The Minister for Natural Resources, Lands and Water and MP for Barwon Kevin Humphries takes issues with us over our front page story this week.
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It is disappointing that The Northern Daily Leader article “ Tricks of the Trade” (Wednesday, July 16) contained serious omissions and distortions of fact, grossly misrepresented the recent Peel Valley trading scheme announcement and resorted to personal attacks.
You can have your own opinion, but you can’t have your own facts. The claims in the article do not in any way reflect the facts as outlined below:
Re: “Under the existing pricing structure, by 2016/17 Peel Valley irrigators will pay 2300 per cent more for each megalitre (ML) of water than their counterparts in the Murray Valley”.
This is incorrect – and demonstrates a lack of understanding.
The vast majority of irrigators in the Peel Valley hold general security (GS) licences. Based on 100 per cent of allocation, Peel Valley GS users will pay $48.59/ML and Murray Valley GS users will pay $9.24/ML, a price difference not even close to resembling the claim above.
While an inflated figure could be created by assuming the ACCC’s recommended price path will eventuate, the trial is the very initiative that will mean prices will not follow this upward trend.
Re: “This gross inequity, described as price gouging ...”
This is incorrect. As a signatory to the National Water Initiative (NWI), NSW has made a commitment to charge prices that reflect service delivery costs – which has been reflected in successive determinations by IPART.
Re:“Hopes that Mr Humphries and Mr Anderson would advocate for the change (to postage stamp pricing...”
This is misguided and incorrect: Notwithstanding NSW’s commitment to the NWI, there is no industry support for postage stamp pricing across NSW and, in numerous discussions with Peel users, I have never suggested I would advocate for it.
Re: “Mr Pengelly said the proposal would do nothing to drive down prices ...”
This is incorrect. Usage costs in all valleys are set to cover the costs of delivering the services in that valley. When usage costs are averaged over a greater volume of water, delivered prices per unit will fall –which is exactly what the trial will deliver.
The only conceivable way the trial will fail to deliver lower prices is if it is actively resisted by licence holders in the Peel. Should the Peel Valley Water Users Association (PVWUA) wish to perpetuate the problem and not be part of a solution, they will ultimately have themselves to blame.
RE: “We can’t trade because there is no allocation for GS ...”
This is misguided. There may be nil GS allocation right now but that will evolve over the year. If allocations stay at zero there will be nil usage charges as no water will be delivered, as is the case across all valleys.
Re: “The greatest beneficiary of the scheme will be State Water ...”
This is incorrect. The maximum price charged by State Water is set by the ACCC. At no point will State Water recover more than service delivery costs, making the claim they will be a beneficiary patently wrong.
The NSW Office of Water (NOW) has met with representatives of the PVWUA on numerous occasions to explain how the proposal will work and in each of these meetings each of the points above was covered in detail.
Favouring a path of deliberate misinformation over understanding will only perpetuate the
problem, and despite the rabid protestations of those that purport to represent the interests of water users the trial will deliver a market solution that will see prices fall.
I recently announced the $50 million Chaffey Dam augmentation, largely funded by the NSW government. This investment will increase water security for Peel Valley irrigators and it would be good for the PVWUA to acknowledge this point.
To ensure that the information received by licence holders is accurate, NOW will write to all Peel Valley allocation holders explaining the trial. This communication will outline how additional income can be generated through temporary trade of their entitlement.