The dividends paid by state-owned water companies to the Queensland government have surged by 490 per cent in just one year.

A report by the Queensland Audit Office shows dividends to the state government increased from $8.1 million in 2016-17 to $47.8 million in 2017-18.

Wivenhoe Dam, which supplies water to south-east Queensland. Credit:Robert Rough

Auditor-general Brendan Worrall said the increase was mostly due to SunWater declaring dividends in 2017-18 and retaining all of its $36 million in profits in 2016-17 for future dam improvement works.

Due to operating losses, Seqwater continued to make no dividend payments to the state in 2017-18.