Farmers lose 15 per cent water discount and hit with phantom project fees

Queensland irrigators face soaring water costs, scrapped discounts and hidden charges as costs associated with a failed $38 million IT project is quietly dumped onto farmers’ bills.

The state government accepted the Queensland Competition Authority’s recommendations for SunWater irrigation water pricing from July 1, 2025, locking in new charges for the next two years.

Queensland’s irrigation sector is facing a major financial shake-up after the state government confirmed farmers will bear $18.5 million of the costs of an abandoned IT project, while also losing longstanding water price discounts and facing steep price hikes in some regions.

In its final decision this week, the state government accepted the Queensland Competition Authority’s recommendations for SunWater irrigation water pricing from July 1, 2025, locking in new charges for the next two years.

Hidden in the fine print is confirmation that $18.5 million in costs from the failed Customer and Stakeholder Project, known as CASPr, a billing and delivery system that was never completed, will be included in irrigators’ water charges.

Originally budgeted at less than $1 million, the CASPr system ballooned to $38.6 million before being sidelined, but farmers are still being charged for a portion of the project’s sunk costs.

The state government accepted the Queensland Competition Authority’s recommendations for SunWater irrigation water pricing from July 1, 2025, locking in new charges for the next two years.

The QCA found the CASPr project inefficient, citing weaknesses in management aspects such as options assessment, budgeting, procurement, and governance.

“It’s unacceptable that irrigators are being asked to pay for a phantom system that provides no service and no benefit,” one furious farming representative said. “This is cost recovery gone mad.”

But CASPr is only part of the mounting cost pressures for SunWater growers.

Farmers across Queensland are also set to lose automatic access to a 15 per cent irrigation water discount that has applied to all SunWater and Seqwater customers since 2021.

From July 2025, the 15 per cent irrigation water discount, which has automatically applied to all SunWater and Seqwater customers since 2021, will no longer automatically apply to all customers.

Only certified small or family-owned farm businesses that can prove their primary income comes from agriculture will remain eligible.

Large corporate growers and those failing certification will pay full price, compounding the blow for many operations already struggling with high electricity, fertiliser, and insurance costs.

“These costs are hitting at the worst possible time and the CASPr charge adds insult to injury,” said one regional customer.

“We’re paying for a system that was never turned on, never finished and now they’re tightening the discounts as well.”

These hits come on top of region-specific price rises sparked by the QCA’s broader review of water distributor Sunwater’s pricing model.

In the Burdekin-Haughton scheme, bulk water prices are set to increase by 38.1 per cent in 2025-26, while the Nogoa-Mackenzie scheme will see a 36 per cent rise.

Emerald’s Nogoa-Mackenzie scheme will see a 36 per cent jump.

The price increases are part of a government push to make irrigation costs fully “cost-reflective” reducing reliance on taxpayer subsidies.

Of Sunwater’s 44 tariff groups, 13 will reach this target immediately, with the rest phased in over four years.

Even with the QCA’s reduction of Sunwater’s proposed costs by $40.8 million, many farmers will still face steep new charges.

Burdekin irrigator and BRIA Irrigators chair Mario Barbagallo has said in the past that his members accepted the need for cost recovery but were deeply concerned about wasteful expenses.

Mr Barbagalo has said previously that his bulk water price would go up 40 per cent in 2025-26, a huge jump for irrigators, many of whom have just come through a flood.

He has also said in the past that if the prices were efficient and fair the farmers would not need government subsidies.

“It is financially impractical and ultimately burdensome for farmers and irrigators, who fear the high costs associated with the new billing infrastructure will be passed on through increased water charges,” he said.

“SunWater said it can’t install the system for $18.5m as suggested by the QCA – but that’s ridiculous and would never happen in the real world.

“This government body is building a Rolls Royce system when all we need is a Commodore.”

Adding to frustrations is Sunwater’s ongoing recruitment drive, expanding its workforce and corporate and regional staff, despite the QCA’s recommendations to rein in costs.

Queensland Farmers Federation CEO Jo Sheppard has warned in the past that overall price rises of more than 60 per cent across the four-year period would be unsustainable for many.

Queensland Farmers Federation CEO Jo Sheppard has warned in the past that overall price rises of more than 60 per cent across the four-year period would be unsustainable for many operations.

The government is urging irrigators to check their eligibility for the 15 per cent discount before the July 1 deadline to avoid higher bills.

No government statement has been made over the CASPr costs but Water Minister Ann Leahy pledged in February to review the CASPr project’s cost blowout and Sunwater’s management practices.

The next pricing review is expected to consider a shift to a regulated asset base (RAB) model for the post-2027 period.

Originally published as Farmers lose 15 per cent water discount and hit with phantom project fees