Queensland Urban Utilities,of which Brisbane is the largest shareholder,wasformed amid an overhaul of the south-east Queensland water grid during the Millennium Drought and along-running stoush between councils and the state government over rising water bills.
Prior to 2010,water and sewerage charges were handled directly by council and were included in rates bills. These,and the state’s bulk water fee,which was introduced after the government took over responsibility in 2008,are now paid to the utilities provider.
To reduce the price impact of significant investments in water infrastructure during the drought,the government initially set the fee below the cost of providing bulk water,with the debt to be repaid byincreases phased in to 2028.
In the 2004-05 financial year,just months after Campbell Newman was elected as the Liberal lord mayor of a still-majority Labor council,he broke his pledge for a below-inflation rate rise and the average residential ratepayer’s bill,including water and sewerage charges,was $1663.92,or $2477.08 in today’s dollars.
Mr Newman would break a similar rates promise after the 2008 election before successfully keeping the increase down in 2011. His successor,Graham Quirk,moved away from such pledges the following year,when a 4.5 per cent rise was blamed on the federal Labor government’s carbon tax.
University of Queensland economics professor John Quiggin said generally speaking,if councils kept doing the same work,their costs would rise in line with economic growth rather than inflation.
“If you tried to raise rates revenue to CPI[consumer price index],you’d have no capacity to respond to population growth,” he said.
The link between inflation and rates is also played down by the local government sector more broadly.
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Since 2005,the Local Government Association of Queensland has kept a “council cost index” based on Australian Bureau of Statistics wage,road and bridge construction prices,and inflation figures for the region.
This is weighted for the largest costs facing councils:wages,roads and transport,then general consumables,respectively. Due to its size,Brisbane also carries out some infrastructure projects usually overseen by states.
Property valuations also play a key part in council rates decisions.
In his budget reply speech last month,Labor Opposition Leader Jared Cassidy criticised the council’s recent rate rise – the highest in five years – for surpassing the rise in Brisbane’s CPI.
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Finance committee chair Adam Allan hit back at the comments,saying the “modest” jump,after the average bill went backwards in 2020-21,was needed to support service and infrastructure demands,and was lower than rises after other crises and any link to CPI had been dismissed by economic experts.
“The increase in the CPI,a basket of household goods and services,does not reflect the cost of bridges,buses,CityCats or road upgrades,” he said. “We aren’t running a grocery shop,we are running Australia’s biggest council in Australia’s best and fastest-growing city.”
In a statement,Cr Allan said the average Brisbane household paid the lowest rates in south-east Queensland and was reaping the benefits of the biggest infrastructure,public transport and green space investments the city has seen.
Queensland Urban Utilities spokeswoman Michelle Cull said the company had invested more than $3 billion in capital works since it was formed,with an average annual price increase of 3.1 per cent.
A Regional Development,Manufacturing and Water Department spokesman said the south-east water grid’s resilience was becoming more important amid patchy rainfall and greater population demand,with bulk water price rises reducing the chance of higher jumps in the future.
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