Page 2816 - Week 08 - Thursday, 24 August 2006
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increase that, when pegged to the wage price index, will make it especially hard for those on fixed incomes to cope.
The increase in the water abstraction charge of 30c per kilolitre is another impost that has been poorly justified by the government. I suggest that the ACT government is on questionable legal grounds in charging Canberrans 120 per cent more for a “scarcity value” attached to their water which, according to Mr Stanhope, means “the value associated with the consumptive use of water by the territory preventing its alternative use for economically valuable purposes such as irrigation”. The Independent Competition and Regulatory Commission, the ICRC, has repeatedly sought legal advice on the legality of the WAC to ensure that it cannot be interpreted as a form of tax that Australian states and territories are not allowed to charge. Despite this, Mr Stanhope gave his assurance in estimates that they would not misuse such a tax, stating that the government is acutely aware of issues in relation to its constitutional capacity and would not inappropriately use the water abstraction charge. He continued:
We know the basis on which it can be levied and collected. We know our constitutional capacity and we will not transgress, obviously … The government is not going to go out and use moneys which it receives inappropriately … with its constitutional power. We are going to use the WAC for the purposes for which it is able to be collected, that is, to support the provision of water to the community.
This WAC increase also comes on the back of increases to Actew’s charges for water earlier in the year, which saw the maximum cost of water rise from $1.53 to $1.74 per kilolitre. These increases have been justified by Actew through a liberal interpretation of what they refer to as unforeseen costs that have affected their water price path, amongst which were adverse revenue impacts from the ACT government’s water restriction policy.
Not surprisingly, reduced water use has had the effect of reducing Actew’s income. Canberrans have understood that water is scarce and have made sacrifices by cutting back on garden watering, and reducing water use in their homes. This exemplary behaviour, I suggest, should not have been punished. By Canberrans having to pay more for such a vital resource by an increase in the price of water through Actew’s charges and its water abstraction charge, the government is only looking after its own direct and indirect interests through the direct tax revenue and the Actew dividends which, in effect, go straight into the government’s pocket.
I know all the arguments about the ICRC’s role, but the net effect is that taxpayers are going to pay more—and they do pay more. I feel quite sure that, with the Actew Corporation CEO drawing somewhere in excess of $450,000 a year—probably over half a million by now—water users will no doubt be grateful to make their extra contribution to preserving his lifestyle.
Such increases also fly in the face of poor financial decisions by Actew that are adversely impacting their bottom line and placing further pressure on them to raise prices so as to maintain a dividend stream for the government. The chairman of Actew, Mr Jim Service, conceded as much in his statements regarding the performance of TransACT, which has ultimately seen considerable funds invested in it. I note the exchange between Mr Service and me when I asked him about TransACT. He said:
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