ALTERNATIVE APPROACH TO WATER LICENCE FEES
 

Warren Water Management Area Advisory Committee

 Position Statement: WATER LICENCE ADMINISTRATION FEES
(adopted 21 February 2007, prior to Ministers 27 February 2007 announcement of new fees) 

Background: The Department of Water in the Blueprint for Water Reform 2006 proposes water licence administration charges of $180 to $1720 annually for Warren Area landholders to use water from their privately funded and constructed dams. The funds are intended to fully recover the cost of the Department’s licensing administration activities “for assessment of applications and licence renewals, checking compliance with licence conditions, maintaining licensing databases, appeals and community awareness.” (Blueprint page 34), costs of which for 2005-2006 were $5.8 million (Blueprint page 35). This is an unusually wide scope for ‘user pays’ cost recovery; the cost of checking compliance (or regulation), appeals and community awareness should not be included in cost recovery as they are not directly related to licensing service provision to licensees. It is difficult to see how these costs are derived when the 2006-07 Budget papers for Appropriations and Forward Estimates state the 2005 -2006 budget appropriation for ‘Water licensing and regulation’ was $18.645 million and for 2006-2007 is $21.544 million. Even at the higher estimates of licensing costs, the 2006-07 Budget papers state, as a Key Efficiency Indicator, the “Average cost per gigalitre of water licensed” is $6164; if this is the actual cost of services then administration charges should be $6.16 per megalitre. The proposed charges, in many instances, are more the $6.16 per megalitre total cost of water licensing and regulation. The level of the proposed licence fees in the Blueprint for Water Reform are related to the volume of water licensed as if there is a water ‘user pays’ principle applying. While the cost of assessment of license applications may vary depending on whether a dam-related licence was for 5 megalitres or 50 megalitres, the computerised administrative cost of a licence record and renewal wouldn’t vary depending on licensed volume. It is reasonable there be some charge for water licence application assessment, recording and renewal administrative services. However, the charge for the initial assessment of a licence application should be related to the water volume of the licence sought (noting total cost of $6.16 per megalitre of water administered), whereas the licence issue and renewal fee should be a ‘flat’ fee related to the cost of a computerised licensing database.  An appropriate benchmark cost for recording and renewal of a licence in WA would be that for a Drivers licence, which is $111 for 5 years licence duration. 

Proposed Water Licence Administration Fees:  

  1. Application – a fee should apply for an application for a ‘Licence to Take Water’ based on the volume of the water licence sought. For indicative purposes, considering the approximately $6 per megalitre total cost of licensing and regulation services, the application fee could be in the order of $3 a megalitre. However, this fee could be less if applications were made ‘online’ via the Internet rather than by use of paper forms. The Department of Water should introduce ‘online’ applications for licenses and permits as an efficient optional alternative to paper form based applications.
  2. Licence – the fee should be based on the cost of recording and holding the licence information in a database. The fee for a 10 year licence should be paid in advance on issue of the licence. Based on the Drivers licence benchmark, the fee should be $222 for 10 years. If the Department of Water applies a fee to existing/current licenses, the fee would be related to the duration of the balance of the 10 year licence. Licence holders should have the opportunity to make an application for renewal of the licence ‘online’ and pay the $222 renewal fee ‘online’. The $421,800 annual fees from 19,000 water licences in WA would be more than sufficient to develop and maintain a web server licensing database. If a component of the Department of Water’s proposal for annual licence payments is to obtain returns from licence holders on use of water, that could be addressed using the same ‘online’ database, with returns required by 30 June. Licence holders wishing to make a paper form based annual return of water use could pay an additional fee for processing of paper forms to the database.
  3. Compliance – the cost of enforcing compliance with water licenses should be met by Consolidated Revenue, as are regulatory activities for employment and workplace safety standards, road transport safety, environmental pollution and many other laws impacting on business that are administered by the State Government. Penalties for breaches of the Rights in Water and Irrigation Act 1914 and water licence conditions should in part contribute to recovery of compliance costs.
  4. Appeals – appeals against decisions of the Department of Water are required to be dealt with by the State Administrative Tribunal in accordance with their schedule of fees for appellants. The Department of Water should not expect all water licence applicants or holders to meet the cost of the Department’s response to appeals against the Department’s decisions.
  5. Community Awareness – promotional campaigns and information programs should not be included in fee structures imposed on water licence holders. Promotional expenditures are discretionary by Government and are sometimes political in nature promoting the ‘Government of the day’. Provision of key information on the State’s resources and administrative processes is a ‘core’ role for Government and should be funded from Consolidated Revenue.

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