Up to $300 million has been squandered in a politically motivated about-face by the Bligh government over water utilities.
Queensland Premier Anna Bligh yesterday announced she would repeal legislation that tied councils to the three water utilities her government created in 2009 at a cost to taxpayers of $80m.
This would allow councils to walk away from the utilities.
Ms Bligh also introduced a cap on water price rises over the next two years that will save ratepayers up to $125 a year.
But councils will be exposed to a funding gap, with state government bulk water costs expected to rise at least 27 per cent over the same period.
Southeast Queensland mayors slammed the move as a “political stunt” but Ms Bligh said the government had to act to “protect ratepayers” from water price rises.
Cost of living is the key issue in Queensland politics, and it has intensified since former Brisbane lord mayor Campbell Newman burst on to the state political scene two weeks ago.
Ms Bligh blamed council profiteering for the increase in southeast Queensland water costs, which have left households paying an average of $311 a year, $37 more than the previous year.
“The only thing that can be done to protect ratepayers is to give the water utilities back to councils and make councils politically responsible for water pricing,” she said.
“If ratepayers don’t like those water prices they can resolve that through the ballot box.”
The utilities about-face is the second water policy reversal after a refusal to introduce recycled water at the height of the state’s water crisis in 2008.
Under the present arrangements, the three water companies - Queensland Urban Utilities, Allconnex and Unity Water - operate independently under council-appointed boards.
The local governments have until July 1 to determine if they will stay with the water companies or create their own water supply business.
The councils’ peak body reacted angrily to the “one-page policy” announcing the utilities about-face and the cap on water prices. It blamed bulk water prices for the escalating costs that home owners have faced.
Local Government Association of Queensland executive director Greg Hallam said: “The government is looking for a political bandaid to fix the issue but they haven’t addressed the fundamental issue: the price of bulk water. The whole water grid was created in a panic and now we have got yet another panic.”
Mr Hallam said the Bligh government had ignored the association’s plan to merge the three companies into one supplier, which he said could save each ratepayer $80 to $100 a year.
He said the transaction costs to create the three utilities were up to $300m, including legal, financial and consulting fees.
The Mayor of Moreton Bay, Allan Sutherland, said the policy was “a political stunt because we are in an election year”. “It’s a knee-jerk reaction to Campbell Newman’s announcement (that he was running for parliament),” Mr Sutherland said. “There is no doubt about that whatsoever.”
In Cairns yesterday, the Liberal National Party leader-in-waiting took credit for Ms Bligh’s decision but described it as panicked.
“I think we’ve made an impact already,” Mr Newman said. “It’s a welcome step but it’s not enough.”
