THE NSW Government has been accused of using Hunter Water as a “cash cow” and a “government ATM” after attempting to take an additional $100 million in dividends from the water corporation less than a year after quickly retreating when an earlier attempt was made public.
Hunter Water outlined the dividend plan in its 2018-19 Statement of Corporate Intent which was quietly tabled in NSW Parliament on November 23 but is not available on its website.
NSW Treasurer Dominic Perrotet, Finance Minister Victor Dominello, Hunter Water chair Terry Lawler and managing director Jim Bentley signed off on the proposal despite an outcry in July, 2018 after the first attempt to take an additional $100 million from Hunter Water as a dividend was abandoned when it was made public. The NSW Government did not explain why it sought the additional dividend.
The 2018-19 Statement of Corporate Intent is also silent on why Hunter Water should pay an extra $100 million as a dividend to the NSW Government in 2019 in addition to $44 million, which represents the standard annual dividend payable of 70 per cent of after tax profits.
The water authority will have to borrow the $100 million from NSW Treasury Corporation, or TCorp, with the loan added to outstanding Hunter Water borrowings of nearly $1.1 billion.
Shadow minister for water Chris Minns said the NSW Government was “gouging” remaining utilities for funds because of the huge sums lost because of electricity privatisation, and Sydney transport project budget blowouts.
“What we’re seeing here is the inevitable consequence of electricity privatisation. When the government privatised these utilities it forewent the profits. The Opposition said at the time that all remaining utilities would be gouged to make up for the large stream of money that was lost and it’s a prophecy that’s proved to be correct,” Mr Minns said.
“They’re gouging all these water companies and using them as the government’s ATM.
“The government was caught red-handed last year and they promised they wouldn’t do it again, but they’ve done it again. This is a backdoor tax on the people of the Hunter.”
Mr Minns accused the government of “burying the incriminating documents in the dead of night” after the Statement of Corporate Intent was tabled by the clerk of NSW Parliament on November 23 and formally “published” for the public, but without being included in documents available on Hunter Water’s website.
“This isn’t money going on infrastructure for the Hunter. It’s being sent to Sydney. It’s a big Sydney swipe,” Mr Minns said.
Port Stephens MP Kate Washington slammed the need for Hunter Water to borrow the money because it was more than the profit it expected to make in 2018-19.
“The Berejiklian Government is loading up Hunter Water with debt and making Hunter people pay more for water, to pay for Sydney infrastructure blowouts,” Ms Washington said.
“Yet again we’re seeing the Hunter being used as a cash cow for Sydney projects.”
Ms Washington said she feared the additional debt load was part of a NSW Government plan towards privatising Hunter Water by “making it look like it’s not capable of managing itself”.
“Hunter Water does a terrific job serving our community. It does not need the Berejiklian Government crippling it with debt,” she said.
A Hunter Water spokesperson said the 2018-19 dividend payment of $144.9 million, including the additional $100 million, was “in accordance with NSW Treasury’s dividend policy”.
“The dividend does not affect Hunter Water’s prices, capital investment or service standards.”
Hunter Water was the first government-owned enterprise proclaimed in Australia in 1992.
In its recently-released annual report the water corporation said it was “investing considerable time and effort to engage with our customers and community to gain input and support for the decisions we make”.
A spokesperson for Mr Perrottet said the additional dividend would have no impact on prices.
“Water prices have remained stable for the past five years and there will be no impact on prices, on services or upon capital investment in Hunter Water from changes to its capital structure,” the spokesperson said.
“Hunter Water has the second lowest prices of any major Australian water utility. Dividends from state owned corporations contribute to the funding of critical services across NSW including health, education, law enforcement and public transport and roads.”