PROPOSAL FOR PARTIAL DEBT-FUNDING TO BRING DOWN WATER AND SEWERAGE BILLS

Intergenerational Infrastructure Warrants Approach
www.tas.greens.org.au
The Tasmanian Greens today proposed partial debt funding of future capital expenditure of the three Water and Sewerage Corporations in order to reduce or eliminate future increases in water and sewerage bills.

Greens Leader and Treasury spokesperson Nick McKim MP said that the Greens’ proposal would support the investment necessary to improve Tasmania’s water and sewerage infrastructure, while providing some relief to Tasmanians struggling under unprecedented cost of living pressure.

Mr McKim said that the bills will currently increase by 22% over the next two years, but that partial debt funding would reduce or eliminate that increase.

“This is a positive suggestion that would make a real difference to Tasmanians who are struggling under massive cost of living increases, particularly on power bills and for water and sewerage.”

“Water and sewerage systems are intergenerational infrastructure, and as future generations will benefit, it is appropriate to partially debt fund future capital expenditure rather than funding it from cash flow generated by the massive bills currently dropping into letterboxes.”

“The government has an opportunity to act to bring water and sewerage bills down. I hope it is not rejecting this situation purely because it is being made by the Greens.”

Mr McKim said that the opportunity to re-evaluate funding of water and sewerage capital expenditure has come about due to an assumption made by the Economic Regulator that the three new corporations would have a debt level of 25% of their total value, which the Water Corporations’ Annual Reports now confirm was an overestimation. (reference below).

“Rather than 25% debt, we now know that debt is in the region of 8%, which provides plenty of room to move to reduce or eliminate future price increases by partially debt future capital expenditure.”

Cradle Mountain Water

http://www.cmwater.com.au/NWestWater/_
Documents/main%20website%20
documents/Annual%20Report.pdf

Ben Lomond

http://www.benlomondwater.com.au/
NorthWater/_Documents/News/2008%
202009%20Annual%20Report.pdf

Southern Water

http://www.southernwatertas.com.au/
SouthernWater/_Documents/Main%20
website%20documents/Annual%
20Report%202008%2009.pdf
Nick McKim MP Greens Leader