The AFR has started an overdue debate with Terry Dwyer's article ("Conspiracy of silence over water charges").
Like many natural products with a more-or-less fixed supply, water's worth has increased as its usage has risen.
Its availability has also been affected by the notion that has come to be called "the environmental Kuznets curve" -- rising income levels bring even greater increases in the demand for a reduced environmental use. However this notion is massively exaggerated by a noisy environmental lobby that would prefer lower living standards to resource use.
Although sometimes referred to as the driest continent, Australia ranks behind only Iceland and Russia in terms of the amount of rainfall per capita. About five per cent of the water that falls on Australia is diverted for human usage with irrigation accounting for over 70 per cent of this. Irrigated agriculture, comprising less than one half a percent of Australia's agricultural land, has come to account for some 30 per cent of agricultural output.
Irrigation water in the south east of Australia normally trades at around 10 cents per kilolitre. This compares with the 80 cents that urban water businesses charge for domestic supply. In principle, transport charges are billed seperately, but some may need to be factored into the supply charge -- not at cost of construction as Dwyer implies but at replacement cost. In spite of the large capital costs of new dams, this still means urban household's water at less than $1 dollar a kilolitre, less than that in Melbourne.
Nobody would guess this from the government disinformation campaigns that use taxpayers money to promote demand side savings. In fact, any water scarcity that we may be experiencing is not due to a natural shortage but is actually created by government regulatory refusals.
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