Sydney Residents Brace for 50% Increase in Water Charges Amid Cost of Living Crisis

Sydney residents are bracing for a 50% increase in water bills over the next five years as Sydney Water addresses challenges related to the city’s rapidly growing population. This rise could mean hundreds of dollars more per household annually.

The state-owned water supplier has proposed an 18% hike in rates for the upcoming financial year, followed by annual increases of 6.8% plus inflation. This adjustment aims to generate over $26 billion for upgrading and maintaining infrastructure, with $16.6 billion dedicated to improvements and $10 billion for operating expenses.

The planned operating expenses over the next five years are considered crucial for maintaining safe and reliable water, wastewater, and stormwater services. This proposed spending is deemed the minimum required to ensure essential services both now and in the future.

Projected Sydney Water Bill Increases as Part of Long-Term Investment Strategy

In its 10-year investment forecast, the organisation reviewed multiple scenarios and concluded that a balanced approach of $32 billion will help minimise costs for customers while improving resilience and adaptability in a complex environment.

The report forecasts an average water bill increase of about $226 in the first year, with subsequent annual increases of approximately $111 until 2029-30. 

An average water bill of $1,308 is projected to rise to $2,037 by the 2029-30 financial year.

This information is part of a comprehensive 546-page submission to the Independent Pricing and Regulatory Tribunal (IPART).

Sydney Water’s report indicates that maintaining the current level of spending would allow them to keep the existing risk level, but this would result in very high asset risk, substantial reactive operational costs, and ongoing non-compliance issues.

On the other hand, operating assets at high risk would only keep them just within compliance limits.

The report concludes, going forward, “trying to maintain the historic level of renewal investment is no longer sustainable”

Rising Utility Costs Compound Financial Pressures on Sydney Families

According to The Australian Energy Regulator (AER) reference price , the average monthly electricity bill for a typical household as of April 2024 was around $165 ($1,979 per year).

These increases will place additional strain on Sydney families already facing a cost-of-living crisis, compounded by rising prices for other utilities, including energy.

In a letter released by the government, Premier Chris Minns urged the chair of the Independent Pricing and Regulatory Tribunal (IPART) in August to take into account “the cost-of-living impacts of the price determinations” as well as the effectiveness of rebates designed to mitigate the social effects of price increases.

“The Government understands that Sydney Water and Hunter Water will lodge their submissions shortly, which may propose increases to their customers’ bills. NSW Households are currently experiencing increasing costs of living pressures, including rising housing and utility expenses.”

Minns requested that IPART explore options for adjusting project timelines during the price determination period and over the next ten years to minimise price impacts.

Sydney Water acknowledged the financial strain of rising living costs on customers and committed to supporting individuals through payment assistance programs and rebates.

The organisation also noted the need to raise funds to support growth in an area comparable to the size of Canberra.

If New South Wales meets its housing targets, an additional 300,000 dwellings will require water infrastructure by 2029, resulting in a demand of 50,000 kilometres of new pipes.Submissions on the issue are open until Monday, December 9, with a more comprehensive draft report expected by March, as reported by The Herald.

The proposed increases are set to take effect in June next year.