Some government departments can have their cake and eat it too! 

Good business models look for efficiencies and adding value for customers - especially their best customers - as part of best business practice.

However, government sectors are paid regardless of whether they deliver a product or provide services.

Irrigators understand that they must pay charges to help upkeep the delivery systems.

Those systems are designed to deliver water. 

Payment shares are calculated by Water Entitlement or licence and not necessarily on the actual water (the actual wet stuff) that’s delivered to producers’ farm gates.

The largest water holding entities in our storage and regulatory systems are government entities, including South Australia and Vic.

Governments manage the rules and regulations as well as owning water. Much of that water was taken rather than bought. 

They’re not necessarily paying the way producers must pay. Water for translucent, transparent and dilution flows are one example but there are many others.

General Security (GS) licence holdings are the bulk of productive water licences.

The state government’s Water Sharing Plans (WSPs) have placed GS licences on the bottom of the priority ladder even though GS customers pay the lion’s share of compulsory charges. 

Other classifications of water are usually guaranteed most of their allocation in most years. However, according to the latest modelling by the Murray Darling Basin Authority (MDBA) and Department of Primary Industries Water (DPI Water), GS will rarely achieve allocations above 65 per cent.

Water NSW want to boost compulsory fees to 80 per cent regardless of whether the water is delivered or not. Presently the ratio is 40 per cent fixed and 60 per cent variable.

The variable is actual watered delivered.

This basically means they want to double the financial risk of non-delivery to their GS customers (from 40 per cent to 80 per cent) and cut their own risk by two thirds.

Principally they want to be paid for a delivery system, even when they’re aware it regularly won’t deliver.

This removes financial incentive to deliver the actual product, water, to their largest bulk water paying customers.

This would be like the supermarket charging you full price for your groceries but making you go home with many empty bags.

There is clearly something very wrong with these type of bureaucratic ‘cost recovery’ expectations. 

The water delivery systems are a customer service, not the other way around.

They’re designed to deliver a very important product to the paying customer.