Substantial water pricing reprieve on the cards for farmers in NSW

Farmers across New South Wales may be granted a substantial reprieve from exorbitant proposed water bill increases that would have priced them out of business and Aussie food off the shelves.

IPART’s draft WaterNSW pricing determination released this month proposes only a 1.9 per cent increase in rural water bills in 2025-26 plus CPI, followed by CPI increases only in each of the following two years.

“This is massive discount on WaterNSW’s proposed increases ranging from 3 per cent to 35 per cent every year plus CPI across inland and coastal valleys,” said NSW Irrigators’ Council CEO, Claire Miller.

“NSWIC and its members told IPART loud and clear the current water pricing model is broken and must be fixed if our farmers are not to be priced out of business and local NSW produce priced off supermarket shelves.

“IPART has heeded that message, stating that its draft determination will enable affordability, cost-sharing, services and other issues to be worked through over the next three years to June 2028.

“This is a substantial win for our members and all rural water customers across NSW.”

The draft determination translates to farmers paying thousands of dollars less than was proposed in many valleys.

High-level analysis of the IPART tables suggests, for example, a typical farmer with a 500 ML general security licence in the Peel Valley will pay $233 more in 2025-26 instead of an estimated $3960.

In the Namoi Valley, for the same farmer, the difference appears to be $325 more instead of an estimated $3200. In the Hunter Valley on the coast, the difference is $306 compared with $2890.

In the Murrumbidgee, the same farmer is facing a $50 increase on WaterNSW charges, instead of an estimated $540, while in the NSW Murray, the difference is $31 more instead of an estimated $960.

“The devil is in the details, and we will be requesting more information from IPART to more accurately break down the impact in bills for the next three years, to help inform our submissions,” Ms Miller said.

“This IPART draft determination is welcome prospective reprieve not just for farmers, but all WaterNSW customers with water licences including local government, sport, processing and food manufacturing.

“We welcome the recognition that rural water customers should not be paying for non-commercial, public interest activities that are cost-drivers for WaterNSW.

“These include water safety, environmental and social outcome activities additional to the core business of delivering water to customers.

“We encourage all rural water customers to make submissions to IPART by June 3.”

In its information paper, IPART said WaterNSW had sought a 43 per cent increase in revenue.

“WaterNSW acknowledges this would lead to price increases above what customers have told WaterNSW they can afford,” the paper states.

“WaterNSW indicates the main drivers of the increases are macroeconomic factors and regulatory and government policy requirements which have imposed additional costs.

“WaterNSW has advised IPART that, without increased revenue, it cannot cover the costs of continuing to provide services it is expected to deliver to the required standard.

“IPART has received hundreds of submissions and heard concerns from stakeholders about the very large price increases that would be required to provide the increased revenue proposed by WaterNSW.

“At this stage, the tribunal is not convinced that all the increased costs proposed by WaterNSW are sufficiently justified as necessary and efficient.

“IPART will need to do more focused work with WaterNSW to assess its proposed levels of capital and operating expenditure.

“The tribunal has taken a range of factors into account in reaching this opinion and has not relied solely on the consultant’s review.

“We particularly considered feedback from our public consultation.”

Following the release of IPART’s information paper, WaterNSW said it is considering the details published by IPART including price increases proposed in its draft determination, and what this
means for operations and service delivery.

In preparing its pricing submission to IPART, WaterNSW considered all options to keep costs as low as possible for customers including reducing capital programs and services, as well as putting in place an efficiency program.

“Like many of our customers, WaterNSW business costs are significantly driven by the current macro-economic environment. This includes many factors which are outside WaterNSW control, such as rising construction costs, higher interest rates, insurance costs and land tax,” a statement from WaterNSW reads.

“During its largest and most far-ranging engagement and consultation process to date, WaterNSW spent almost two years listening and seeking input from customers, peak industry bodies and the community to deliver services that matter most to customers.

“IPART has proposed a shorter-term draft pricing determination to allow it time for additional analysis.”