Running the Risks: The Rationalisation of Australia's Water

This article analyses the categories comprising the relationship between productivity and rate-of-return reporting in the context of water infrastructure. It examines the categories and relations comprising rates of return, showing how each can fail to capture real productivity gains. Theoretically, high returns may be obtained despite low real productivity and vice versa. This has implications for 'corporatisation', since the restructuring of Australia's water systems has entrenched rate-of-return reporting as the pre-eminent measure of performance. The problem is, if water's rate-of-return is continually increased without ensuring commensurate real productivity improvements, eventually Australia's water systems must break down. The issue is acute as neither the theory of corporatisation nor the logic of 'economic rationalism' supplies a means for ensuring profitability does not outrun productivity. I conclude the rationalisation of Australia's water has exposed citizens to new, fundamental and otherwise unprotected social, environmental and economic risks.