Nicholas Pawsey

The Mystique of Water Pricing and Accounting

This article considers the pricing and accounting conventions of government-controlled water entities in the state of Victoria, Australia. These conventions are guided by principles of cost-reflective pricing, public sector accountability and comparability of private and public sector performance. We observe how Victorian water entity prices and their reported performance are shaped by government accounting policy discretion, and the result of various compromises between economic and political considerations. By bringing these issues to light, we hope to keep political decision-making about water infrastructure and water pricing in check.

Water Pricing in Australia: Unbundled Politics, Accounting, and Water Pricing

This chapter presents a review of water-pricing arrangements in each of Australia’s state jurisdictions. The pricing approaches for urban, environmental, and rural (i.e., agricultural) water uses are scrutinized and compared against the ambitions established as part of the National Water Initiative (NWI). While the framework for water pricing in the NWI has been generally deployed in most states, local nuances give rise to quite different price outcomes. Moreover, there is still opportunity for political influences to shape water prices, even though the NWI is committed to full-cost recovery with regulatory oversight that seeks to objectively align costs and prices. We conclude that there remains scope for improvement that would remove artificial differences in the way water is priced for different water users and thus support the distribution of water to its highest values.

A Note on Contradictions in Australian Water Policy

The success of Australias water markets is now well documented and confirms the hypothesised usefulness of water markets as a policy tool, at least in the context of places like the Murray–Darling Basin. In this article, we reflect on the theoretical benefits of water markets as a point of reference against which to scrutinise the current penchant of government to subsidise irrigation infrastructure in efforts to address over-allocation. We conclude that this approach results in a serious contradiction, unless there are grounds for believing that government has insights into the dynamic efficiency of the irrigation industry that exceed the coordination power of the market.

Rationality, accounting and benchmarking water businesses: An analysis of measurement challenges

Purpose The purpose of this paper is to explore the sensitivity of economic efficiency rankings of water businesses to the choice of alternative physical and accounting capital input measures. Design/methodology/approach Data envelopment analysis (DEA) was used to compute efficiency rankings for government-owned water businesses from the state of Victoria, Australia, over the period 2005/2006 through 2012/2013. Differences between DEA models when capital inputs were measured using either: statutory accounting values (historic cost and fair value), physical measures, or regulatory accounting values, were scrutinised. Findings Depending on the choice of capital input, significant variation in efficiency scores and the ranking of the top (worst) performing firms was observed. Research limitations/implications Future research may explore the generalisability of findings to a wider sample of water utilities globally. Future work can also consider the most reliable treatment of capital inputs in efficiency analysis. Practical implications Regulators should be cautious when using economic efficiency data in benchmarking exercises. A consistent approach to account for the capital stock is needed in the determination of price caps and designing incentives for poor performers. Originality/value DEA has been widely used to explore the role of ownership structure, firm size and regulation on water utility efficiency. This is the first study of its kind to explore the sensitivity of DEA to alternative physical and accounting capital input measures. This research also improves the conventional performance measurement in water utilities by using a bootstrap procedure to address the deterministic nature of the DEA approach.

IFRS adoption: A costly change that keeps on costing

Abstract This paper documents the results of a study exploring the transitionary and ongoing costs incurred by Australian companies from their use of IFRS. A longitudinal survey approach was adopted. Challenging the underlying logic of convergence, survey results highlighted that IFRS is costly for firms both in the lead up to adoption and thereafter. Specifically, the transition to IFRS imposed significant AIS, staff training and development, financial statement user education, and financial statement adjustment costs on many firms. Furthermore, many firms perceived that IFRS adoption has resulted in an ongoing increase of 20% or more on annual accounting and compliance costs.

Water Management Accounting and the Wine Supply Chain: Empirical Evidence from Australia

Given the scale of water consumption for agricultural purposes and geographic and temporal variance in water availability, the sustainability of water use represents an important research topic. Ac...

Use of facebook to engage water customers: A comprehensive study of current U.K. and Australian practices and trends

Given regulatory developments, it is imperative that water businesses implement effective customer engagement strategies. Among other options, Facebook offers enormous potential given the ability to connect with customers, involve customers in the co-creation of content, obtain real-time feedback on customer preferences and promote water conversation behaviours. This paper examines how effectively 20 large Australian and U.K. water businesses are using Facebook to engage customers. It also identifies how these firms can improve Facebook engagement by optimising posts type, timing, content, frequency and other factors. The total sample included more than 300,000 responses to nearly 17,000 posts between 2010 and 2017. Rapid growth in the utilisation of Facebook by water businesses was observed given the number of posts and customers engaging with this content. The results of the analysis of popular posts identified innovative ways some water businesses are using Facebook posts to promote the health benefits of tap water consumption, water conservation behaviours and responsible wastewater practices. Despite the trends, most firms still make less than one post per day and of those customers who have engaged, most have done with a single response. Further analysis revealed that few posts, and only a relatively small number of customer comments, pertained to water pricing matters. To promote engagement, water businesses must improve post regularity, the degree to which they moderate Facebook discussion, the utilisation of videos and photos, and further consider the underlying content of posts.