Sydneysiders could each pay $264 extra in water bills every year – a 59 per cent increase – if Sydney Water is privatised, according to new modelling by the Centre for Future Work at the Australia Institute.
The new report, commissioned by Australian Services Union NSW & ACT, analysed the fiscal, economic and public health effects of privatising water.
Internationally, privately-owned water systems have resulted in higher bills, largely because of rising interest costs, debt, and dividend payouts.
Based on UK and US studies, the report shows private ownership of Sydney Water could likely see customers’ water bills collectively increase by as much as $1.4 billion annually.
The report says those extra costs would swell further in subsequent years as a result of normal inflation and possible population growth.
Selling Sydney Water and its $24 billion in assets would deprive the state of an average of $870 million annually in dividends and income tax revenue – several times more than the cost of servicing interest on the equivalent amount of debt.
Report author Dr Jim Stanford, Economist and Director of The Australia Institute’s Centre for Future Work:
“Sydney Water returns strong dividends and tax revenue to the state government each year, well in excess of interest costs on an equivalent amount of state debt. Losing these annual revenues would require an increase in taxes from other sources,” Dr Stanford said.
“Transferring Sydney Water to private hands would penalise its customers twice. Not only would they pay higher water bills, but also higher taxes, or alternatively reductions in services.
“Evidence shows privatising public assets can lead to a focus on financial engineering and restructuring over the delivery of safe water to the community.
“Privatising water systems can risk the safety and quality of water – an essential public service that’s vital to public health and liveable communities.”
ASU NSW Secretary Angus McFarland:
“Privatising Sydney’s water would result in wide-ranging consequences,” Mr McFarland said.
“No one wins under privatisation. Selling off Sydney Water will increase water bills, threaten jobs and the quality of drinking water, and leave the state economy worse off.
“Privatising water simply doesn’t make sense. Sydneysiders would be shelling out an extra $264 each per year for a poorer service that they no longer own.
“Customers and workers are relying on Sydney Water remaining in public hands. Sydneysiders are entitled to affordable safe water and workers deserve job security.
“More than 3,000 essential and dedicated Sydney Water employees deliver services to over five million people every day. They have worked tirelessly through weather and COVID-19 emergencies to maintain world-class water, wastewater and stormwater services.” Media