Sydney Water’s dirty secret

Regulated revenue (covering drinking water, wastewater and some stormwater services) is, as earlier mentioned, set by the independent NSW body, IPART.

But unregulated revenue  – that is, revenue unhindered by the straight jacket of any overseer - shot up under the O’Farrell government from $145 million to $402 million. Put another way, from $48,000 to a whopping $158,000 per member of staff.

Now that is what I call prepping for privatisation.

A truly independent (Canberra based) body examining the regulatory costs imposed on Sydney Water as well as those areas where regulation is deficient would be a great disinfectant. Let such a body add or subtract regulation depending on what it takes to prioritise the consumers’ interest above all else.

High regulatory costs contribute to stifling economic activity, while no regulation or the wrong type of regulation turns an essential service like Sydney Water into a thieving rent seeking predator.

Finding the right balance should be child’s play for former Prime Minister John Howard’s Chief of Staff.

Who knows, separating ownership in Sydney from regulation in Canberra may well embolden Premier Barry O’Farrell to sell Sydney Water as soon as possible given how high he is ridingin the polls.

And for that matter, privatizing shouldn’t scare any of us provided the process is transparent; in any regulatory framework the interest of taxpayers and consumers take priority over maximizing the cash offered by a potential buyer; and that Premier O’Farrell takes to heart another of Justice Brandeis’ saying: “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both”.

As for me, I guess I’ll have to wait to see the colour of Sydney Water’s refund cheque.