The NSW government is planning to siphon hundreds of millions of dollars out of Sydney Water over the next few years, as it moves to replace falls in money received from state-owned electricity generators as a result of the federal government’s planned introduction of a carbon tax.
Documents filed with NSW Parliament disclose Sydney Water is to pay an ever-increasing level of dividends to the government, as its profits surge to more than $500 million a year.
The Statement of Corporate Intent for the water company, which was tabled last Friday in State Parliament, shows Sydney Water expects to pay as much as $250 million in dividends to the government in the year to June 2014.
This will take the total dividend paid in the four years to that time to $967 million, as Sydneysiders are confronted with steady rises in water and sewage charges.
The Independent Pricing and Regulatory Tribunal is to consider an application from Sydney Water for a round of increases to water and sewage charges, to take effect from mid-2012.
In the past four years water and sewage charges rose 31 per cent, in large part to pay for the $1.9 billion Kurnell desalination plant, which the O’Farrell government now wants to lease off to private investors.
Sydney Water is yet to clarify what price rises it will seek from mid-2012, but total rises of more than 15 per cent are expected, or 3-4 per cent a year, to keep up with inflation.
Sydney Water earned a record profit after tax of $305 million in the year to June, and is to pay $230 million in dividends to the O’Farrell government, with dividend payments budgeted to rise steadily over the next four years.
When he was the Opposition Leader the NSW Premier, Barry O’Farrell, was a regular critic of the government policy of taking ever-larger dividends from government enterprises, while raising charges to taxpayers.
