With more detail on the state government’s proposal to takeover TasWater expected in this week’s state budget, The Examiner is breaking down the key facts you need to know.
This handy guide will help to gather all the information from all sides and where they sit in the argument to keep you informed:
WHAT IS TASWATER?
TasWater was formed in 2013 through the amalgamation of three regional water corporations across Tasmania.
The regional corporations Ben Lomond Water, Cradle Mountain Water and Southern Water were owned by local councils within their respective regions.
A fourth company Onstream was owned by the three regional corporations and delivered shared services.
WHO OWNS TASWATER?
TasWater is owned by all 29 local government councils across Tasmania. Each council has a TasWater owner-representative who makes up part of the owner-representative group.
The TasWater board, which comprises a chairman and six non-executive directors, reports to the owner-representative group but is skills-based and members are independently appointed.
STATE GOVERNMENT PROPOSAL
Premier Will Hodgman announced the state government’s proposal to take over TasWater in his Premier’s Address in parliament in March.
In the address, the Premier took aim at water and sewerage reform conducted in 2008 that eventually resulted in the three regional corporations.
Mr Hodgman also criticised the company for not fixing the problems it set out to do in a timely manner.
The key aspects of the plan are:
- takeover TasWater as a government entity in 2018
- bring forward TasWater’s 10-year, $1.5 billion capital works program by five years
- cap bill increases at 3.5 per cent
- councils will still receive $20 million in dividends each year until 2024-25
A campaign on the proposed takeover has been run by Treasurer and Local Government Minister Peter Gutwein since the announcement made by the Premier.
Mr Gutwein has denied the move to takeover TasWater would lead to council amalgamations and the decision would not result in reduced transparency for pricing and environmental regulation.
The government has also said the move would prevent the privatisation of TasWater and the takeover would not result in job losses or the loss of concessions for low-income earners.
One aspect of the government’s plan that has yet to be revealed in detail is how the plan will be funded, with more details on this aspect expected in this week’s state budget.
The government has been tight-lipped on this aspect referring back to detail to be made available soon.
A key component of the state government’s campaign on the proposed takeover has been the inference there is a “crisis” in water and sewerage in Tasmania.
The issues around the combined water and sewerage infrastructure in Launceston have been a key election issue in the recent Legislative Council elections and is likely to become a state issue for next year’s election.
However, the use of the word crisis is one term the TasWater board refuses to accept.
In a presentation to the Local Government Association of Tasmania, TasWater chairman Miles Hampton asserted there was no “crisis” in water and sewerage in Tasmania.
The presentation states that at no time has the DHHS (department of health and human services) or the EPA (environmental protection agency) verbally or in writing advised us that a crisis exists.
The EPA has also never issued any fines for environmental damage in the past 12 months.
Mr Hampton admitted the state did have some water and sewerage issues but believed TasWater’s 10-year capital works program was working to address those.
On TasWater’s website there are four Do Not Consume alerts at Pioneer, Rossarden, Avoca and Winnaleah. There are 21 towns on Boil Water alerts across Tasmania.
In addition TasWater disputes the capital works program would be achieved in a significantly quicker time frame under the state government than under current ownership.
The state government has clarified the plan would be delivered in seven years or three years earlier than TasWater’s program.
A special meeting of the Local Government Association of Tasmania (LGAT) was held in Launceston on May 11.
Representatives from all of Tasmania’s 29 councils attended the meeting to vote on the council’s position on the proposed takeover plan.
A motion to oppose the plan passed at that special meeting, with four councils voting against the motion and two abstaining from a vote.
Dorset, Central Highlands, Sorell and Derwent Valley all voted against the motion while City of Launceston and George Town abstained.
LGAT members voted to begin a campaign against the state government’s proposal.
The minutes from the closed meeting have been released to reveal the concerns representatives of TasWater’s owner councils had with the state government’s proposed takeover of the entity.
The minutes state the councils were concerned the takeover would present ‘likely increased pressure’ from the state government for forced amalgamations.
Other concerns raised at the meeting include:
- the likely loss of future revenue with no return on investments
- reduced influence, scrutiny and transparency of TasWater
- reduced advocacy by local owners for service provision
- prices capped only in the short term
WHERE TO FROM HERE
Peter Gutwein has said the councils’ opposition to the takeover will not stop the state government from pursuing the bid for TasWater.
Detail on how the government plans to fund its takeover bid is still yet to be answered and will hopefully be made clear in the state budget on May 25.
It doesn’t appear the councils’ will give up TasWater without a fight but details on their campaign to oppose the takeover are yet to be finalised.
Another LGAT meeting will be held next month and it is likely the issue may make the agenda again.