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Water charge risk for small settlements

14/08/2008 5:16:00 PM
Introducing a blanket user-pays system of charging for water could place some of Australia’s desert communities at a disadvantage, a new report from Desert Knowledge CRC (DKCRC) says.

The study looks at the capacity of desert communities to afford to pay more for water under a National Water Initiative (NWI) directive to move to ‘full cost recovery for all rural surface and groundwater based systems’.

A team led by Drs Meryl Pearce and Assoc Professor Eileen Willis of DKCRC and Flinders University has investigated the ability of families living in four remote Aboriginal settlements in South Australia to afford to pay more for their water.

“We found that households in these communities were already spending between 80 and 130pc of their income on the basic necessities of life.

"Their incomes are already barely above the poverty line,” Dr Pearce says.

“If you imposed water charges on these households many would simply be unable to pay them.”

The unintended result of a decision taken far away to raise water charges could be to make communities which were already economically marginal, potentially unsustainable, she said.

The team notes that the NWI was put in place to achieve greater efficiency in water use across the whole of Australia.

The NWI recognises that some settlements will never be economically sustainable but nevertheless states that in such cases ‘lower bound pricing’ should apply, in line with National Competition Policy (NCP) requirements.

“It was recognised that these rules might have unfortunate consequences for remote settlements, which is why we were asked to examine and report on their situation,” Dr Pearce says.

The researchers argue that many remote desert communities are already – of necessity – highly efficient and sparing in their use of water, and their inhabitants are keenly aware too, of the need to minimise waste.

“Some of these small communities already have a lot of water and energy efficiencies in place, such as housing designed for passive cooling or the use of supplementary solar power.

Others could adopt more of these measures if the capital cost could somehow be addressed,” Dr Pearce says.

She believes for example:

• The cost of evaporative cooling in summer – a major consumer of water – could be reduced if desert housing could be better designed for passive cooling and

• All homes could be fitted with more water-efficient technologies.

Dr Pearce says, many desert communities rely mainly on groundwater and infrequent rainfall for household supplies.

Few receive scheme water.

To charge these people more for their water under a national cost recovery directive would be more than most of their inhabitants could afford.

“There has been quite a lot of comment in recent times about the number of Australian families facing “utility stress” – that is being unable to afford rapidly rising charges for utilities like water, electricity, telephone or gas.

"The imposition of cost recovery in the desert would impose this stress on most households in these tiny, remote settlements,” Dr Pearce adds.

In one typically small community, the team found the median household income of $552.82 a week was only 3 per cent above the poverty line ($536.14), leaving little scope for paying water bills, especially in situations where there are few or no available jobs or enterprises which people can use to increase their ability to pay.

The managing director of DKCRC, Jan Ferguson, said the report highlights the importance of not applying blanket policies designed for major cities to remote communities in desert Australia without considering their special circumstances, because of the scope for unintended consequences.

The paper is being presented tonight at a public forum on water in remote Australia at the National Wine Centre, in Adelaide at 6.30pm, Thursday, August 14.

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