Australia’s Urban Water Sector Draft Report

PIAC has followed their 2010 submission to the Productivity Commission’s (the Commission) Inquiry into the Urban Water Sector by responding to the Commission’s Draft Report. The submission focuses on the Commission’s recommendation that the sector would benefit from a common objective that outlines the goal to provide water services in an economically efficient manner to maximise net public benefits. In answer to the inherent tension between equity and economic efficiency, the Commission suggests that mechanisms external to the urban water sector may be best placed to deal with distributional issues.

PIAC has concerns that the common objective proposed by the Commission contains no recognition that water is an essential service. PIAC argues that a focus on economic efficiency can produce negative outcomes for some groups of consumers. Additionally PIAC questions whether external mechanisms, such as social security payments, will be adequate to ensure equitable access, especially if water price rises outstrip social payment increases (as has been the case with electricity prices). PIAC recommends that any common objective for the urban water sector must include acknowledgement that no residential consumer is denied access to an adequate supply of water because of an inability to pay.

SEE ALSO Record Number 913  A rights approach: submission to the Productivity Commission inquiry into Australia’ Urban Water Sector

DATE ON LETTER SHOULD BE 30 May 2011