Infrastructure Australia says Governments should not own water utilities

A paper released today by Infrastructure Australia (IA), says Australian water utilities are set to come under increasing pressure through growth and climate change. It states that unless there is a move away from a system where governments own, regulate, and set policies Australians can expect to see “rising water bills, high taxes or a decline in service quality.”
Importantly, the paper titled “Reforming urban water: a national pathway for change” comments:
Of all jurisdictions, Victoria and Tasmania have the most genuinely independent and comprehensive regulatory frameworks. Their arrangements, enacted respectively by the Victorian Essential Services Commission (ESC) and Office of the Tasmanian Economic Regulator (OTTER), currently meet the vast majority of criteria for minimum standard regulation. Both frameworks are characterised by clarity of regulatory objectives, effective stakeholder engagement and transparent decision making. The difference between each state’s population suggests that scale should not be a barrier to regulatory reform across other states and territories.
The paper echoes many of the concerns raised by the Productivity Commission in its Draft Report into the National Water Reforms released earlier this year, adding that the Tasmanian Government’s proposed legislative changes would see Tasmania shift away from best practice, with increased powers for political interference in decision-making.
“It is clear that the best model for water and sewerage in Australia is for Government’s to regulate, rather than own the utility – definitely not both,” said TasWater Chairman Miles Hampton.
“It also makes it perfectly clear that the pressures from growth and climate change are real, and that decisions about investment must be based on prudency and efficiency and tested by an independent regulator for sustainability and the best long-term interests of our customers.”
TasWater Chairman Miles Hampton