I believe the State Government’s new water prices are a missed opportunity to reward water conservation. The increase will do nothing to encourage water conservation. It merely ensures that garden watering restrictions continue.  The Government have put into effect a three-tier pricing structure; an improvement on the two-tier pricing structure we had until earlier this week. But there are two problems with this. First, everyone still pays a supply charge of around $160 per year whether they use water or not. Secondly, there is little incentive to save water, since the new Government pricing has the same price for people using between 121 and 500kL per year. Since the metropolitan household average is around 250kL per year, almost everyone will pay the same for water when they turn on the tap. It makes it hard to save much money for those who are frugal with water.

I’m proposing a much more radical price for water, so that the water-thrifty are rewarded and the extravagant users get a price shock.

Thus, we should abolish the supply charge altogether and have single-residential dwellings pay as follows:
Up to 100kL per annum:              80c per kL
101- 200kL:                             $1.60 per kL
201kL – 400kL:                       $3.60 per kL
401kL or more:                        $6.00 per kL

Under this scheme, average households would pay about the same, but the savings add up dramatically if they cut their water consumption. If a family can cut consumption by as much as half, they would literally halve their bill.

On the other hand, households using double the average household (500kL per year) would have to pay $1,560.00, just over double what they would pay under the Government’s new prices.

Economic research makes it clear that water users respond to price increases. This proposal is about demand management. It will work!

Of course, the scheme needs to make allowances for those in our community who are less well off. The way to do this is through giving money back to such people, rather than messing with the pricing structure itself. Substantial rebates should be in place for health care card holders and those who have two or more dependent children living at home.

One must also consider the case of non-residential users. In my view these should have their maximum rate capped at $1.60 per kL, admittedly above the $1.38 cap set for businesses by the Government. Of course we want businesses such as nurseries to thrive, but their customers will just have to realise that prices must go up for products which rely on a lot of water for their production.

Under my pricing scheme we won’t need water police going up and down the streets looking for sprinklers on hot summer days – people will police themselves inside and outside the house. So garden watering restrictions could be eased to something reasonable, perhaps within an hour of dusk and dawn each day.

There are already four water supply districts around the country that do without the fixed supply charge. It can be done.

Ultimately we need quarterly water metering for every dwelling, including every apartment, so everyone can readily see how reducing household water use can save hundreds of dollars per year under the scheme I’ve suggested.

Should water become less scarce either through an increase in rainfall or the desalination plant turns out to the panacea the Government promises it will be, then the level of water rates can be reduced.