Government considering ‘Geography Tax’ on regional water connections, Redman

Author: Terry Redman
Published on: 29-July-2008

Member for Stirling Terry Redman has expressed concern over the regional implications of
an Economic Regulation Authority (ERA) report into developer contributions to the Water
Corporation for water infrastructure costs.

“The report recommends land developers should pay a water headworks charge per lot that
reflects the cost of distribution infrastructure for each individual scheme, rather than the
state-wide standard charge (SHC) that exists now,” Mr Redman said.

“Such a move would mean much higher costs for water connections in areas where the cost
of providing the service is greatest, typically, regional Western Australia.

“If the State Government pushes ahead with these recommendations, the result will be an
average estimated water headworks charge of $6,100 per lot for country connections, which
is almost double the current cost of $3,378. In the worst cases, some regional connection
costs may be as much as $50,000 per lot.“

In contrast, the cost of metropolitan water connections would drop from the current
statewide standard of $3,378 down to $2,400 per lot. Mr Redman said it appeared the ERA was intent on recommending that the Government go down the same path as it had for country power connections, and implement a headworks charge reflective of the cost of supplying infrastructure to residential and commercial developments.

“The ERA goes on to recommend the Government doesn’t cap the charge, but instead
allows it to be a negative price signal to developers wanting to develop in areas where the
cost of supply is high,” Mr Redman said.

“That can only mean one thing for country people, and that is a higher cost of development
and therefore an even higher housing cost to regional consumers, who already bear many
cost disadvantages.

“If the Government takes up the recommendations of this report we will see its ‘user pays’
approach wiping out regional development opportunities in the very areas that create this
State’s wealth. I call on the Minister for Water Resources to immediately rule out any notion of moving toward a full cost recovery policy to regional communities, and ask him to give a commitment to maintain the standard statewide uniform headworks charge for provision of water and waste services.”