrigation areas and infrastructure built after October 1, 2011, will require a rate of return for SunWater.
Farmers will therefore need to have a strong say in where that capital investment goes. Irrigators will be the ones paying, so it makes sense that they are fully involved in the process.
In addition, another challenge for the sector will be an assurance given by the Minister about the costs of upgrading Queensland’s dams to withstand a one-in-100,000 year flood.
The government has taken this issue off the agenda for the coming price path.
We believe that the need for spillway upgrades must be fully justified along with any proposals for cost sharing involving SunWater customers.
From here, the next point of focus is that SunWater has just released the network service plans for each of the irrigation schemes across the State.
These plans provide SunWater’s assessments of the costs of providing bulk water services over the next five years.
The Competition Authority plans to consult with each scheme in the March to April period, focusing on issues such cost efficiencies, programs for refurbishment of scheme assets, and tariff structures. Each scheme will have some homework to do to understand what SunWater is proposing in these plans and to prepare submissions to the QCA by April 22.
The QCA will release its draft report in mid-June in time for further consultation, and the State Government is to decide on the final price paths for implementation from October 1.
In all, it is shaping up to be another big year for water policy for Queensland irrigators. Throughout this, QFF will be continuing to push for policies that ensure a long-term future for the industry and a productive environment for Queensland farmers.