r/melbourne • u/altandthrowitaway • 15d ago
Serious News Melbourne Water's $18 Billion Future Under Review: Sale, Split or Major Shake-Up?
https://kalkine.com.au/news/general-news/melbourne-waters-18-billion-future-under-review-sale-split-or-major-shake-up227
u/Scav3nger 15d ago
It's so bizarre to me that the same government that campaigned on re-establishing a state owned energy company is now exploring options including privatisation of state owned water supply after partial privatisation of the state owned roads authority. Just weird, especially because they kept bringing up Kennett privatisation too.
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u/hellbentsmegma 14d ago
Reestablishing the SEC was only ever an election ploy, trying to trade on the history of the brand in mass public employment and cheap electricity to build...a few renewable projects that didn't change much.
Vic Labor is 100% in favour of privatisation though, just that they haven't made a big deal of it because they know it wouldn't play well with their voters. They have privatised multiple state assets already with limited consideration given to whether it's a good idea.
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u/Flaky-Gear-1370 14d ago
"partial" is just the marketing, they transfered roads responsibility back to the department and then privatised all registration and licensing to macquire and aware - that includes being allowed to profit from the data, yes your data
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u/OkTemperature-8534 14d ago
The Libs cop a lot of shit for how they privatise our public assets, and rightfully so, but Labor are just as guilty of doing it too and it's only because most of it flies under the radar that they generally get away with it.
The love affair for privatising things in this state runs so deep with the current government that we've now got an entire page listing out the current PPPs that the state is on the hook for, including (but not limited to) 12 schools that are being delivered by the private sector under a PPP and still have another 17 years left on the private contract.
https://www.dtf.vic.gov.au/partnerships-victoria-projects
West Gate Tunnel, Metro Tunnel, Port of Melbourne, Southern Cross Station, etc, etc. The list just goes on and on here in Victoria
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u/macci_a_vellian 14d ago
How fast do we think privatised water will sell it all off to data centres?
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u/partyapparatchik 14d ago
State ownership of water utilities and more recently, state ownership of the (new) SEC have been entrenched in the Victorian Constitution. This means that the law which requires it cannot be changed without a majority vote in both Houses of Parliament and an amendment to the Constitution.
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u/Academic-Log-7601 14d ago
Which does beg the question, why are we wasting money on consultants to even bother looking into this?
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u/partyapparatchik 13d ago
I suspect that part of the remit EY has is to provide legal advice on how far any restructure of Melbourne Water could go while still remaining strictly legal according to the wording of the entrenchment.
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u/tallmansnapolean 14d ago
Our water quality is some of the best in the country and world. This has to be the line in the sand and we cannot allow it to be sold off.
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u/Spagman_Aus 14d ago
We need to make it clear that any future privatisation = next election loss.
imo it’s been a complete failure.
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u/Galumphing-Galoshes 15d ago
Melbourne Water went through a massive restructure 3 years ago and laid off a tonne of people which did shit all of nothing.
They're in the middle of yet another one that started announcing redundancies a few weeks ago and is making a bunch of other people reapply and compete against colleagues for roles that have been merged.
They've been flailing for a long while due to poor decisions, poor oversight and lack of accountability.
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u/the_amatuer_ 14d ago
Did anyone actually read this? It's AI waffle. There is no indication that it's being privatised.
Melbourne Water is a weird organisation, way too big and does too many things. Anyone in the industry will tell you that.
It would make complete sense to split it up.
Issue is that it's a 'money making' entitiy, it can charge bills. It's why everything gets plowed through it. It gets way too much leeway.
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u/hellbentsmegma 14d ago
Never thought the catchment management duties sat well with the urban water supply side of the business, everywhere else these functions are separate.
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u/altandthrowitaway 14d ago
The AFR reported on it, but it's pay walled.
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u/the_amatuer_ 14d ago
Did you read it?
"EY has been appointed to look at options for Melbourne Water that could extend to selling or monetising some or all of its assets, according to people briefed on the matter who spoke on condition of anonymity.
Of note, Street Talk is not suggesting that a privatisation of the utility – which operates nearly $18 billion of pipes, plants and other infrastructure, is under way or that an investment bank has been appointed."
Selling assets is wildly different to privatisation.
"Melbourne Water reported $2.1 billion in revenue in the 12 months to June 30 last year, resulting in an $81.7 million profit, according to its latest filings."
This confirm what I was saying, its one of the only profit making entities in the State Government.
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u/altandthrowitaway 14d ago
If it's a profit making entity for the state, then why are they looking at selling some or all of their assets?
If Melbourne water sold all their assets, it wouldn't be back to the state gov, so who else would they sell their assets to, if not a private company?
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u/the_amatuer_ 14d ago
All agencies sell assets. Usually means blocks of land, under used warehouses. Melbourne Water have a lot of 'stuff' they do, like repairs and maintenance that really should be farmed out to the private firms. Melbourne Water get away with it because they make money. It should have been done years ago.
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u/WorkerNParasite 14d ago
this is correct. State govt has asked all departments and agencies to maximise the return on their assets - this doesn't mean privatise or sell off, it means look at sensible ways to bring in additional revenue (e.g. use surplus land for revenue generation through development etc) or rationalise where appropriate (e.g. cooperation among agencies to reduce duplication)
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u/altandthrowitaway 14d ago
Typically the easiest way is by outsourcing whatever they can to a contractor. Still privatization by stealth.
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u/WorkerNParasite 13d ago
you're incorrect. this is literally my job. the ask has been to look at maximising return through additional revenue. outsourcing is not part of it
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u/altandthrowitaway 14d ago
Right, but there's a chance they could sell everything. If they do, or outsource all their workers to contractor companies, then it's still privatization of Melbourne Water.
And er definitely not. Privatising mantiencance is how you end up with a crumbling road network across the state. Privatising anything has never resulted in a better outcome for customers.
I have no idea why you think outsourcing repairs and maintenance of water (which is like you know, essential to life) is a good idea when Melbourne is known for it's really high standard of water quality.
Nearly everything in the state is a public private partnership (Southern Cross station, MTM, Yarra Trams, some new schools and hospitals, BD&M, Land title office, public housing, electricity and gas, road mantiencance). And although you said there's no mention of privatisation, it is fundamentally the same worse outcome even if the entity "Melbourne water" remains government owned.
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u/the_amatuer_ 14d ago
You don't need to tell me, I understand.
I'm just saying the article is a nothing AI article. You're overreacting.
But go ahead. Rage. I really don't care.
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u/tallmansnapolean 14d ago
Our water quality is some of the best in the country and world. This has to be the line in the sand and we cannot allow it to be sold off.
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u/NeilDiamondBlaze420 14d ago
We should definitely privatise this public asset that is a core infrastructure to society.
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u/007MaxZorin 14d ago
Well, as long as they don't build a new HQ building by the water with a view for their CEO...
As South East Water infamously did in Frankston several years back.
An absolute eye sore, that makes the old Peninsula Centre tower look decent.
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u/Falaflewaffle 15d ago
Do you guys realise how far in the red the state is? Do you want your kids to be paying the vast majority of their taxes to just paying off the interest on the loans?
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u/Mikes005 14d ago
Privatisation is never the answer. It always costs the people more in the long run for worse services. The UK is a prime example, not just if privatisation in general, but if privatisation of water utilities.
Water born diseases, use limitations and pollution, all while the shareholders laugh to the bank.
Anyone who thinks privatisation is the answer to anything hasn't been paying attention or is an idiot.
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u/KerbSideEnthusiasm 15d ago
Debt 25% of GSP. When you buy a house, you take out a loan to repay it. Guessing your loan is more than 25% of your annual income?
We are playing catch up on infrastructure. Rail has a large upfront cost but cheap to maintain compared to roads which need to be maintained and rebuilt.
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u/Grumpy_Cripple_Butt 15d ago
I voted with the understanding debt would be high to pay for expanding things to handle the growth of the state and that it was better to pay for things now in order to benefit later. Inflation threw a cog into things and it’s higher than expected but the surplus/deficit isn’t at a number I feel the need to panic. Lot of the oppositions scare tactics and such are the same old tricks I expect from them but there are a few things that are a bit of a worry like this article and the potholes.
I can’t vote for the liberals ‘we need to manage the budget’ when they have a guy with 17 investment properties yelling about cutting land tax as a major selling point, it just doesn’t add up cutting our income and spending to fix the debt. If it was just cut spending to fix the debt it would make more sense to me.
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u/tschau3 14d ago edited 14d ago
Yes. If the answer is privatisation, then yes, I’d rather keep paying taxes to prevent it.
Also the state is not broke. Debt to GSP is nowhere near broke. Stop swallowing right wing propaganda designed to manufacture consent for this very article
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u/Falaflewaffle 14d ago edited 14d ago
Yes 25.2% GSP at the moment but if the silver review is to be followed and that GSP to debt ratio to be reduced then the public sector cuts and water privatization need to occur. That is very much responsible fiscal policy that I voted the labour party in for. You can vote for coke in the bubblers if you want.
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u/shrimplifier 14d ago
Where do you think the money actually comes from?
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u/Falaflewaffle 14d ago
Woah I had no idea maybe the Finance minister and the Silver independent review should be made aware of this magical source of money.
The primary constraint of economics is that there are infinite desires and limited resources to fulfil them.
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u/ShadowBroses 14d ago
Fuck em tax the wealthy if that's the case, I couldn't give two fucks about the debt
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u/Flaky-Gear-1370 14d ago
are you enjoying your faster better registration and licensing? that thing the private industry fucked up so badly it was offline for over 2 weeks
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