Water Prices and Scarcity

Due to climate change and population increases we are having increasing problems with the water supply in Australia. Peter Lieverdink suggests that we have more options for water supply including treated sewage similar to the Netherlands here he grew up. However I believe that in Australia we already do what he proposes (put treated sewage in rivers and then use the same rivers for the water supply). It’s just removing the middle step (of having the treated sewage in a river) that is controversial.

I recently examined a water bill for my house. Among other things it said that my water use was slightly above the average for houses that use water efficiently and significantly below the average for typical water use. The funny thing was that most of the expenses on the bill were not actually related to the amount of water used. My bill for a quarter was $54 service charges for sewerage and water (of which $39 was sewerage), $30 for sewage disposal, $26 for water, and $14 for drainage. So the cost of disposing of sewage was greater than the cost of getting fresh water and the sewerage service charge was the largest single item on the bill.

Australia supposedly has a capitalist economic system in place (except for the communist policies related to farming and the protection of some industries such as car manufacture and coal mining). Surely the right thing to do is to make water expensive enough that people have a financial incentive to conserve it!

The first thing that should be done is to make the majority of the value of a water bill received by a typical household be determined by the amount of water used. This could be achieved by reducing the fixed components of the bill to something small (EG $20 per quarter instead of $98 for me) and then increasing the cost per kilo-litre (EG from $0.85 to $2.50). The end result would be that people who use average amounts of water would pay about the same amount as they do now and people who use less than the average amount would get smaller bills, while government revenue would remain the same.

The next thing to do is to have different tarriffs for different quantities of water used. The first 50L per day could be free (water for drinking and cooking is a right), between 50 and 450L per day (451L per day being regarded as efficient water use for a house with four occupants and a medium garden) could be at slightly more than current prices, and usage greater than 450L per day could be significantly more expensive.

The current situation is that everyone is going to pay through taxes for desalination plants and other expensive methods of producing new fresh water. Having people pay for what they use is the capitalist way.

2 comments to Water Prices and Scarcity

  • IanN

    I worked out from my last water bill that if I halve my already efficient water usage, my bill goes down by only 11%. The rental, sewerage and parks costs are too high, and the usage is too low. I agree with your idea of stepped rates. Of course, industry will want the steps the other way, so the more you use, the less per litre you pay. We should resist that pressure.

  • Our (Tassie) power company does something like the reverse of this. You get billed 15.many cents for the first half megawatt-hour, then 15.few cents for the next megawatt-hour & a half, & so it goes. I think it bottoms out at 9.some cents or 10.some cents. There’s also hot water & after-hours rates.