A regional view of urban waste.

How regional Queenslanders are subsidising the cost of SEQ water incompetence.
 
A recent article in the Australian has pointed out that the full dams in South East Queensland now hold enough water to last until 2018 even if not a single drop of extra water falls until then. This means that none of the $9 billion spent on their water grid will be needed for at least a decade. And all this just as the Desalination plant has been handed over so it can supply its pathetic 44 megalitres a day that no-one needs.
But once again, the urban media just skims the surface of the issue without getting close to what is actually going on. The real story is the same old story, of urban indulgence, subsidised by regional folk who get to share the costs for something they were never going to benefit from.
 
At 44 megalitres a day, the desalination plant will only produce 16,000 ML a year. That is only 2/3rds of the 24,000 ML that went over the Wivenhoe spillway yesterday (11/10/10). Meanwhile, the 5% interest bill on the wasted $9 billion worth of (titter, titter) drought proofing (muuuaaahhaahaa) is $450 million a year or $1.23 million today, tomorrow and every other day. Add the $32,000 for useless desal water then divide this by the 664 megalitres SEQ actually uses each day and the interest bill alone adds $1,905 to the cost of each megalitre or $1.90 to each kilolitre. The current price paid by SEQ residents is only $1.84/KL which, in theory, covers the cost of all the existing infrastructure. This is damning evidence, if you’ll pardon the pun, that 1.5 million regional Queenslanders are subsidising the SEQ water incompetence by at least 1/3rd of the interest bill, or $150 million a year. That is $100 a year each.
 
And at an average of 2.7 people per household, it would cover the payments on a 22,000 litre water tank. In the remote indigenous communities that cram 8 or more people to a house while they wait for their public housing to arrive, it would cover the payments on 3 tanks. But of course, most regional folk already have a water tank but there are plenty of other uses they could spend their own share of state revenue on.
 
To put that another way, the 750,000 North Queenslander’s 17% share of the $9 billion debt is $1.53 billion. It might not buy much in the way of urban road tunnels but it would sure buy some impressive improvements to the Pacific Highway between Mackay and Cairns. And as far as Deputy Premier, and Health Minister, Paul Lucas’ sneering question of how a new state could possibly afford a decent hospital, he need look no further than the cost of his own mistakes.
 
Infact, North Queensland’s 17% share of the $450 million a year interest bill is $76.5 million. It would cover more than half of the duplicated head office costs of their new State government. And that is before the economic benefits to the regional economy are even included. North Qld’s 17% share of the $213 million of existing state government overheads is $36 million. And when this is added to the $76.5 million in interest they should not be paying we get $112m of the $213m covered before the (3.5 times) economic multiplier even kicks in.
See “The Myth of New State Duplication Costs” on this blog.
 
And this is all before we take a good hard look at who is paying the $865 million interest bill on the $17.3 billion worth of tunnel and bridge infrastructure that is also underway in SEQ at present. There is no evidence of a commensurate $8.6 billion being spent on regional Qld infrastructure. And the record to date on tunnels makes it clear that the SEQ motorists are definitely not covering anywhere near the total costs as well. So the shortfalls are obviously being covered by consolidated revenue. North Queensland’s 17% share of the total interest bill on these projects would be $147 million a year but their actual share of the portion covered by consolidated revenue would be less. At least the second Gateway Bridge pays most of its way so for the time being the actual subsidy on these projects by regional Queenslanders remains unknown. 
 
What we can say with absolute certainty is that North Queenslanders, and Central and South Western Queenslanders for that matter, would have the duplicated cost of their own Regional State Governments fully covered by funds they are already paying to subsidise SEQ infrastructure and waste. And the suggestions that they might not survive without SEQ benevolence is sounding a lot like the deliberate undermining of a battered regional self esteem by a serial metrocentric abuser.
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About regionalstates

A site for informed discussion on the strengths, weaknesses, risks and opportunities to be gained for regional Australians through the formation of new states within the commonwealth.
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3 Responses to A regional view of urban waste.

  1. New England State Campaigner says:

    This financial analysis puts the lie to the economic argument proposed by the “no changers”.

    Why is this financial waste created? Because supplying infrastructure to overcrowded cities is inefficient in a country having wide open spaces allowing pollution free living.

    When you add our proposal to 1,500 government jobs decentralised to regional urban centres then the growing economic strength of those regional urban centres becomes obvious.

    So, we need a conversation about the economic opportunities created by devolving democratic power by further decentralising government to regional urban centres rather than a Federal referendum about the 19th century solution misnamed “local government”.

    • Ian Mott says:

      I agree, Campaigner. In fact, the Commonwealth Grants Commission has concluded that the “minimum administrative structure” or head office of a new state government would involve about 2,000 new jobs and as their salaries circulate through the regional economy the generally accepted 3.5 times, they will add another 7,000 more local jobs. And as the workforce is 50% of the population, it would shift an initial 18,000 people from the existing metropolitan areas. And that is before the new state’s own regional development policies even kick in.

  2. Ian Mott says:

    A revised and updated version of this article was published at Quadrant Online (19/10/2010) http://www.quadrant.org.au/blogs/doomed-planet/2010/10/you-waste-we-pay

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