Water and Sewerage Industry
Water and Sewerage Reform
Frequently Asked Questions
Legislation and Regulations
1. Why did the water and sewerage sector need to be reformed?
The Government is leading reform in the water and sewerage sector because it will deliver significant long term benefits to public health, the environment and the Tasmanian economy.
Water is a source of competitive advantage to Tasmania that needs to be harnessed. There are enormous opportunities from increased investment in water and sewerage for employees in the water and sewerage sectors, tourism operators, farmers, local businesses and, most importantly, for Tasmanian communities in years to come.
2. Why was the local government-owned regional business model the preferred model for implementing in Tasmania?
The Ministerial Water and Sewerage Taskforce carefully considered state government and local government ownership, and of a single business or three regional businesses.
The Taskforce’s priorities were to ensure that the businesses operate on an appropriate commercial basis, have appropriate capabilities to provide sustainable services and are capable of operating within a significantly enhanced economic and technical regulatory framework.
Following significant consultation with local government and other stakeholders, the local government-owned regional business model emerged as the preferred model, given the ownership arrangements prior to the structural reforms.
This model for structural reform was endorsed by the Premier’s Local Government Council in early February 2008.
Legislation on the structural and regulatory reforms can be found below:
Water and Sewerage Industry Act 2008
Water and Sewerage Corporations Act 2008
Water and Sewerage Industry (Community Service Obligation) Act 2009
3. What is the new structure in the water and sewerage sector?
There are three vertically integrated businesses providing bulk, distribution and retail water and sewerage services, and a common service provider subsidiary company.
The three businesses (Ben Lomond Water, Cradle Mountain Water and Southern Water) cover the north, north west and the south of Tasmania respectively. They are each owned by the councils in whose municipalities they operate. The common service provider subsidiary company, Onstream, provides services to all three businesses wherever there are opportunities to secure economies of scale, avoid duplication and minimise costs for consumers.
All businesses have expert and independent Boards that report back to council owner representatives.
4. What level of consultation has occurred with the community and key stakeholders?
The water and sewerage review commenced in December 2006 with the release of a Ministerial Taskforce Discussion Paper for initial consultation with stakeholders. Submissions closed on 23 February 2007 and 62 submissions were received, including approximately 30 from local councils. The Discussion Paper can be found here.
All stakeholders had the opportunity to contribute to the regulatory reform process. The Proposed Position Paper - Future Regulation of the Tasmanian Water and Sewerage Sector (Part A) was publicly released and submissions to this Paper closed on 14 January 2008 (submissions are also available on this website).
Part B of the Paper was released on 9 January 2008 and submissions closed 20 March 2008. These papers reported on the ideas and extensive discussions that have occurred with all stakeholders over the past 12 months.
Over 160 people attended the regulatory workshops and seminars that were held in Hobart, Launceston, Devonport and Burnie.
The former Treasurer, Hon Michael Aird MLC, also held one-on-one discussions with all 29 councils, as well as with numerous business and other interest groups. The former Treasurer also met with the General Management Committee of the Local Government Association of Tasmania on a number of occasions.
In addition, government officers met with all councils and all bulk water authorities. There was also a working group established which comprised representatives of the State Government and key local government representatives.
The outcome of all of these discussions and consultation was the local government owned, regional model which was accepted by the Premier’s Local Government Council at a meeting in early February 2008.
5. What does the State Government gain out of the reforms?
The State Government’s objective in reforming the water and sewerage sector is to improve public health, environmental and economic outcomes in Tasmania.
The State Government will receive no financial benefit from the new businesses. All returns will flow back to owner councils.
The Government is making some major financial contributions to the reforms, through the Community Service Obligation payments and to support the new businesses arising from the decision to cap the price rises at five per cent over the interim pricing period.
6. Why could State Government not simply provide money to councils to replace or upgrade water and sewerage pipes and treatment plants?
When water and sewerage activities were provided by the councils, these activities in each council were not of a size to be able to provide the large scale of development required across the State to support the needs of the community generally. Furthermore, the lighthanded regulatory environment and fragmented service provision model did not support the achievement of a sustainable water and sewerage sector in Tasmania. Regulatory and structural reform was therefore vitally important.
Ad-hoc water and sewerage funding from the State Government to support councils without fixing the underlying structural and regulatory issues would have amounted to a ‘band-aid’ solution and placed ever increasing costs on Tasmanian taxpayers.
7. Why is water quality and delivery important to economic development?
Tasmania’s prosperity is linked with the availability of water and sewerage infrastructure that can meet our needs. Tasmania has a reputation for producing fine food, beverages and unique tourism experiences. Access to quality water and effective sewerage services is essential to maintain the competitiveness of industries in Tasmania.
8. What are the key elements of the regulatory reform?
The regulatory framework includes new or revised roles that provide for:
The regulatory reform measures are consistent with the nationally agreed National Water Initiative which seeks to promote the sustainable and efficient use of Australia’s water resources. Tasmania is party to the NWI Agreement, which means that the State must adopt certain policies and practices, such as best practice water pricing and planning.
9. What can the consumer expect in terms of new levels of service?
The Water and Sewerage Industry Act 2008 requires the Tasmanian Economic Regulator to issue a customer service code for the water and sewerage sector that specifies, amongst other things, minimum service standards and conditions for regulated services with which a regulated entity must comply.
The purpose of the Water and Sewerage Industry (Customer Service Standards) Regulations 2009 is to prescribe the matters that are to be dealt with in the customer service code and, where appropriate, to define minimum levels of customer service to be included in the code.
The primary intent of the customer service standards framework is to protect customers from the risk of misuse of monopoly power which arises owing to a lack of effective competition in providing water and sewerage services.
The Regulator is currently in the process of developing the customer service code for the corporations.
10. Who do I talk to about my water and sewerage services?
You should contact your regional water corporation to discuss your water and sewerage services, either by phoning 13 MYWATER or 13 6992.
Or you can visit their website:
11. How are water and sewerage prices set?
Under the regulatory framework, the Treasurer is responsible for setting the prices for water and sewerage services until July 2012. This is implemented through an Interim Price Order, which covers the years from 2009-10 to 2011-12. This will start the process of moving the sector to a sustainable footing.
The water and sewerage legislation passed in 2008 governing pricing from 2012 establishes the Tasmanian Economic Regulator as the authority responsible for setting prices for water and sewerage services. The legislation requires cost reflective pricing, including a volumetric charge for water used. This is why water meters are being rolled out state-wide by 2012-13, which will result in all customers being charged for the water they actually use. The volumetric charge will be designed to cover at least the variable costs of providing water and sewerage services. Fixed charges will continue to apply to reflect the cost of making services available.
12. How have prices been set under the Interim Price Order?
The corporations were required to set water and sewerage prices for 2009-10 on the same basis as councils did in 2008-09. This was not ideal, as different councils had adopted very different approaches to charging, most of which were not related to costs to supply or to water usage. Some based charges on the assessed annual value (AAV) of the property only, while others used a combination of AAV and a volumetric charge per kilolitre of water consumed. Some had charges according to the pipe size used to connect the property to the network. There were also very different free water allowances from council to council.
Unfortunately, it was not possible to move immediately away from these arrangements to a consistent, cost effective approach as the systems required to do so have not yet been developed and it would have involved very large price increases for some customers. Therefore a phased approach has been needed.
13. How are those in hardship assisted?
It is a requirement under the Water and Sewerage Industry (Customer Service Standards) Regulations 2009 that the corporations develop a hardship policy for those who find themselves in financial hardship. The hardship policies are on the websites of the corporations.
14. Will I have a water meter installed under the Government’s reforms?
The majority of municipalities in Tasmania already have water meters installed for business and household consumption, although the large urban municipalities in Tasmania are largely unmetered. Water meters will be rolled out state-wide by 2012.
15. What happens if I have already paid a bill for 2009-10 that was more than 5 per cent above the previous year's bill?
The Premier announced in November 2009 that increases in water and sewerage bills would be reduced from 10 per cent to 5 per cent. Those households that paid their water and sewerage bill based on the 10 per cent price increase would have received a rebate if the overpayment was greater than $20 or a credit on their next bill if the overpayment was less than $20.
16. Who do I talk to about my water and sewerage bill?
You should contact your regional water corporation to discuss your water and sewerage bill, either by phoning 13 MYWATER or 13 6992.
Or you can visit their website:
17. What concessions are available?
Concessions are available for eligible customers. The level of concession is $136.50 ($68.25 for water, $68.25 for sewerage) for the full year 2010-11. For 2011-12, the concession will be $150.15 (about $75.00 per service).
If the customer receives either a water service or a sewerage service, but not both, this amount is reduced to $68.25. Eligible customers are those who fall into one or more of these categories:
1. those that were eligible to receive a Pensioner Rates Remission from your local council at 30 June 2010; and/or
2. those that hold a:
In most cases, the concession is shown on your account. If there is no reference to a concession and you believe you are entitled to one under the categories above, it is necessary to complete an application form and send it to the relevant corporation.
The application form will be available on the corporation's web site or one can be mailed to you on request.
18. Will Housing Tasmania tenants be billed for any part of water and sewerage bills?
No. Housing Tasmania tenants are exempt from paying water and sewerage charges.
19. Who do I contact if I am unhappy with the response provided by my water corporation?
If you are unhappy with the response provided by your water corporation in relation to your water and sewerage bills or services, you may wish to raise the matter with the Water and Sewerage Ombudsman.
The Ombudsman is an independent officer appointed by the Governor and answerable to the Parliament. The role of the Ombudsman is to investigate the administrative actions of the water and sewerage corporations to ensure that their actions are lawful, reasonable and fair. It is a condition of a corporation's licence that it must comply with any recommendations made by the Ombudsman relating to a complaint involving a corporation and a customer.
The office of the Ombudsman can be contacted by telephone on 1800 001 170. Further details can be obtained from the Ombudsman's website at: http://www.ombudsman.tas.gov.au/