Government should allow water reform to continue

TasWater Chairman Miles Hampton says the State Government should allow the reform of Tasmania’s water and sewerage system to continue and not use it as a political football in its fight with local government.

Mr Hampton was speaking at the University of Tasmania in an address to the State branch of the Economic Society of Australia.

He said the establishment of TasWater was arguably Tasmania’s biggest single micro-economic reform of the past 25 years and it was a great pity that the State Government had decided to turn it into a political issue.

“It is particularly disappointing given we are only part way through the reform journey and the impetus and benefits could be lost in a Government takeover.

“The reform rationale was correct, based on the mid-1990s report by London Economics that showed councils were struggling to maintain infrastructure.

“While the rationale for consolidation was correct, the task in combining people, systems, knowledge and capital programs was monumental.

“But we have been making great progress, particularly since the establishment of TasWater on 1 July 2013, but this is now at risk through a State Government takeover.

“There is no crisis and the regulators have not raised questions or concerns. The Government itself has not previously been interested until it saw political advantage in promoting a fight with councils.
“The fact is that TasWater has an affordable ten-year, fully funded plan to upgrade Tasmania’s water and sewerage infrastructure.”

Mr Hampton said the reform process had been impacted initially by the short lead time for establishment, the failure to set up one corporation at the outset and Government interference in pricing.

But now the Government was threatening to railroad the process completely for its own political ends.

He said the claiming of a crisis was simply dishonest

“There is no crisis in water or waste water in Tasmania and it is disingenuous for the Government to claim the situation is damaging the Tasmanian brand.

“TasWater has an affordable infrastructure upgrade plan that represents a careful balance between efficient operating costs, targeted capital spending, improving service standards, providing modest returns to owners while keeping price increases to a minimum.

“The Government’s plan is simply not financially sustainable. It will result in increased borrowings and increased costs and will also mean Treasury will have to fund TasWater. The end result will be that the community will miss out on important services such as additional hospital beds, more teachers and more police.

“But the reality is that it is not needed and the current ownership model and plan provides the best outcome for Tasmanians,” Mr Hampton said.
TasWater