TASMANIA’S peak employer body, the Tasmanian Chamber of Commerce and Industry (TCCI), says the State Government must quickly move to a user pays system for water and sewerage services and streamline the administration system introduced with the latest reforms.

The TCCI says while it supports the reforms, the introduction has not been handled well by the Government, resulting in significant public and political angst.

This even forced the Government to move to advertise the charges in the three daily newspapers in an attempt to deflect criticism of the reforms.

Past local government inefficiencies and the cost of upgrading infrastructure are resulting in ratepayers receiving larger than expected bills for the water and sewerage now that responsibility has been handed to the three regional authorities. As well, the pandering to parochial interests saw the Government establish the three regional authorities and an over-arching State body.

This has resulted in a major and unnecessary bureaucracy that has added substantially to the administrative costs.

TCCI chief economist Richard Dowling said one authority should have been set up to manage the business throughout the State.

“However, we now have four boards and separate administrations that add to the costs that ratepayers have to meet.” Mr Dowling said.

“In moving quickly to the user pays’ model, the Government could also streamline the administration into a single authority and dramatically reduce administration costs.”

Mr Dowling said that the State Government should be encouraging the new regional water corporations to adopt a user-pays pricing model as quickly as possible.

“Already, 18 out of Tasmania’s 29 councils use water meters and the water corporations should make use of them,” he said.

“Proper pricing signals for water are the only way to restore and maintain quality infrastructure.  How can anyone defend a system where customers are paying charges that bear no relation to water consumption?

“Good pricing policies also promote good environmental outcomes. When water is priced at its true cost people are likely to be more thoughtful about how it is used.

“The current system sees the business sector paying substantially more for the same product than the residential sector. That is patently unfair and bad for business.

“It promotes waste and leads to bad environmental outcomes. Ultimately water services need to provided according to a user pays system that is clearly based on consumption and the actual cost of providing the water,” Mr Dowling said.

Liberal leader Will Hodgman has described the reforms as a’poorly implemented’ disaster and called for an immediate independent review of the new structure, which includes three regional bodies and a central umbrella agency.

The administration costs of the new system have also been questioned, with the Cradle Coast water authority planning works for $1 million new headquarters in Burnie.

Premier David Bartlett said his Government was doing all it could to ease the burden on families and was passing on the full concession for rates and water and sewerage to benefit recipients.

The Premier said it was unacceptable that 23 local councils were still on boiled water alerts and has criticised local government for under-investing in water and sewerage services over the years.

The TCCI said the current arrangements were also unfair on consumers in high-value properties who only used small quantities of water, but who would pay substantially more for their water and sewerage services that high users living in lower value properties.

Mr Dowling said the fact that people did not like receiving bills was not an argument against reform.

“Water infrastructure is crumbling across the State and maintaining the status quo was not an option for the Government.

“Historically, many local councils have undercharged for water which caused the assets to be run down.  Unfortunately, prices now have to rise to make up for this shortfall.

“Those who argue against full cost recovery have failed to explain how water infrastructure would be funded.

“There is no magic pudding here - if we want to maintain quality water to homes and businesses we need to pay the full cost.”

Mr Dowling said the Government was right to act to introduce its reforms, but it must now move to ensure that the said reforms are fair and cost effective.