It’s official: State Government makes controversial move to take over TasWater

Posted 13 March 2017

Media interviewAfter much speculation, the Tasmanian Premier announced the State Government will take ownership of the state’s largest water utility, TasWater. 

During an address to parliament, Premier Will Hodgman said it was unacceptable for 25 towns to be on boil water or ‘do not consume’ alerts, and for only one of the state’s treatment plants to be fully compliant with EPA standards.

“Tasmania is a world-class destination with Third World water and sewerage services,” Hodgman said.

“That’s why the government is proposing a new model, where the State Government takes on responsibility for, and control of, TasWater.”
The move to take ownership of the utility has received a mixed reception, which might complicate the passage of legislation through the state's independent-dominated upper house.

If passed, the legislation would see the government take over TasWater from July 2018 and would prohibit the future privatisation of the utility. 

Announcing the move, Hodgman assured TasWater owners – Tasmanian councils – that they would have their dividends guaranteed until 2024-25. Afterwards they would get half of all future returns.

The Premier also said the takeover would lower water bills without causing anyone to lose their job or forcing councils to increase rates.

TasWater has not commented publicly on the matter, but The Mercury reported it had seen a confidential briefing note from TasWater chairman Miles Hampton to mayors. 

The document reportedly said a State Government takeover would lead to cost blowouts, higher customer bills and would make the utility financially unviable.

“A five- or six-year timetable is not achievable and [could] result in an extraordinary amount of wasted public money, significant increases in the cost of construction ... and a legacy of expensive underperforming assets, the effects of which will be borne by future generations of Tasmanians,” Hampton reportedly wrote.

The mayors of Hobart, Launceston and Dorset are among those who have welcomed the acquisition.

Launceston Mayor Albert van Zetten said it could present new opportunities for northern Tasmania.

"The decision has been taken, and we must now put our energies into working together to deliver the best outcomes for Launceston," he said

But Brighton mayor and former Chairman of the TasWater Owners’ Representative Group Tony Foster said the proposal would cost some councils more than $20 million in dividends, loan guarantees and tax equivalent payments over the next 10 years. 

“I’m surprised that the State Government has gone down this path. Have they learnt nothing from the ’90s when similar moves to bully councils tried and failed?” he said.

Clarence Mayor and President of the Local Government Association of Tasmania Doug Chipman accused the government of being politically opportunistic and misleading in their approach to the takeover this week.

“This continued rhetoric downplaying the accomplishments and plans for TasWater ultimately hurts all Tasmanians – impacting on our reputation nationally and internationally,” he told The Examiner.

The Labor opposition also criticised the move, hitting back with its own plan that involves securing superannuation funds' investment in major infrastructure projects. 

“TasWater would remain in local government hands and dividends would continue to be paid, providing acceptable project timeframes and performance standards are met,” said Labor leader Bryan Green
Tasmania's upper house currently has only two Labor and two Liberal party members. 

The remaining 11 voting members are independent politicians whose support would be needed for the State Government takeover. They have not yet indicated how they would vote. 

The Association would be very interested in hearing the views of the water industry on this controversial move by the Tasmanian State Government. Let us know what you think via email.