By Gus Goswell
Posted June 17, 2010 09:32:00
Construction on the plant will begin later this year. (ABC TV)
The company building the desalination plant near Wonthaggi, south-east of Melbourne, has defended environment protection standards at the site.
The Environment Protection Authority (EPA) ordered AquaSure to act on concerns that acidic soils could pollute local waterways.
It also identified several other issues that have "the potential to impact the environment" and issued the company with pollution abatement notice.
AquaSure says it has developed a new management plan with the EPA to ensure no waters are polluted.
AquaSure's chairwoman Chloe Munro says the desalination plant project is environmentally sound.
"I'm extremely confident. The project is subject to very rigorous environmental oversight," she said.
"This was an issue that the EPA recognised was more extensive than any of us had originally thought. I think it's a actually testament to the rigour of the process that these steps have been taken."
Thursday, June 17, 2010
Desal builders ordered to fix acid water
June 17, 2010
THE consortium building Victoria's desalination plant has been ordered to clean up highly acidic water to prevent damage to wildlife and a nearby river at the Wonthaggi site.
The Environment Protection Authority found acid sulphate soil had been disturbed in the construction of the plant and contaminated on-site ponds.
The EPA warned run-off from the ponds could affect the Lower Powlett River and surrounding environment. The problem was discovered during an EPA inspection in March.
AquaSure has until August to produce an independent environmental auditor report showing that it has tackled the issue. It plans to neutralise the acid using lime.
EPA chief executive John Merritt said the environmental watchdog had been concerned AquaSure was not adequately managing the acid sulphate soil, which is naturally occurring.
AquaSure chief executive Chris Herbert said the company was committed to meeting high environmental standards.
ADAM MORTON
THE consortium building Victoria's desalination plant has been ordered to clean up highly acidic water to prevent damage to wildlife and a nearby river at the Wonthaggi site.
The Environment Protection Authority found acid sulphate soil had been disturbed in the construction of the plant and contaminated on-site ponds.
The EPA warned run-off from the ponds could affect the Lower Powlett River and surrounding environment. The problem was discovered during an EPA inspection in March.
AquaSure has until August to produce an independent environmental auditor report showing that it has tackled the issue. It plans to neutralise the acid using lime.
EPA chief executive John Merritt said the environmental watchdog had been concerned AquaSure was not adequately managing the acid sulphate soil, which is naturally occurring.
AquaSure chief executive Chris Herbert said the company was committed to meeting high environmental standards.
ADAM MORTON
Wednesday, June 16, 2010
Victoria's desal plant in trouble over toxic soil
From: AAP June 16, 2010
VICTORIA'S environmental watchdog has rebuked the company building the state's $3.5 billion desalination plant for not safely managing potentially toxic soils.
The Environment Protection Authority (EPA) has slapped the AquaSure consortium with a pollution abatement notice after a site inspection revealed high volumes of acid sulphate soils had been disturbed.
The soils are naturally occurring but can react with oxygen when disturbed, forming sulfuric acid which can kill plants and animals, contaminate drinking water and corrode concrete and steel.
Opponents of the project in Wonthaggi, on Victoria's southeast coast, say their fears have been realised, despite earlier assurances by the government that safeguards would be in place to manage sensitive soils.
EPA chief executive officer John Merritt said a review of management systems, and an inspection by EPA officers and an independent expert, revealed several ongoing issues at the site that had the potential to impact the environment.
"The recent inspection revealed high volumes of acid sulphate soils which had been disturbed, several on site water bodies with high acidity and potential for substantial runoff from the site, which could change the condition of the receiving waters," he said in a statement.
"Since putting AquaSure on notice, the company has taken positive steps to remedy the issues on site. We will continue to ensure these issues are managed appropriately and any environmental risks are fully mitigated."
AquaSure chief executive Chris Herbert said the company was confident the environment would not be polluted.
"It is important to note that this notice is about proactive, preventative action and that there hasn't been any pollution incident on site."
But opponents of the project say the potential for damage is real and they are being fed misinformation.
At a community liaison meeting on May 27, the Department of Sustainability and Environment (DSE) reported that there had been no compliance breaches.
According to the minutes, AquaSure was in ongoing discussions with the EPA regarding the management of acid sulphate soils, but "the EPA was happy with the physical work to manage this issue."
Watershed Victoria president Stephen Cannon said the statement contradicted the watchdog's actions.
"It's (acid sulphate soils) obviously a concern, if it was merely precautionary I would question why they would issue an abatement notice," he said.
"Acid sulphate soils once disturbed become very corrosive to the environment and so the management of works in the vicinity of them is extremely important and issues of cost come into play."
A spokesman for Water Minister Tim Holding said the government expected AquaSure would provide the EPA with the relevant paperwork to ensure they complied with the order.
When complete at the end of next year, the plant will generate up to 150 billion litres of water a year
VICTORIA'S environmental watchdog has rebuked the company building the state's $3.5 billion desalination plant for not safely managing potentially toxic soils.
The Environment Protection Authority (EPA) has slapped the AquaSure consortium with a pollution abatement notice after a site inspection revealed high volumes of acid sulphate soils had been disturbed.
The soils are naturally occurring but can react with oxygen when disturbed, forming sulfuric acid which can kill plants and animals, contaminate drinking water and corrode concrete and steel.
Opponents of the project in Wonthaggi, on Victoria's southeast coast, say their fears have been realised, despite earlier assurances by the government that safeguards would be in place to manage sensitive soils.
EPA chief executive officer John Merritt said a review of management systems, and an inspection by EPA officers and an independent expert, revealed several ongoing issues at the site that had the potential to impact the environment.
"The recent inspection revealed high volumes of acid sulphate soils which had been disturbed, several on site water bodies with high acidity and potential for substantial runoff from the site, which could change the condition of the receiving waters," he said in a statement.
"Since putting AquaSure on notice, the company has taken positive steps to remedy the issues on site. We will continue to ensure these issues are managed appropriately and any environmental risks are fully mitigated."
AquaSure chief executive Chris Herbert said the company was confident the environment would not be polluted.
"It is important to note that this notice is about proactive, preventative action and that there hasn't been any pollution incident on site."
But opponents of the project say the potential for damage is real and they are being fed misinformation.
At a community liaison meeting on May 27, the Department of Sustainability and Environment (DSE) reported that there had been no compliance breaches.
According to the minutes, AquaSure was in ongoing discussions with the EPA regarding the management of acid sulphate soils, but "the EPA was happy with the physical work to manage this issue."
Watershed Victoria president Stephen Cannon said the statement contradicted the watchdog's actions.
"It's (acid sulphate soils) obviously a concern, if it was merely precautionary I would question why they would issue an abatement notice," he said.
"Acid sulphate soils once disturbed become very corrosive to the environment and so the management of works in the vicinity of them is extremely important and issues of cost come into play."
A spokesman for Water Minister Tim Holding said the government expected AquaSure would provide the EPA with the relevant paperwork to ensure they complied with the order.
When complete at the end of next year, the plant will generate up to 150 billion litres of water a year
Wednesday, June 9, 2010
Water savings claims mauled by watchdog
ROYCE MILLAR AND MELISSA FYFE
June 9, 2010
The Brumby Government's long-standing claims about water savings and efficiency from irrigation modernisation have been mauled by the government's own financial watchdog.
Acting auditor-general Dr Peter Frost this morning tabled a scathing critique of Labor's water planning, in particular the $2 billion Foodbowl Modernisation Project and $750 million north-south pipeline.
His report found the decision to proceed with the irrigation upgrade "was based on advice of water savings and cost assumptions that had not been verified, technology that had not yet proven itself, and the feasibility of the project, which was unknown".
"As a consequence, assumed water losses have been significantly revised down, making the achievement of the intended water savings less certain."
The auditor found that the government failed to consider alternatives to the costly irrigation upgrades, and to demonstrate the need for the multi-billion dollar expenditure.
He slams the Department of Sustainability and Environment's poor record-keeping and says that projects have exceeded planned costs.
"Expected water savings had not been achieved and the effectiveness of the modernisation was uncertain," he said.
At a press conference this morning, Water Minister Tim Holding welcomed the auditor’s acknowledgement that the government was facing a water crisis when decisions were made to proceed with big water savings projects in 2007.
"If we had not embarked on these big projects in 2007 and we had not rushed to make we sure we completeed these projects as soon as possible, we ran a real risk of running the state out of water," he said.
Mr Holding said that if Victorians had suggestions on how the state could improve the delivery of the water projects, the government was keen to listen.
June 9, 2010
The Brumby Government's long-standing claims about water savings and efficiency from irrigation modernisation have been mauled by the government's own financial watchdog.
Acting auditor-general Dr Peter Frost this morning tabled a scathing critique of Labor's water planning, in particular the $2 billion Foodbowl Modernisation Project and $750 million north-south pipeline.
His report found the decision to proceed with the irrigation upgrade "was based on advice of water savings and cost assumptions that had not been verified, technology that had not yet proven itself, and the feasibility of the project, which was unknown".
"As a consequence, assumed water losses have been significantly revised down, making the achievement of the intended water savings less certain."
The auditor found that the government failed to consider alternatives to the costly irrigation upgrades, and to demonstrate the need for the multi-billion dollar expenditure.
He slams the Department of Sustainability and Environment's poor record-keeping and says that projects have exceeded planned costs.
"Expected water savings had not been achieved and the effectiveness of the modernisation was uncertain," he said.
At a press conference this morning, Water Minister Tim Holding welcomed the auditor’s acknowledgement that the government was facing a water crisis when decisions were made to proceed with big water savings projects in 2007.
"If we had not embarked on these big projects in 2007 and we had not rushed to make we sure we completeed these projects as soon as possible, we ran a real risk of running the state out of water," he said.
Mr Holding said that if Victorians had suggestions on how the state could improve the delivery of the water projects, the government was keen to listen.
The Desal Plant Stikes Again. "Farmers furious about collateral damage from Wonthaggi pipeline"
Wednesday, 09/06/2010
Farmers in Victoria's West Gippsland are angered and upset by construction work linked to the Wonthaggi Desalination plant.
Glen Forbes farmer Dorene Blum says 120 farms have had a road and pipeline put through their properties to link amenities to the site.
She says no amount of financial compensation will cover the damage the project has created.
"We were angry, and then I think now I'm still bitter. And I think David's just now numb," she says.
"And I think you'll find that 120 families are pretty much the same.
"There was massive anger to start with and then when it was like you've got no rights, no choice, no hope. People either become bitter or numb."
Farmers in Victoria's West Gippsland are angered and upset by construction work linked to the Wonthaggi Desalination plant.
Glen Forbes farmer Dorene Blum says 120 farms have had a road and pipeline put through their properties to link amenities to the site.
She says no amount of financial compensation will cover the damage the project has created.
"We were angry, and then I think now I'm still bitter. And I think David's just now numb," she says.
"And I think you'll find that 120 families are pretty much the same.
"There was massive anger to start with and then when it was like you've got no rights, no choice, no hope. People either become bitter or numb."
Friday, June 4, 2010
Wednesday, June 2, 2010
Vic govt off hook on desal funding deal
June 1st, 2010
The consortium building Victoria’s first desalination plant has secured finance for the project, sparing the state government from the need to dip into public funds.
AquaSure, which is building the plant on Victoria’s southeast coast, has attracted enough investors to fund the $3.5 cheap air max shoes billion project.
The Victorian government had agreed to step in as a last resort if AquaSure could not raise sufficient funds.
Treasurer John Lenders announced on Thursday that step would not be necessary.
He said AquaSure had attracted more than 20 nike shox 2010 additional investors as of this week, raising $1.7 billion.
“This should silence those who said this project and other public private partnerships could not be built in the current cheap nike shox nz global economic nike air max shoes environment,” Mr Lenders said.
“In awarding the contract to build and operate nike shox shoes the desalination plant I provided a financial guarantee to ensure the project could go ahead despite the impact of the ongoing global financial crisis.”
Mr Lenders said AquaSure had indicated that without government backing the desalination plant would have struggled to get off the ground due to a tightening global credit market.
Construction of the plant, near Wonthaggi, started last month and is expected to be completed at the end of 2011.
It will generate 150 billion litres of drinking water a year.
The consortium building Victoria’s first desalination plant has secured finance for the project, sparing the state government from the need to dip into public funds.
AquaSure, which is building the plant on Victoria’s southeast coast, has attracted enough investors to fund the $3.5 cheap air max shoes billion project.
The Victorian government had agreed to step in as a last resort if AquaSure could not raise sufficient funds.
Treasurer John Lenders announced on Thursday that step would not be necessary.
He said AquaSure had attracted more than 20 nike shox 2010 additional investors as of this week, raising $1.7 billion.
“This should silence those who said this project and other public private partnerships could not be built in the current cheap nike shox nz global economic nike air max shoes environment,” Mr Lenders said.
“In awarding the contract to build and operate nike shox shoes the desalination plant I provided a financial guarantee to ensure the project could go ahead despite the impact of the ongoing global financial crisis.”
Mr Lenders said AquaSure had indicated that without government backing the desalination plant would have struggled to get off the ground due to a tightening global credit market.
Construction of the plant, near Wonthaggi, started last month and is expected to be completed at the end of 2011.
It will generate 150 billion litres of drinking water a year.
Afpc – Cost Of Living Crisis Revisited
Designed as Commodity
May 27, 2010
There are many aspects to Australia’s “cost-of-living” crisis. And it is a crisis felt most acutely by Australia’s poor and vulnerable. From housing, to welfare, to the transport economy, it is a crisis that is experienced in many varied forms.
And it is a crisis that extends also to the rising cost of utilities such as water, and the failure of wages – especially in the case of those on minimum and low incomes – to keep pace with inflation.
My previous article considered the transport economy, and how it impacts on this crisis. This article will begin by considering the impact of private infrastructure and essential services on Australian citizens and consumers: especially in the instance of “PPPs”. (Public Private Partnerships)
Private infrastructure, utilities and essential services
Private infrastructure and essential services comprise yet another burden for which consumers are paying the price.
Mobile phone tower networks comprise one of the worst examples of duplicated private infrastructure. In this instance, under the aegis of competition, there resulted an explosion in the infrastructure cost to the broader industry.
Meanwhile, the fibre-optic broadband network embraced by Federal Labor is being proposed in the form of a part-private monopoly. Without the benefits of competition or of a natural monopoly what is to protect consumers from abuse of such overwhelming market power?
“Public Private Partnerships” (PPPs) have been supported by Labor governments in fields as diverse as roads and water.
Some of us – despairing of the situation – may very well ask: will the tendency ever end?
The PPP model also fails for a number of other reasons:
First, even the most secure business interest cannot obtain credit as efficiently as government: especially in the case of Federal government borrowings. In Victoria, for example, the cost of the City Link road tolls were twice as high as they would have been if the tollway had been financed by public borrowings. Public Private Partnerships are also often adopted by government under the guise of “privatising risk”, “capturing” the skills of the private sector, or avoiding public debt.
The debt argument is a furphy. Displacing debt “off the books” – so that it is met by the public in their capacity as consumers – can cost several times more in the long run than had such projects been financed with public debt in the first place.
And any skills from the private sector can feasibly be “captured” through competitive tendering, without any need for private ownership or wasteful private finance.
Furthermore – in fields as diverse as health, education, ports, roads, rail, communications – if a PPP fails, governments are held responsible, and they inevitably have to “pick up the pieces”.
In the worst examples government is expected to intervene so as to limit competition and guarantee a market for the private operator.
In the case of transport infrastructure this has involved the closure of roads; and has even assumed generous compensation should transport alternatives (e.g. public transport) be developed.
And the outcome of private infrastructure is similar to that of a “flat tax” – and such a burden is especially onerous for the poor and vulnerable.
The consequence of all this is an inflammation of the broader cost-of-living crisis, and greater burdens upon citizens in their capacity of tax-payers and consumers.
Setting the scene for water privatisation in Victoria
Now, consumers in Victoria are being asked to foot the bill for a massive “PPP” in the form of a desalination plant in Wonthaggi. The project has been estimated at a capital cost of $3.1 billion. Columnist, Ken Davidson, poses the question of how a “desalination plant with water costing six times the cost of dam water compete?”
The answer is simple. Even when the plant provides far more supply than there is demand, consumers will be fleeced in return for “security of supply”. One outcome of the process will be a doubling of the price of water over the next couple of years. And in the face – potentially – of dramatic over-supply: “Victorian taxpayers will be slugged about $550 million a year irrespective of whether the water is used or not.”
Alternatives, such as systematic “grey water harvesting” from showering and laundry, have been ignored, as has the option of a water pipeline from Tasmania.
Treated grey water treatment systems, in particular, can be so effective as to be suitable to wash cars, flush toilets, use in the garden, and use in washing machines.
The pipeline option, meanwhile, is estimated to cost approximately $2 billion to build, and could provide “Melbourne with 350 gigalitres of water a year”. This at a cost of about $300 million a year.
So regardless of environmental concerns, in the case of the desalination plant, the option of the Tasmanian pipeline would prove to be almost twice as cost-effective – without even considering “grey water harvesting”. And surely further subsidisation of “grey water harvesting” must remain a serious option.
Public Private Partnerhips are costing Australian tax payers and consumers billions: the consequence of inefficient private financing and bad judgment, and arguably exercises in favouritism the legitimacy of which must be called into doubt.
The cost to tax-payers and consumers for wasteful private infrastructure is palpable: and has a heavy impact on Australia’s cost-of-living crisis.
Public provision of essential infrastructure, however, in the form of natural public monopoly, can provide a cost-effective framework around which the broader economy can thrive.
Further aspects of the cost-of-living crisis: housing, wages, welfare …
For years the Howard conservative government neglected the crisis in housing affordability. If anything, policies such as the “First Home-Buyers Grant” exacerbated the crisis as the program attracted regular abuse.
Research shows that at least 300,000 Australian families are facing “severe” levels of mortgage stress, and “face a significant chance of defaulting on their home loan”. Such was the influence of the housing bubble that, even with unremarkable rates of interest, “over the past 10 years” houses became “nearly twice as expensive relative to income”.
Further studies have shown that about half the typical family’s after tax income was “swallowed up” in mortgage payments. Meanwhile in the rental market vacancy rates have hovered at around just 1 to 2 per cent.
What is worse, some families slip through the cracks, often struggling on exploitation wages, or with mental illness and/or trying to survive on welfare. For these the trauma of homelessness is a brutal reality.
There is an obvious, desperate need for expanded outreach services and public housing. But in Melbourne alone, public housing has declined to less than 4 per cent of housing stock.
With the impending global downturn, though, impetus is building for a correction in the Australian housing market. Some suggest price drops of up to 20 per cent, while others believe devaluation of about 10 per cent across Australia over the next year. Such a correction could be catastrophic for those who took out exorbitant loans without much or anything in the way of a deposit.
Australian Property Monitors (APM) General Manager, Michael McNamara recently commented that such people: “may find themselves in a situation very soon where they’re sitting on negative equity”. Despite this very real crisis confronted by investors, however, there still remains a need to expand housing supply, boost vacancy rates, and provide affordable housing for those most in need.
Immediate public investment in quality public housing – perhaps in the vicinity of $8 billion over the current term of the Rudd Labor Government – could address the homelessness crisis, and provide a structural basis for a long term correction in the housing market – including rental.
Final concerns: wages, welfare and the cost of living
Australian Bureau of Statistics (ABS) figures, drawn over the 12 months to July 2008, show that: “petrol prices increased by 8.7 per cent in the three months to June.” The price of milk rose by 12.1 per cent, cheese (up 14.2 per cent), bread (up 6.8 per cent) and poultry (up 11 per cent)”.
In the 12 months to March 2008, meanwhile, electricity rose 10.5 per cent, and bank fees went up by 7.6 per cent.
Variable interest rates of Australia’s banking oligopoly, in particular, have been rising well above official RBA (Reserve Bank of Australia) rates. The banking sector should be expected to exercise social responsibility – especially in the face of probable economic contraction.
While bank share value has declined, bank profits are still strong. In August, for example, the Commonwealth Bank registered profits of almost $4.8 billion. All in all, this raises the question as to whether the Rudd Government ought to consider the re-establishment of a public sector bank to provide real competition and counter profit-gouging and collusive practices.
Beyond this, industrial relations and minimum wages, as well as tax and welfare reform must be at the heart of any effort to respond to the cost-of-living crisis.
Overall, the wage share of the economy declined from 70.6 per cent of GDP in 1999 to 66 per cent in 2007 – representing over and above $2,000 a year.
This year the Australian Fair Pay Commission (AFPC), ruled in favour of an increase of only $21.66 a week for low-paid-workers, which does not even keep pace with inflation. The ACTU had called for a minimum wage increase of $26 a week.
But Margarita Windisch, writing for Green Left in July 2008, argued that “To cover the real cost of living increases for low-income workers, the minimum wage needed to be increased by 6 per cent, or $31 per week”.
Clearly, there is a need for wage justice especially for the low paid: and increases in the overall cost-of-living need to be met with welfare reform – not just “some time in the future” but immediately.
The compassionate and just response to inflation is not to impose wage restraint – especially for the low-paid – but rather ought to involve tax reform, increasing the relative share of burden in combating inflation for those most able to afford.
Accompanied by such tax reform, greater wage justice – and a greater wage share -should be secured for those on middle, minimum and low incomes. Enabling workers to bargain collectively must be part of this strategy – including acceptance of the legitimacy of pattern bargaining.
Complementing such strategies, Australia’s tax free threshold should be raised and means tests relaxed for those on low incomes.
Finally, in the face of the cost-of-living crisis, there is a strong case to be put that full pensions should be raised to 30 per cent of Male Average Weekly Earnings (MAWE) (up by 5 per cent of MAWE or more – to $646.16 a fortnight).
Australia’s cost-of-living crisis demands a variety of responses by government.
Some problems – such as the cost of petrol – are embedded structurally now in the world economy. Only investment in alternatives will ease demand for oil. But tax and welfare reform, and reform of industrial relations – can spread the burden more fairly.
Meanwhile, investment in public housing stock could increase supply, bringing housing back within reach of ordinary Australian families, and also for the poor and vulnerable.
A revolution in transport infrastructure, and in the adoption of hybrid and electric vehicle technology – can provide better value and efficiency even while reducing greenhouse gas emissions.
Finally, abandoning “Public Private Partnerships”, and turning to public debt financing and provision of infrastructure, can provide better value and fairness for consumers and taxpayers. This, in turn, would impact positively upon the cost-of-living.
We are not helpless in the face of the cost-of-living crisis. But times such as these demand decisive action by government. Let’s make our voices heard: it’s time for action – now.
Source: http://ezinearticles.com/?Cost-of-Living-Crisis-Revisited&id=1868036
May 27, 2010
There are many aspects to Australia’s “cost-of-living” crisis. And it is a crisis felt most acutely by Australia’s poor and vulnerable. From housing, to welfare, to the transport economy, it is a crisis that is experienced in many varied forms.
And it is a crisis that extends also to the rising cost of utilities such as water, and the failure of wages – especially in the case of those on minimum and low incomes – to keep pace with inflation.
My previous article considered the transport economy, and how it impacts on this crisis. This article will begin by considering the impact of private infrastructure and essential services on Australian citizens and consumers: especially in the instance of “PPPs”. (Public Private Partnerships)
Private infrastructure, utilities and essential services
Private infrastructure and essential services comprise yet another burden for which consumers are paying the price.
Mobile phone tower networks comprise one of the worst examples of duplicated private infrastructure. In this instance, under the aegis of competition, there resulted an explosion in the infrastructure cost to the broader industry.
Meanwhile, the fibre-optic broadband network embraced by Federal Labor is being proposed in the form of a part-private monopoly. Without the benefits of competition or of a natural monopoly what is to protect consumers from abuse of such overwhelming market power?
“Public Private Partnerships” (PPPs) have been supported by Labor governments in fields as diverse as roads and water.
Some of us – despairing of the situation – may very well ask: will the tendency ever end?
The PPP model also fails for a number of other reasons:
First, even the most secure business interest cannot obtain credit as efficiently as government: especially in the case of Federal government borrowings. In Victoria, for example, the cost of the City Link road tolls were twice as high as they would have been if the tollway had been financed by public borrowings. Public Private Partnerships are also often adopted by government under the guise of “privatising risk”, “capturing” the skills of the private sector, or avoiding public debt.
The debt argument is a furphy. Displacing debt “off the books” – so that it is met by the public in their capacity as consumers – can cost several times more in the long run than had such projects been financed with public debt in the first place.
And any skills from the private sector can feasibly be “captured” through competitive tendering, without any need for private ownership or wasteful private finance.
Furthermore – in fields as diverse as health, education, ports, roads, rail, communications – if a PPP fails, governments are held responsible, and they inevitably have to “pick up the pieces”.
In the worst examples government is expected to intervene so as to limit competition and guarantee a market for the private operator.
In the case of transport infrastructure this has involved the closure of roads; and has even assumed generous compensation should transport alternatives (e.g. public transport) be developed.
And the outcome of private infrastructure is similar to that of a “flat tax” – and such a burden is especially onerous for the poor and vulnerable.
The consequence of all this is an inflammation of the broader cost-of-living crisis, and greater burdens upon citizens in their capacity of tax-payers and consumers.
Setting the scene for water privatisation in Victoria
Now, consumers in Victoria are being asked to foot the bill for a massive “PPP” in the form of a desalination plant in Wonthaggi. The project has been estimated at a capital cost of $3.1 billion. Columnist, Ken Davidson, poses the question of how a “desalination plant with water costing six times the cost of dam water compete?”
The answer is simple. Even when the plant provides far more supply than there is demand, consumers will be fleeced in return for “security of supply”. One outcome of the process will be a doubling of the price of water over the next couple of years. And in the face – potentially – of dramatic over-supply: “Victorian taxpayers will be slugged about $550 million a year irrespective of whether the water is used or not.”
Alternatives, such as systematic “grey water harvesting” from showering and laundry, have been ignored, as has the option of a water pipeline from Tasmania.
Treated grey water treatment systems, in particular, can be so effective as to be suitable to wash cars, flush toilets, use in the garden, and use in washing machines.
The pipeline option, meanwhile, is estimated to cost approximately $2 billion to build, and could provide “Melbourne with 350 gigalitres of water a year”. This at a cost of about $300 million a year.
So regardless of environmental concerns, in the case of the desalination plant, the option of the Tasmanian pipeline would prove to be almost twice as cost-effective – without even considering “grey water harvesting”. And surely further subsidisation of “grey water harvesting” must remain a serious option.
Public Private Partnerhips are costing Australian tax payers and consumers billions: the consequence of inefficient private financing and bad judgment, and arguably exercises in favouritism the legitimacy of which must be called into doubt.
The cost to tax-payers and consumers for wasteful private infrastructure is palpable: and has a heavy impact on Australia’s cost-of-living crisis.
Public provision of essential infrastructure, however, in the form of natural public monopoly, can provide a cost-effective framework around which the broader economy can thrive.
Further aspects of the cost-of-living crisis: housing, wages, welfare …
For years the Howard conservative government neglected the crisis in housing affordability. If anything, policies such as the “First Home-Buyers Grant” exacerbated the crisis as the program attracted regular abuse.
Research shows that at least 300,000 Australian families are facing “severe” levels of mortgage stress, and “face a significant chance of defaulting on their home loan”. Such was the influence of the housing bubble that, even with unremarkable rates of interest, “over the past 10 years” houses became “nearly twice as expensive relative to income”.
Further studies have shown that about half the typical family’s after tax income was “swallowed up” in mortgage payments. Meanwhile in the rental market vacancy rates have hovered at around just 1 to 2 per cent.
What is worse, some families slip through the cracks, often struggling on exploitation wages, or with mental illness and/or trying to survive on welfare. For these the trauma of homelessness is a brutal reality.
There is an obvious, desperate need for expanded outreach services and public housing. But in Melbourne alone, public housing has declined to less than 4 per cent of housing stock.
With the impending global downturn, though, impetus is building for a correction in the Australian housing market. Some suggest price drops of up to 20 per cent, while others believe devaluation of about 10 per cent across Australia over the next year. Such a correction could be catastrophic for those who took out exorbitant loans without much or anything in the way of a deposit.
Australian Property Monitors (APM) General Manager, Michael McNamara recently commented that such people: “may find themselves in a situation very soon where they’re sitting on negative equity”. Despite this very real crisis confronted by investors, however, there still remains a need to expand housing supply, boost vacancy rates, and provide affordable housing for those most in need.
Immediate public investment in quality public housing – perhaps in the vicinity of $8 billion over the current term of the Rudd Labor Government – could address the homelessness crisis, and provide a structural basis for a long term correction in the housing market – including rental.
Final concerns: wages, welfare and the cost of living
Australian Bureau of Statistics (ABS) figures, drawn over the 12 months to July 2008, show that: “petrol prices increased by 8.7 per cent in the three months to June.” The price of milk rose by 12.1 per cent, cheese (up 14.2 per cent), bread (up 6.8 per cent) and poultry (up 11 per cent)”.
In the 12 months to March 2008, meanwhile, electricity rose 10.5 per cent, and bank fees went up by 7.6 per cent.
Variable interest rates of Australia’s banking oligopoly, in particular, have been rising well above official RBA (Reserve Bank of Australia) rates. The banking sector should be expected to exercise social responsibility – especially in the face of probable economic contraction.
While bank share value has declined, bank profits are still strong. In August, for example, the Commonwealth Bank registered profits of almost $4.8 billion. All in all, this raises the question as to whether the Rudd Government ought to consider the re-establishment of a public sector bank to provide real competition and counter profit-gouging and collusive practices.
Beyond this, industrial relations and minimum wages, as well as tax and welfare reform must be at the heart of any effort to respond to the cost-of-living crisis.
Overall, the wage share of the economy declined from 70.6 per cent of GDP in 1999 to 66 per cent in 2007 – representing over and above $2,000 a year.
This year the Australian Fair Pay Commission (AFPC), ruled in favour of an increase of only $21.66 a week for low-paid-workers, which does not even keep pace with inflation. The ACTU had called for a minimum wage increase of $26 a week.
But Margarita Windisch, writing for Green Left in July 2008, argued that “To cover the real cost of living increases for low-income workers, the minimum wage needed to be increased by 6 per cent, or $31 per week”.
Clearly, there is a need for wage justice especially for the low paid: and increases in the overall cost-of-living need to be met with welfare reform – not just “some time in the future” but immediately.
The compassionate and just response to inflation is not to impose wage restraint – especially for the low-paid – but rather ought to involve tax reform, increasing the relative share of burden in combating inflation for those most able to afford.
Accompanied by such tax reform, greater wage justice – and a greater wage share -should be secured for those on middle, minimum and low incomes. Enabling workers to bargain collectively must be part of this strategy – including acceptance of the legitimacy of pattern bargaining.
Complementing such strategies, Australia’s tax free threshold should be raised and means tests relaxed for those on low incomes.
Finally, in the face of the cost-of-living crisis, there is a strong case to be put that full pensions should be raised to 30 per cent of Male Average Weekly Earnings (MAWE) (up by 5 per cent of MAWE or more – to $646.16 a fortnight).
Australia’s cost-of-living crisis demands a variety of responses by government.
Some problems – such as the cost of petrol – are embedded structurally now in the world economy. Only investment in alternatives will ease demand for oil. But tax and welfare reform, and reform of industrial relations – can spread the burden more fairly.
Meanwhile, investment in public housing stock could increase supply, bringing housing back within reach of ordinary Australian families, and also for the poor and vulnerable.
A revolution in transport infrastructure, and in the adoption of hybrid and electric vehicle technology – can provide better value and efficiency even while reducing greenhouse gas emissions.
Finally, abandoning “Public Private Partnerships”, and turning to public debt financing and provision of infrastructure, can provide better value and fairness for consumers and taxpayers. This, in turn, would impact positively upon the cost-of-living.
We are not helpless in the face of the cost-of-living crisis. But times such as these demand decisive action by government. Let’s make our voices heard: it’s time for action – now.
Source: http://ezinearticles.com/?Cost-of-Living-Crisis-Revisited&id=1868036
Time to come clean on the cost of water
31 May 2010
Victorians haven't been told the full story on how much they could pay.
The Minister for Water, Tim Holding, has misled the electorate over the price of water from the Wonthaggi desalination plant, which will have the capacity to produce up to 40 per cent of Melbourne's water.
Two years ago the retail price of water was 85¢ a kilolitre when the price reflected the cost of dam water of about 40¢ a kilolitre, so that the average household paid about $800 a year for its water. Now households pay about $1000, even though they are using less under restrictions.
Tim Holding told Parliament on November 26 last year that the ''net present cost of water'' over the 30-year life of the contract with AquaSure would be $1.37 a kilolitre, which means the price of water to households after the retail mark-up would be $2.20 a kilolitre in 2012 for an annual water bill of $2000.
So, on Holding's own say-so, the price of water will double - meaning that most low-income families won't be able to maintain a garden.
But Holding (and the Brumby government) hasn't been telling the full story. The day after Holding's announcement in the lower house, Greens upper house member Greg Barber asked Treasurer John Lenders (who represents Holding in the upper house): ''I gather that the $1.37-per-kilolitre amount may just have been a mathematically derived figure. Can the Treasurer explain what it means in terms of the price of water?''
Lenders responded: ''While the question is probably more appropriate for the Minister for Water, it is certainly one that I will get an answer for him.''
And the result? Nothing! There is no record of a response in Hansard and no record of a written response to Barber, according to Barber's office.
The Coalition parties have apparently taken Holding at his word. They have shown no interest in the simple arithmetic behind the real price of water and the grossly misleading statement by Holding.
They apparently believe the wholesale price of water is $1.37 throughout the 30-year life of the contract. If so, the subsidy from the Victorian taxpayer will be billions of dollars just for the wholesale price.
The latest official estimated capital cost of the borrowings to finance the desal plant is $5.1 billion. This money has to be serviced and insured against default because, according to ASIC records, AquaSure appears to be a $12 company. Holding has said the government no longer guarantees the debt, so it must have given a ''take or pay'' guarantee to take the water.
But at what price? On the most conservative assumption, AquaSure will have to pay 10 per cent on its borrowings repayable over 30 years. This means the annual repayments on capital alone are $537 million a year, or $3.58 a kilolitre. In other words, the $1.37-a-
kilolitre payment that Holding announced to Parliament doesn't even cover the cost of capital.
But there's more. The plant will cost just over $200 million a year to run, based on paying the premium for renewable energy as specified by the government - by coincidence, similar to the $1.37 claimed as the total cost by Holding.
No wonder there has been no response to Barber's question. A meaningful answer would have revealed the actual wholesale cost of water supplied with green energy would be $4.90 - almost four times higher than Holding told Parliament. This converts to a retail price of $7.90, meaning the average household water bill will be about $3000 after the desal water is mixed with the dam water.
The only possible way the government could get the wholesale desal price down to $1.37 a kilolitre is if the government and Aquasure have made a novation agreement whereby Aquasure has inflated the capital requirement to finance a kickback to the government (via a side agreement with Melbourne Water) in order to reduce the price of water reported to Parliament for the first few years. This payment would be recouped later in the contract. To clarify this possibility, the whole contract with the numbers should be made public.
The standard claim of the Liberal Party is that it is the best party to manage the state's finances. The Greens are denigrated as environmentalists who can't add up. At least the Greens are numerate enough to smell a rat and sufficiently courageous to point out the emperor has no clothes.
There are other big issues that haven't been explained. Why was Chloe Munroe, former deputy secretary of Treasury - which approves public private partnership deals - and more recently the secretary of Holding's department responsible for water policy and water trading, appointed as chairman of AquaSure after AquaSure won the tender?
Further, Munroe is a commissioner of the National Water Commission, which advises governments including Victoria's on water trading, and more recently has been appointed to the board of Hydro Tasmania, which could sell water to Victoria more cheaply than AquaSure.
Munroe's appointments represent fundamental conflicts of interest
Ref:: http://vicvote.blogspot.com/2010/05/time-to-come-clean-on-cost-of-water.html
Victorians haven't been told the full story on how much they could pay.
The Minister for Water, Tim Holding, has misled the electorate over the price of water from the Wonthaggi desalination plant, which will have the capacity to produce up to 40 per cent of Melbourne's water.
Two years ago the retail price of water was 85¢ a kilolitre when the price reflected the cost of dam water of about 40¢ a kilolitre, so that the average household paid about $800 a year for its water. Now households pay about $1000, even though they are using less under restrictions.
Tim Holding told Parliament on November 26 last year that the ''net present cost of water'' over the 30-year life of the contract with AquaSure would be $1.37 a kilolitre, which means the price of water to households after the retail mark-up would be $2.20 a kilolitre in 2012 for an annual water bill of $2000.
So, on Holding's own say-so, the price of water will double - meaning that most low-income families won't be able to maintain a garden.
But Holding (and the Brumby government) hasn't been telling the full story. The day after Holding's announcement in the lower house, Greens upper house member Greg Barber asked Treasurer John Lenders (who represents Holding in the upper house): ''I gather that the $1.37-per-kilolitre amount may just have been a mathematically derived figure. Can the Treasurer explain what it means in terms of the price of water?''
Lenders responded: ''While the question is probably more appropriate for the Minister for Water, it is certainly one that I will get an answer for him.''
And the result? Nothing! There is no record of a response in Hansard and no record of a written response to Barber, according to Barber's office.
The Coalition parties have apparently taken Holding at his word. They have shown no interest in the simple arithmetic behind the real price of water and the grossly misleading statement by Holding.
They apparently believe the wholesale price of water is $1.37 throughout the 30-year life of the contract. If so, the subsidy from the Victorian taxpayer will be billions of dollars just for the wholesale price.
The latest official estimated capital cost of the borrowings to finance the desal plant is $5.1 billion. This money has to be serviced and insured against default because, according to ASIC records, AquaSure appears to be a $12 company. Holding has said the government no longer guarantees the debt, so it must have given a ''take or pay'' guarantee to take the water.
But at what price? On the most conservative assumption, AquaSure will have to pay 10 per cent on its borrowings repayable over 30 years. This means the annual repayments on capital alone are $537 million a year, or $3.58 a kilolitre. In other words, the $1.37-a-
kilolitre payment that Holding announced to Parliament doesn't even cover the cost of capital.
But there's more. The plant will cost just over $200 million a year to run, based on paying the premium for renewable energy as specified by the government - by coincidence, similar to the $1.37 claimed as the total cost by Holding.
No wonder there has been no response to Barber's question. A meaningful answer would have revealed the actual wholesale cost of water supplied with green energy would be $4.90 - almost four times higher than Holding told Parliament. This converts to a retail price of $7.90, meaning the average household water bill will be about $3000 after the desal water is mixed with the dam water.
The only possible way the government could get the wholesale desal price down to $1.37 a kilolitre is if the government and Aquasure have made a novation agreement whereby Aquasure has inflated the capital requirement to finance a kickback to the government (via a side agreement with Melbourne Water) in order to reduce the price of water reported to Parliament for the first few years. This payment would be recouped later in the contract. To clarify this possibility, the whole contract with the numbers should be made public.
The standard claim of the Liberal Party is that it is the best party to manage the state's finances. The Greens are denigrated as environmentalists who can't add up. At least the Greens are numerate enough to smell a rat and sufficiently courageous to point out the emperor has no clothes.
There are other big issues that haven't been explained. Why was Chloe Munroe, former deputy secretary of Treasury - which approves public private partnership deals - and more recently the secretary of Holding's department responsible for water policy and water trading, appointed as chairman of AquaSure after AquaSure won the tender?
Further, Munroe is a commissioner of the National Water Commission, which advises governments including Victoria's on water trading, and more recently has been appointed to the board of Hydro Tasmania, which could sell water to Victoria more cheaply than AquaSure.
Munroe's appointments represent fundamental conflicts of interest
Ref:: http://vicvote.blogspot.com/2010/05/time-to-come-clean-on-cost-of-water.html
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