Fozz,

While its true that the Productivity Commission in its current form was established under the previous Govt, it has a history dating back 30 years. Instead of being criticised, the Productivity Commission should be applauded for injecting some sense into this issue.

I am not disputing that low rainfall has contributed to water shortages. But it is one of several reasons, and probably the least important one. The main standout reason for water shortages is Govt monopoly, specifically artificially low water prices. We don't have shortages of orange juice, beer or milk in Australia, and that is because these commodities operate in a free market where companies respond to consumer demand. Govts, on the other hand, have artificially kept prices low and this has encouraged inefficient practices both by consumers and the Govt. Including a failure to invest in new dams or infrastructure over the past two decades.

Now even if I was to accept that your Gladstone story is true (and I doubt you have supplied all the pertinent facts) I still don't see a problem in prices rising 1200%. An increase of that magnitude, assuming that it is above the market rate, would simply be unsustainable. This is because it would create an enormous incentive for innovation, conservation, recycling, etc. But most importantly, it would encourage the development of new sources of water. And that is how it should be.

Notice how people have responded to rising petrol prices. They have changed their driving habits, bought smaller cars, use public transport, switched to alternative fuels, cycle/walk to work, etc. It has also sparked interest in alternative fuels.

But instead, you would prefer to trust politicians, like this guy:

"In December 1989 the first act of Kevin Rudd, the new chief of staff to Queensland's incoming Labor premier, was to cancel plans for the Wolfdene dam. This was despite expert advice that such a dam would be needed for southeast Queensland in the early 21st century."

http://www.theaustralian.news.com.au/story/0,20867,21002760-7583,00.html

Billie “Competition is a wonderful thing.

You really get excellent service from the subservient shop assistant who knows that a third of the staff are going to be laid off and is determined to stay.”

And you get worse service from some unionized authority where the indolent service staff could not give a rats because they know the government boss cannot sack them.

“The nurse caring for you in a private hospital was probably hired at the start of the shift and doesn't know the ward routine and is probably more worried about getting enough shifts to cover their rent and car loan payments.”

No one is immune from housing (rent or mortgage) and possibly car or credit card payments billie.

Why don’t you engage your brain once in a while and produce a suggestion, instead of the tired and gaseous whine of the bloated.

As for “Australia spent about $200 million in the Solomon Islands, giving $128 million to the Packer family companies.”
Why not make a proper case billie, instead of taking cheap punches by crying “news headlines” which lack any detail.

Ed-online I note you have introduced organization of the water authorities. I can speak with some knowledge of Victoria

Victoria has a two tier system about 20 distribution authorities cover the state and overlayed are 7 water catchment authorities all operated as state government private companies.

Doubling handling of water is a total administrative waste.

The really galling bit is, over the past 10 years, the socialist state government has levied $1 billion of “special dividends” onto the metropolitan authorities.

That means $1 billion of rate payers money has been expropriated away from being spent of preventive maintenance and infrastructure development into things like Mary Delahunty’s “blue trees” debacle.

Because water is critical to life, I believe it should be the one and only resource / utility which must be handled by government and not in private hands. However, that does not excuse the government abuse of the corporate process which defrauds water users through immoral dividends and sub-economic operating structures.

Nothing wrong with a productivity commission as such Ed, just pointing out that all commissions and departments are political by nature and when one side has been in power for over 10 years, most high level, government appointed roles are filled by those with political sympathies and ideals of the same stripe as those in power.

I would suggest you look at how much orange juice, milk and beer is consumed in a single city before pointing out that we don't face a shortage of those things. The consumption of those things (for a single purpose) versus the consumption volume of water for countless differnt purposes is infinitly tiny by comparison (though in a place like Australia, beer might run a close second). You will note that in most places, the three commodities you mention would not have been produced there but bought in from elsewhere which, as previously mentioned cannot be done with an entire water supply. And water somewhere in the world was needed to produce then in the first place.

How long do you think it would take to develop and construct a new source of water (and how much money)? And what of the hardship and problems caused by gouging in the meantime? And if privately owned, it must profit to recoup perhaps a half-billion or so spent on investing in it. Without price controls and other regulations, how would you prevent collusion between big players? And, very importantly, how is a new kid on the block actually going to supply something that must be delivered through a single pipeline infrastructure already owned by the existing company?

You can't just pop accross town and buy it from the other shop because he's cheaper. You seem willing to risk entire communities in the conviction that a one-size-fits-all approach to economies is the way to go. Reminds me of communism in that respect Ed.

Strangely, you are not against public transport.

Col_Rouge in 1976 Victoria had the most integrated water management systems in the world and the autonomous independent English water authorities envied Victoria's integrated system. Sadly since then - no money has been spent on infrastructure and the Kennett government broke the Melbourne Metropolitan Board of Works into 6 seperate companies, each with the own CEOs, billing systems etc. I guess you are arguing for centralising water collection and distribution presumably operating the monopoly in the for-profit sector rather than using a government authority.

I am offended by your assumption that everyone on the government tit is lazy and incompetent. After all the biggest crooks appear to be in private industry as we are finding out about the Scott brothers being exposed by the Coles meat scandal and Allco. The government authorities used to provide most of the apprentice training and private industry hasn't stepped up to the plate and government bureaucracies used to appoint staff on merit - staff had to be qualified rather than just friends of . . . .

Its becoming clear that provision of utlities is a natural monopoly because we can't replicate electricity transmission lines, communications cable, gas lines, water pipes for each seperate provider. Its an abstraction to have companies competing to provide the service - they are just competing for the right to collect our money. The seperate companies focus on increasing market share at the expense of planning for future markets and maintenance of existing plant and equipment.

Fozz,

True, beer, juice and milk can be sourced from different places, but so can water. True, each commodity has a narrower use than water. But each requires water, and the manufacturers managed to find some. They did it, but our wise Govt monopolists apparently can't.

I don't know how long it would take to develop alternative sources, but it would be faster than two decades. The only 'gouging' going on in the meantime is that of the water police issuing fines for the heinous crime of watering the garden.

You seem to dislike profits. But profits are the incentives that drive innovation and economic progress, without them, we would be a third world country. Without them, there would be water shortages. Oh yeah, we already have water shortages, funny about that. You are attacking the very thing that will help to increase the supply of water in Australia.

"how is a new kid on the block actually going to supply something that must be delivered through a single pipeline infrastructure already owned by the existing company?"

For starters, remove govt bans on water useage and allow the existing company to charge whatever it likes. The higher prices will encourage exploration of new sources of supply and consumer conservation.

"You can't just pop accross town and buy it from the other shop because he's cheaper."

People buy water from the supermarket every day.

"You seem willing to risk entire communities in the conviction that a one-size-fits-all approach to economies is the way to go."

I assume by "risk" you mean higher prices. Many people are prepared to pay more for water. Water is, after all, a scarce resource, and its price should reflect that fact. As for those who don't want to pay more, they can just use less. People ought to be free to choose, unlike the current arrangement.

"Reminds me of communism in that respect Ed."

The current arrangement is very much like communism. Under communism the price of everything was controlled by the State and citizens were encouraged to dob in their neighbours (i.e. a "one-size-fits-all approach").

The final paragraph of Billie's last post is profoundly correct. Hear, hear Billie!

I am starting to get annoyed Ed. Your arguments are becoming silly. I don't dislike profits. They are a necessity. But some things are much more effectively and fairly run/distributed on a not-for-profit basis.

The whole idea of private monopolies is to maximise profit by keeping other players out. You are fantasizing if you think that anything other than near-draconian regulation will force private owners to share access to the only possible means of delivery.

"People buy water from the supermarket every day". This is the silliest thing you've said yet. Come back with a cost/benefits analysis of bathing, cooking, watering the garden, washing the car and running the washing machine with evian or perrier. Don't forget delivery costs and the storage and pumping facilities needed. I wonder if Rio's aluminium would be healthier if it was electrolised in "roaring forties natural rainwater"?

So those who don't want to pay more (or CAN'T) will just have to use less - but this makes them "free to choose"?

Get yer hand off it Ed.