Dry spell hits hard

Brighton Council, with all Tasmanian councils, has been impacted by the loss of promised dividends from its investment in TasWater, as well as unprecedented costs of responding to the COVID-19 emergency.

BRIGHTON Council, with all Tasmanian councils, has been impacted by the loss of promised dividends from its investment in TasWater, as well as unprecedented costs of responding to the COVID-19 emergency.

TasWater is owned by local government, with the State Government taking a minority stake following its cash injection agreed in 2018. Councils had already accepted a reduction in dividends to assist the water and sewerage corporation’s accelerated 10-year capital program.

The dividend was suddenly halved last financial year. This year, the dividend payment has been cut completely.

TasWater was established in 2013, with councils handing over their water and sewerage infrastructure, built and paid for by ratepayers, in return for ‘guaranteed’ dividend payments every year.

Brighton owns 2.87 percent of TasWater, equating to a value of more than $41 million. The loss of dividend payments in today’s terms means an annual reduction in revenue of more than $1.4 million, based on what was originally promised. Effectively, the decision of the TasWater Board to cease paying dividends means that currently, Brighton Municipality is not receiving any return on its significant investment in its water and sewerage infrastructure.

This is in stark contrast to the previous regime when councils owned their water and sewerage services and they were required by the then Commonwealth Government’s national competition policy to take a return from this investment.

Because of Brighton Council’s previous strong investment in providing water and sewerage services, Brighton has had a significant reliance on its returns from TasWater, with it currently providing equivalent to eight percent of rate revenue, so it is a hugely significant loss.

However, through its prudent management and operational efficiencies, Brighton Council has been able to absorb this reduction in revenue from TasWater and has continued to provide the full range of services and support for the municipality.

As well, Council has provided special assistance and support during the COVID-19 pandemic and has incurred additional costs to ensure its safe operations and protect its workforce and the community. Brighton also adopted a nil general rate increase for 2020 – 2021 to assist ratepayers through the immediate emergency period.

Through all this, the Municipality’s fair rating system has ensured Brighton continues to have the lowest rates and operating costs per capita of all Tasmanian councils along with the highest level of efficiency. 

Council is determined to maintain this position and at the same time, continue to encourage the development of the municipality and the provision of enhanced facilities and services for the community. But undoubtedly, the reductions in revenue are placing increased pressure on Council’s budget and its rates’ policy.

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