Decide what’s more important – jobs or unemployed people “getting water slightly cheaper.”

The abattoir’s chief executive Coll MacRury spelt out the choice in a December letter to Council. At that stage Council was suggesting a 25 per cent discount on water charges for the business, which CEO Coll MacRury said would add $150,000 annually, or 69pc to his bill.

“In the current business environment this is not sustainable for Southern Meats and if this is adopted it would have a severe impact on our ability to operate successfully in Goulburn,” he wrote at the time.

“It would dampen our ability to provide any further employment opportunities for local people.”

His letter was responding to Council’s proposal for a special industrial water charge for high users. Currently Southern Meats is the only business that qualifies.

It coincides with a proposed 33pc hike in household water use charges. Both are designed to achieve ‘full cost recovery’ for Council’s water business unit, in line with a state government directive.

Councillors struck a compromise for the abattoir at Tuesday’s meeting – a 42 per cent reduction, adding about $125,000 annually, to be phased in over five years.

Deputy Mayor Bob Kirk’s motion won almost unanimous support. Only Cr Robin Saville voted against.

On Wednesday abattoir representative Scott Newton told the Post the charges were still not acceptable.

“Not if we want to grow the business, no,” he said.

“We are trying to reduce our water use as much as we can and we hope things get better and don’t run into another drought.”

He stressed with the cost of livestock, the high Australian dollar, higher business and labour costs relative to other countries and other expenses, any competitive advantage was critical.

“If you look at what our competitors are paying for water, that is the issue,” he told Tuesday’s meeting.

Mr Newton said his younger brother operated the Junee abattoir and the local council could not do enough for the business. He called on Goulburn Mulwaree to support local industry, pointing out it had already lost Oral B, Supertex, the Goulburn Wool Scour and Kermac.

Southern Meats employs 270 people and slaughters 3600 sheep and lambs daily.

“In a nutshell, if we pay the prices suggested in the report, we won’t have a business,” he said.

The comment provoked a lively exchange with Cr Saville who challenged Mr Newton on whether Southern Meats was considering leaving Goulburn.

Mr Newton said he could not respond on the CEO’s behalf but if the cost of doing business was rising and he was signing the cheques, “then yes.”

Cr Saville immediately called for deferral of the item, pending clarification from Mr MacRury. This was not successful.

But he questioned why Mr Newton expected the people of Goulburn to “subsidise” his operations when other factors like the international money market were affecting viability.

“Why should Southern Meats be excluded when the rest of the town will endure pain over water pricing?” he asked.

The abattoir uses 210 megalitres annually (based on 2011/12 figures), a report by water services manager Grant Moller states. This is about 10pc of Goulburn’s total annual water use.

Currently it pays 97c/kilolitre, meaning a $205,000 annual water bill. If charged the same as other businesses in town it would be slugged $570,000, Mr Moller said.

The $365,000 discount means a cross subsidy of $36 for every Goulburn property.

Under the new regime suggested on Tuesday, it would pay $1.57/kl, equating to a $125,000 increase in the annual bill. The cross subsidy is $43/property.

Cr Kirk disagreed with Cr Saville’ saying Council had a responsibility to support businesses that had a significant economic benefit. He was sympathetic to Southern Meats’ concerns and suggested a five-year staging. In addition, Council will assist with a water saving plan.

But he stressed the regulators were driving the changes and Council had little choice but to achieve full cost recovery for its water.

“There is some pain for all of us who use water,” he said.

“The immediate pain for residents is a 33pc increase on their user charge. The fact is the price of water is cheap in the first place. Our prices have not risen in a long time and that could be because we haven’t taken the hard decisions.

That’s why our water fund is in such a poor state.”