Financially squeezed Tasmanians face higher than expected water and sewerage bill increases after a regulator took into account rising inflation ... for TasWater.
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TasWater intends to hike prices by "only" 3.5 per cent a year for the next four financial years.
The hikes have been foreshadowed after cost inflation surged past wages growth in Tasmania and nationally, leading to the Reserve Bank's first cash rate increase in more than a decade, with more interest rate rises expected to follow.
TasWater had earlier been expected to be limited to maximum increases of 3.07 per cent a year, but the Office of the Tasmanian Economic Regulator revised the upper limit contained in a draft report upwards to 3.71 per cent.
" ... the price increases are due to TasWater's very large capital expenditure program and its associated operating costs, and recent increases in the cost of debt and inflation," regulator Joe Dimasi said.
"The increase is much less, however, than TasWater's estimate of a 6.5 per cent annual increase to achieve full cost recovery by 2025-26.
"This is because I have reduced the allowed costs in several areas, including the return on TasWater's capital."
TasWater said it welcomed the regulator's determination of a maximum 3.71 per cent per year over four years.
"However, consistent with the commitments TasWater has made to its customers, stakeholders and owner representatives, TasWater will only increase its prices by 3.5 per cent per annum over this period," it said.
"As noted by the TER, this equates to an average household increase of $43 per year, based off the average annual residential property water use amount of 179 kilolitres, or 83 cents per week for the 2022-2023 financial year."
Chief financial officer Mattew Pigden said TasWater continued to work closely with councils, owner representatives and the state government to ensure prices were kept as affordable as possible.
"A conservative price increase will allow TasWater to continue to improve and invest in water and sewerage infrastructure, including the continuation of our $1.1 billion capital delivery program over the next four years," Mr Pigden said.
Shadow Finance Minister Dean Winter said the "water cash grab" meant more pain for Tasmanians.
"The Rockliff-Ferguson government has failed Tasmanians again with massive water price rises set to put even more pressure on household budgets," Mr Winter said.
"At a time when Tasmanians can least afford it, TasWater has quietly announced a massive 3.5 per cent rise in water bills a year for the next four years.
"That means a 15 per cent increase over the next four years, or an extra $450 bill for households over the period.
"Labor has been warning of this for months, and yet the government has done nothing to protect Tasmanians from further financial pain."
Treasurer Michael Ferguson said the planned increases followed TasWater's prices being frozen for two years to 2020-21.
While the economic regulator's final pricing determination allows for a maximum price increase of 3.71 per cent, in accordance with the memorandum of understanding agreed between the Tasmanian government and TasWater, TasWater's price increases will be capped at the lower amount of 3.5 per cent for the next three years," Mr Ferguson said.
"The government notes the economic regulator's statement that this will 'result in a typical residential customer using 179 kilolitres of water per annum facing an annual bill increase of $43 in 2022-23', which is significantly less than the $453 increase claimed by Dean Winter."
The regulator said it had applied efficiency savings to TasWater's operating costs.