The Liberals’ “sweetened” TasWater takeover plan has been criticised by the water body, local government sector and Labor but some stakeholders have supported the proposal.
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TasWater chairman Miles Hampton said the revamped plan would saddle the state with more debt, for longer, by committing to pay at least $20 million to councils annually.
Under the previous plan councils would receive 50 per cent of TasWater’s profits with dividends guaranteed until 2025.
However, Mr Hampton questioned if this could make the organisation profitable.
He said the Legislative Council rejected the state government’s takeover in November because it was not backed up by evidence.
“The government failed to provide the financial detail required to indicate that it could manage TasWater any better than the council owners and independent board,” Mr Hampton said.
“It’s artificially managed pricing structure and accelerated works programme would rack up a state debt equivalent to $2,675 for every TasWater customer, accruing interest for decades to come.”
He said committing an annual payment to councils of at least $20 million per year will “lock in an even greater commitment to debt”.
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“In contrast TasWater’s plan encompasses a fully financed infrastructure program, customer pricing overseen by Tasmania’s independent economic regulator and an organisation managed by and independent board and water industry professionals,” Mr Hampton said.
Treasurer Peter Gutwein said the sweetened TasWater takeover plan was about tackling the cost of living.
“The average residential water and sewerage bill has increased by more than 51 percent since 2010-11,” Mr Gutwein said.
“That's why as part of our sweetened TasWater takeover Plan, we've increased savings to Tasmanians by putting in place an immediate one-year freeze on prices, with no catch-up.
“This will mean permanently lower prices for Tasmanians, and savings of around $110 per year on average over 6 years for the typical customer on your water bill.”
Denison Labor MLC Madeleine Ogilvie said the Liberals updated takeover proposal was “nothing more than an election bribe to local government”.
“The TasWater takeover was rejected by local government, rejected by the Legislative Council and rejected by voters in Pembroke,” Ms Ogilvie said.
“No one believes the Liberal asset grab will deliver lower water prices and today’s announcement comes with no new modelling, no new evidence to back their claims.
“Worst of all, the Liberals are proposing to give $20 million to councils each and every year – forever – to deliver a service that is already being delivered.
Ms Ogilvie said the $20 million could instead go towards Tasmania’s schools and hospitals.
Local Government Association of Tasmania president Doug Chipman said the plan falsely assumed the issue of council dividends was the sector’s only concern.
“Tasmanian councils are always mindful of cost of living pressures facing their communities but we have to take a very long-term view,” he said.
“It is important that disproportionate costs are not shifted to future generations, particularly for short-term or minimal gains.”
Meanwhile, Property Council Tasmanian executive director Brian Wightman said the local government sector should reconsider its position for the good for all Tasmanians.
“Councils will retain their cherished dividends and not have to spend another cent on the infrastructure that they neglected so badly and failed to upkeep during the last century,” he said.
“It’s difficult to understand why some leaders in the community refer to this reform as a confected crisis when just one of our 78 water and sewerage treatment plants in Tasmania is deemed compliant.”
The key elements of the “sweetened” TasWater takeover proposal are:
- An immediate 12-month price freeze for customers, with no subsequent catch-up, meaning prices will always be lower;
- Total savings to customers of approximately $700 on average over six years – an increase of $200 on the original proposal; and
- The provision to councils of either 50 per cent of TasWater’s profits or $20 million (whichever is greater), indexed forever instead of until 2025.