HOPPER JUMPS TO WRONG CONCLUSIONS YET AGAIN – THIS TIME WITH SUNWATER PROFIT CLAIMS

The accident-prone Opposition spokesman for Natural Resources and Water, Ray Hopper, has again got it wrong – this time with claims that SunWater’s $28.2 million profit for 2006/07 comes at the expense of Queensland irrigators.

Natural Resources and Water Minister Craig Wallace said today that SunWater’s annual report showed about half the organisation’s profit came from a tax ruling in SunWater’s favour after it acquired Burnett Water Pty Ltd.

The net impact on the operating result in 2006-07 was a credit to income tax equivalents income of $13.6m.

SunWater said the other half came from supplying high priority water to industry and from engineering consulting.

Mr Wallace said Mr Hopper’s latest claims about SunWater profiteering clearly highlighted how little he understood his shadow portfolio.

“In fact SunWater’s agreed irrigation pricing policy does not allow for prices to be increased to make a profit.”

“If Mr Hopper took the time to read SunWater’s Annual Report, then he would be aware that most of SunWater’s irrigation schemes are in drought and this means they have run at a loss.

“These schemes are clearly not profit centres as he has inferred,” Mr Wallace said.

“Time and time again, he does not check his facts when they can be very easily verified,” he said.

“Mr Hopper’s false claims has simply misled irrigators, who are doing it very tough in the worst drought on record.”

Mr Wallace said SunWater had also stated 65% of its revenue last year came from its increased business with external consultancy services, major infrastructure projects and water delivery to industrial clients. (Refer to Graph 1 following.)

He said the public also was being mislead by Mr Hopper‘s claim that Queensland irrigators were paying for water they were not getting.

SunWater has said that irrigators do not pay for water if they are not getting it.

However, SunWater’s customers do have to pay Part A charges to maintain storages, pumps, channels and pipes, which must be kept in good repair for when water becomes available again.

Like SunWater, all major service providers charge for the infrastructure needed to deliver their service, either directly or indirectly.

Irrigators negotiated how and when Part A charges are to be paid with SunWater.

They know that Part A charges are for infrastructure, not for water.

“I have urged any Queensland irrigator who was paying for water they were not getting to contact my office so we could investigate it, but upon investigation it appeared that the charges were for the Part A component of their bills,” Mr Wallace said.

He said claims by Mr Hopper that SunWater was profiting from Part A charges paid by St George irrigators again were wrong.

“I am informed by SunWater that only the ongoing costs of infrastructure are recovered – and that no profit is made,” Mr Wallace said.

“I also am told that irrigators are not charged for the original costs of the infrastructure – which is an excellent deal by any business standard.”

In the instance of the St George Water Supply Scheme, SunWater currently is making a loss on Part A charges because water availability is so low.

Mr Wallace said irrigators deserved to know the facts about SunWater charges not politically-inspired nonsense.

“With factually-challenged friends like Mr Hopper, Queensland irrigators do not need enemies,” he said.

Electronic version of graph available on request.

Media inquiries: Paul Childs, Craig Wallace’s office, on 0407 131 654.