A draft report into progress on the National Water Reform has cited the state government’s efforts to take control of TasWater as ‘backtracking on reform’.
According to TasWater chairman Miles Hampton, the report was highly critical of the government’s plan to stop regulating water prices.
“The report says … this change is unlikely to promote the agreed National Water Initiative objectives, particularly the efficient use of water infrastructure,” he said.
“The report sends a clear warning to Tasmanians that the proposed state government takeover was detrimental to water reform, and not in the community’s best interests.”
But Tasmanian Treasurer Peter Gutwein noted the Productivity Commission’s comments, but claimed it did not seem to understand the government’s proposal.
“They have not been briefed on the detail of our proposal or the reasons for it,” he said.
“Rising prices around the rest of the country is the outcome of national reform and we will do what is in the state’s best interests, regardless of the views of the Productivity Commission or the other states,” Mr Gutwein said.
Mr Hampton said TasWater knew it was underpricing water, but it had a plan.
“The National Water Initiative is that water should be priced to the customer at what it costs,” he said.
“We have known from the time of reform that customers were paying below cost recovery and we have been slowly moving them towards full cost recovery.
“But the real issue is that under the state government proposal they would cap price increase and we would never get full cost recovery,” Mr Hampton said.
David Downie, chief owner’s representative of TasWater, said the crux of the issue was that government wanted to centralize price control.
He hoped the commission’s report would have an effect on the bill coming before the Legislative Council.
“I hope they take note,” he said.
The government’s legislation to takeover TasWater has passed the House of Assembly.
If it passes the Legislative Council the state government will take control of the water entity on July 1, 2018.