Time’s up for local government ownership of TasWater

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By Strategic Partner Paul Arnold

It was refreshing to see that Tasmanian voters decided to elect a majority government for a second successive state election, giving the Hodgman government a full eight years, (2014 – 2022) to make its mark on the Tasmanian community and economy.

This election result is at odds with the voting pattern of the federal election where no Tasmanian Liberal candidate was successful in being elected into the House of Representatives.

It speaks volumes for the electorates’ views and clearly identifies the scourge of minority government.

Incoming governments have a lot of goodwill and political capital to spend.

The extent of their electoral win gives the Tasmanian Government the mandate to implement their policies, and it will be interesting to see whether the Legislative Council can get out of the way and allow these policies to be introduced.

One of the more contentious commitments by the incoming government was to take over and reform TasWater, and to their credit the government was clear on its intention in this reform, over several months.

The memorandum of understanding between the State Government, the Local Government Owners Chief Representative and TasWater to improve water and sewerage services in Tasmania is an extremely promising step in the right direction.

Local government has hardly adorned itself as an authoritative voice on the future of water ownership, having had custody of the issue for the past 100 years.

The creation of the regional and then state body identified the extent of critical failure of most local government authorities, over decades, to ignore the funding of crucial investment in water and sewerage infrastructure.

This failure created many anomalies with respect to proportionate ownership of TasWater by the councils.

Seemingly those councils that did the right thing by investing in water and sewerage, while under their direct control, were, in my view, not rewarded appropriately with the spoils of shareholding and its lucrative dividend flow.

If the foundations are flawed, what then is the fuss all about? – ah that’s right “dividends”.

I wonder if we took out the dividend flow altogether, would local government care so much.

To the Treasurer’s credit, the memorandum of understanding outlines protected dividend flows of at least $20 million per year indexed forever.

Given this, it is good to see local government accept it does not have the resources to handle TasWater alone.

  • It has little influence on the overregulated monolith that TasWater has become,
  • The bureaucracy in TasWater has become no better than the state bureaucracy, so there is not much risk of it getting worse under state part-ownership,
  • Commitment to regional administration has ‘done in’ the North-West yet again,
  • Local government has been powerless to rein in TasWater’s focus on the engine room of Tasmania, small business, by its punitive actions on such things as grease traps,
  • Its begging bowl will never be attended to, while it ‘pokes’ the government in the eye (politics 101),
  • The old structure hampered a greater vision for Launceston and Hobart –  projects that demanded state and commonwealth support can now be attended to,
  • Water and sewerage is fast becoming an economic development service that TasWater is unable to cope with,
  • The spoils of dividend flow are there forever, without local government raising a finger.

In four years’ time, will anyone really care that TasWater moved from one public ownership structure to another?

Spending public money over this stoush has been counter intuitive to what public administration is all about.

The burgeoning economy deserves a more appropriate structure, and the state government can now help deliver this.

Roll on new ownership structures – out of the way Legislative Council.

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