Chair of the National Water Commission Chloe Munro has called for a rethink of the way water is priced in Australia.

 

Releasing four reports that look at water pricing options and opportunities for greater competition, Ms Munro said, 'The right approach to water pricing will promote cost-effective services offering more customer choice, as well as encouraging innovation, efficient investment decisions and sustainable water use.'

 

The benefits of pricing water to cover the true cost of the resource, capital assets and service delivery were recognised by all governments under Australia's blueprint for water reform, the National Water Initiative.

 

Ms Munro said, 'While water bills should reflect the real costs of water supply, the Commission is well aware that significant investments in new infrastructure have meant that most Australians now face continuing price rises.

 

'That's why it is so important that governments and regulators give water service providers strong incentives to invest efficiently and deliver high-quality water services at the lowest possible cost. 

 

'Flexible pricing options would give customers more choice and better signal the value of our water. It is equally important that pricing is overseen by fully independent economic regulators', added Ms Munro.

 

The National Water Commission's Review of pricing reform in the Australian water sector report shows that approaches to pricing reforms have been patchy across states and territories, and makes nine recommendations on future water pricing reforms.  

 

Ms Munro said, 'The Commission commends moves by Tasmania and South Australia in undertaking institutional reform, including the establishment of independent price regulators. These reforms are being supported by a range of practical measures such as the rollout of water meters in Tasmania.'

 

'On the other hand, it is disappointing that the Queensland Government has chosen to step back from reforms and impose a short term price cap.'

 

'A better way forward for the Queensland Government would be to have an independent economic regulator to oversee water prices', said Ms Munro.

 

Three additional Waterlines reports published by the Commission examine externality pricing, efficient water resource pricing, and competition in the urban water sector.

 

Ms Munro said, 'The Commission sees real benefits in introducing greater competition into the sector, as another tool to drive customer choice, innovation and efficiency.'

 

The reports are part of a suite of work undertaken by the Commission to support its keystone report Urban water in Australia: future directions.