A pricing proposal to increase water prices for bulk rural services could see standard water use customers’ prices increase by up to 22 per cent every year for five years.
Water NSW has submitted a proposal to amend prices charged across NSW, including Namoi customers.
A pricing proposal was released on November 1 with submissions invited on the changes. An online public hearing will also be held on the matter on November 14.
The move to amend prices by such a large amount has been met with anger by peak irrigators’ associations as well as locally through Namoi Water.
The pricing proposal, now on display through the Independent Pricing and Regulatory Tribunal (IPART), shows the general security fixed charge rising for Namoi customers from $11.77 per megalitre in 2024/25 to $29.51 per megalitre in 2029/30 while the variable usage charge for standard water customers will increase from $35.98 per megalitre in 2024/25 to $96.73 per megalitre in 2029/30.
“The last determination saw the Namoi prices rise by 49.8 per cent, and now in this one they’re proposing an annual increase of 20 per cent for the likes of general security water charges regardless of whether the water is available or not, and annual increases of 22 per cent for the use of the water when it is there on top of that,” Namoi Water executive officer Mick Coffey said.
“Over 100 per cent increase in costs – absolutely ludicrous! Yes, costs in all aspects of society have risen, but not like this.
“The determination period we are currently going through was meant to see the Gunidgera weir raising project completed, customers were promised the significant problems experienced with infrastructure such as gauging stations would be fixed, that the webtool platforms would be accurate and user friendly, the key data server to process and store the pumping details for the NSW Non-Urban Metering Policy would work efficiently, that the ability to interact with WaterNSW staff to have questions, queries and issues workshopped and addressed, that approval timeframes would be reduced, consultation to changes would adequately held and plenty more remedies and improvements were promised. Our members have certainly not experienced this.
“In the lead up to this as part of the consultation directed by IPART, WaterNSW recruited people for what they called Water Working Groups, where they were to gather feedback, thoughts, recommendations and information from a broad section of the community as to how they should spend their money, how they should charge for it etc,” Mr Coffey said.
“What resulted was a frustrating, farcical process which saw people with absolutely zero water literacy providing WaterNSW with aspirational feedback about spending exorbitant amounts of money on trying to achieve things with no thought to
the reality or validity of the way to achieve these.
“To try and put it in a different perspective for people to understand – Namoi Water is not asked, nor should we be, how to build roads and bridges. We have no credentials to form opinions from, nor understanding of how and what costs are involved.
“If we were for some reason asked, you’d hope anything we tabled wouldn’t carry any weight, and most certainly shouldn’t be acted upon. If we were asked what we’d like it’d be four-lane fully sealed raised roads everywhere with massive concrete bridges so we can drive around everywhere even in a flood. Sounds great, but who’s going to pay for that? IPART making this directive has resulted in WaterNSW insulting its customers immensely by accepting the feedback of uninformed people.”
Mr Coffey said Namoi Water, along with other valleys, NSW Irrigators Council and other organisations are furious with the proposal released.
“The pricing model is completely defective. Irrigators are currently paying anywhere of 80-100 per cent of the operating and capital expenses. A significant amount of this cost is to deliver services and activities to the wider community such as environmental planning and protection, recreational, cultural and environmental water storage and flows, fish passageways etc,” Mr Coffey said.
“The current mindset and methodology see the trajectory of constantly raising prices way above CPI be seen as acceptable and sustainable – it is absolutely not and will simply drive people out of business.
“If there’s costs which aren’t related to water delivery to license holders, then treasury needs to become involved the management of that water. It’s not the local people who work for WaterNSW – they are magnificent at their jobs and our members appreciate what they do. At times they share similar frustrations to customers I’m sure. They’re underresourced in the current structure, a change in how the whole framework looks would benefit them without costing more if the appetite and the gumption was there from corporate level.”
Mr Coffey said Namoi Water knows it costs money to run systems and infrastructure, such as Keepit and Split Rock dams, but members are being hit with way more than their fair share of the expense.
“Most people either don’t know or easily forget that irrigators currently pay for 80 per cent of capital expenses and 100 per cent of operational expenses to manage waterways and infrastructure, yet only around 14-16 per cent is actually used for irrigation by Namoi Valley farmers,” he said.
“Sevent-eight per cent of the water in the Namoi River system is reserved for the environment, with the remaining eight per cent being used by stock and domestic, town water supplies and conveyance.
“The money that funds so many of the things that the entire community needs and benefits from, come from the irrigation industry – things like fishing, kayaking, skiing etc in Keepit and Split Rock or the river itself. Even in years of drought, when there is reduced access or zero access to water irrigators must still pay their license fees.”
The state’s peak irrigators’ body, the NSW Irrigators’ Council, is also alarmed by the proposal and has urged stakeholders across industries to understand the implications by the new pricing structure.
The council’s chief executive officer Claire Miller said the pricing proposal recommends hiking water bills by 21-24 per cent every year for five years, adding up to $40,000 to a ‘typical’ farmer’s water bill by 2030.
“Many stakeholders are not fully informed about the proposed prices, leaving them at risk of being
unprepared until it is too late,” Ms Miller said.
“This translates to the typical farmer with a high security entitlement paying $7924 more each year and the typical general security entitlement holder paying $3840 more each year.
“But WaterNSW’s typical farmer scenario masks IPART’s valley by valley pricing scenarios, in which different valleys are facing cumulative price increases of 200 per cent and more over five years. These pricing increases are simply unaffordable – they will send family farms and other rural industries using water out of business.
“The water pricing model in NSW is fundamentally broken when Rural WaterNSW customers are currently covering 80-100 per cent of both operating and capital expenses.
“Many of these costs are for public good services and activities on behalf of the broader community, such as environmental planning and protection, recreation, cultural and managed environmental flows, and the construction of fishways.
“It should not fall upon rural water customers to pay for these additional public good services.
“Rural water customers should be charged only to the extent of what it costs to deliver water, and that all other costs associated with water management should be shared across the community via the public purse.
“WaterNSW’s revenue requirements are rising faster than businesses’ capacity to pay. Rural water customers are already grappling with soaring input costs — interest rates, fuel, insurance, machinery, wages, and energy.
“This is not just about farmers; everyone will feel the pinch from racing, to manufacturing, mining, processing and competitive sports like golf.”
Landholders using irrigation are also facing higher water allocation prices due to state and Commonwealth environmental water recovery.
Few rural water customers can absorb these exorbitant increases in their water costs without severe financial distress.
“Price increases of this magnitude threaten the viability of small and medium family farms, leading to closures of businesses, lost employment, and a decline of industries critical to the economic and social wellbeing of regional communities,” Ms Miller said.
“If such drastic changes were proposed in any other sector, they would be met with widespread opposition. We cannot accept this unreasonable price rise and must make our position clear.”
In a statement released the day the pricing proposal was published, Water NSW said it has considered all options in keeping costs as low as possible.
“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, focusing on highly valued services and reducing costs for the 2025-2030 proposal,” the statement read.
“IPART, as the independent pricing regulator, will closely review the WaterNSW pricing proposal to determine whether it provides value for money, is in the long-term interests of customers, and delivers the outcomes customers need and want.”
A draft decision is expected to be published in March 2025, with a final decision due in June 2025.
To order photos from this page click here
