Queensland water sector posts profits boost after 2011 flood payout $80m lower

Queensland’s water sector has posted an unexpected boost in profits as the payout to victims of the 2011 flood class action came in at $80 million lower than expected.

Previously, Sunwater recognised a liability and expense of $330 million on its books.

In 2011 Brisbane suffered its worst flood in nearly 40 years. Credit: [e-mail]

But a report from the Queensland Audit Office, released on Wednesday, has revealed the actual settlement was $80 million lower than estimated in 2019-20.

That contributed to the combined water sector’s profits increasing by $234 million, up almost 107 per cent on the previous year.

The Audit Office said the “largest impact” on the water sector’s profits boost was an adjustment to Sunwater’s profits in relation to the 2011 south-east Queensland floods class action.

The more positive outlook comes after the Audit Office in January warned the water sector was hit by an almost 50 per cent drop in profits following the class action decision.

But even that profit prediction was “higher than they should be” because Seqwater had not recognised its share of the expenses associated with the class action.

In February 2021, Sunwater and the Queensland government agreed to pay $440 million as part of the class action.

However, Seqwater successfully appealed against the court judgment in September 2021, which means it is no longer liable to pay damages.

The law firm that represented flood victims, Maurice Blackburn, has lodged an application for a High Court appeal of the NSW court’s decision.

It comes amid warnings water bills will rise for people living in south-east Queensland due to drought.

Urban Utilities chief executive officer Louise Dudley said bulk water fees made up about 40 per cent of the average water bill and were increasing at costs higher than inflation.

“The likely impact of drought during the coming periods will further escalate these costs,” she said.

Meanwhile, it was revealed that hackers orchestrated a cyber breach at an unnamed Queensland water entity, which remained undetected for nine months.

Between August 2020 and May 2021, there was unauthorised access to an entity’s web server after threat actors targeted an older and more vulnerable version of the system.

The web server that stored customer information contained suspicious files that increased visitor traffic to an online video platform, but it did not result in lost customer or financial information.

The Audit Office said the entity had since updated software, used stronger passwords, and monitored incoming and outgoing network traffic.