Councils face $45.7m cut in yearly TasWater revenue

THE State Government’s proposed takeover of TasWater could cost Tasmanian councils up to $45.7 million a year in lost distributions after 2025.

Brighton Council’s losses alone will amount to more than $1.4 million a year, equal to 15 percent of the municipality’s annual rate revenue.

Mayor Tony Foster said the distributions fund essential community projects such as roads, footpaths, community health facilities, parks and recreation areas, and other services vital to the community’s well-being.

Mayor Foster said this loss of revenue required to fund essential community services was the key issue for councils and their ratepayers, in the event of a State Government takeover.

“Long-range financial projections show TasWater will generate significant returns into the future ($45.7 million in 2025 according to TasWater’s May 2016 distribution profile) and under the current ownership, these returns would go directly into the local communities that councils serve

“However, Treasurer Peter Gutwein has already warned that following the 2025 end of the distribution guarantee in the legislation now before parliament, it is likely there will be no distributions from a Government Business Enterprise TasWater.”

Cr Foster said this would have a serious impact on Brighton as well as on all other Tasmanian municipalities.

“Significant projects in the Brighton Municipality that have been funded from TasWater distributions include a new medical centre in Brighton, the Old Beach cricket clubrooms, the major Brighton Streetscape development, the development of a third oval at Pontville including turf wickets for high-level cricket competition, the Old Beach Park and the Bridgewater Park.

“The development of these important community facilities would not have been possible but for the annual distributions received by the Brighton Council flowing from its investment in TasWater.

“Under the State Government’s plan, councils, including Brighton, are being offered just six cents in the dollar for their multi-billion-dollar investment in TasWater.

“Brighton’s investment in TasWater is valued at more than $46 million, paid for by every Brighton ratepayer. Yet under the Government’s plan, Council’s return over the next eight years will be less than $3 million in total.

“With the strong possibility of no distributions after 2025, Brighton’s losses will be even greater into the future.

“This will place Council’s finances under significant pressure and seriously harm our capacity to retain our fair rating system that holds down rate increases, providing the community with the lowest residential rates in Tasmania.”

Cr Foster said the impact would be the same for other Tasmanian councils and perhaps that was the Government’s intention – to break local government completely.

“Brighton Council remains firmly of the view that the State Government’s move to take over TasWater is more based on politics rather than serving the best interests of ratepayers and the Tasmanian community.

“That is why we have made a detailed submission to the Legislative Council Select Committee Inquiry into the ownership of TasWater strongly opposing the Government’s move.”