High price of TasWater takeover

Tasmanians will pay a high price for a State Government takeover of TasWater if the plans announced by Treasurer Peter Gutwein proceed.
TasWater Chairman Miles Hampton warned that under the Tasmanian Government’s plan to bring forward a program that does not need to be brought forward, it would mean greater debt and fewer resources available for hospitals, schools and other essential services which actually need additional funding.
Mr Hampton expressed serious concern at the high level of unnecessary debt that would be thrust onto Tasmanians under the State Government’s proposed takeover and the impact of the costs of servicing that debt on future generations.
He said the Government was attempting to persuade the community by promising lower water and sewerage tariffs.
“The reality is that in exchange for an average annual saving of around $40 per household, future generations could be saddled with up to $600 million in additional debt equating to an added burden of $3000 for every Tasmanian household.
“This extra debt will have to be repaid, with interest, if not now, by future generations. That is the unnecessary legacy this Government is planning to leave for Tasmanians. Is this what the community deserves?”
“Further, the State Budget will take a $160 million hit to compensate councils.
“So to get its deal across the line, the Government will reduce annual water and sewerage bills by a total of $8 million each year, but reduce the funding available for essential services by $20 million, and we’ll still have the extra $600 million in debt to repay with interest.
“This simply is a nonsense and I am sure Tasmanians will see it for what it is.
“When the water reform occurred, councils transferred $2.5billion of assets to the new entities. Under the deal proposed by the Treasurer, councils are being asked to give up those assets for the promise of $160 million by way of $20 million a year payment for eight years.
“Effectively, they’re being offered a meagre six cents in the dollar, with absolutely no guarantee of a future return.
“Currently councils ensure TasWater takes a balanced, long term view on services and pricing, irrespective of short term election cycle issues, yet they are now being asked to give this up based on a doubtful promise. They are being offered an inadequate inducement that may, or may not be paid and are expected to take the Government, and future governments on trust.
Mr Hampton said there was no crisis, despite attempts by government to manufacture one and that TasWater had a responsible, affordable and fully-funded plan to upgrade Tasmania’s water and sewerage infrastructure.
“This plan does not result in a further $600 million in unnecessary debt and $160 million being drawn away from other essential services.
“Further, it does not reduce the funds available for hospitals, schools and other essential services by $20 million each year,” he said.
TasWater