The Premier announced the creation of a Ministerial Water and Sewerage Taskforce in the 2006 State of the State speech to investigate the structural and regulatory arrangements in the water and sewerage sector.
The Taskforce found that:
- about $1 billion of new water and sewerage infrastructure is required over the next decade;
- half the 29 councils, who were the owners of Tasmania’s water and sewerage assets at that time, had not completed asset condition assessments and 70% did not have adequate asset management plans;
- the financial returns from the sector averaged around 2 to 3%, which has resulted in little capacity to service debt and an underinvestment in infrastructure;
- approximately 50 per cent of the wastewater treatment plants in Tasmania were not always in compliance with their licence conditions;
- 23 water supply areas were on permanent boil water alerts, including in key tourism areas; and
- Tasmania’s water and sewerage regulatory framework was light-handed compared to other Australian states.
The Government is driving reform in the water and sewerage sector because it will deliver significant long term benefits to public health, the environment and the Tasmanian economy.
Outcomes of the Review
Outcomes achieved by the Taskforce include:
- The Establishment of three Regional Water and Sewerage Corporations
On 1 July 2009, Ben Lomond Water, Cradle Mountain Water and Southern Water assumed responsibility for the provision of water and sewerage services.
- An Interim Price Order
In June 2009, the Interim Price Order was released. The Interim Price Order starts to transition the water and sewerage industry towards full cost recovery and consistent pricing arrangements by the first regulatory period on 1 July 2012.
On 17 February 2010, an amended Interim Price Order was published by the former Treasurer, the Hon Michael Aird MLC.
- Introduction of Water and Sewerage Concession
On 4 September 2009, the Water and Sewerage Industry (Community Service Obligation) Act 2009 commenced. The Act establishes arrangements under which the State Government will fund the full cost of the water and sewerage concession. The total cost of the water and sewerage concession is estimated to be $6.5 million for 2010-11.
- Introduction of Customer Services Standards
On 2 December 2009, the Water and Sewerage Industry (Customer Service Standards) Regulations 2009 commenced. The customer service standards framework has been developed to protect customers from the risk of misuse of monopoly power which could arise from a lack of competition in the provision of water and sewerage services. The Department of Primary Industries, Parks, Water and Environment is responsible for administering the Regulations.
- Action Plan for Water and Sewerage Billing
In November 2009 a seven point action plan for water and sewerage billing was announced by the Premier in response to community concern over some elements of the new system.
The State Government continues to progress the remaining elements of the regulatory framework. This includes the development of pricing regulations, including two-part pricing for water and the principles around developer and headworks charges.
The Regulator will also be continuing the development of a number of codes and guidelines to supplement regulation of the sector. These include the Customer Service Code, Performance Reporting Guidelines, Pricing and Service Guidelines, and the Regulator's Conduct Guidelines.