Ms Armitage (Launceston) - Mr President, first I would like to thank the Parliament for approving the select committee inquiry into this proposed takeover. I take this opportunity to thank the members of the committee - Tania Rattray, Rob Armstrong, Craig Farrell, Mike Gaffney and Rob Valentine, and Kerry Finch for a short time - for all their hard work and time given, particularly given the demands of other committee work and time restraints. Many thanks also to our committee secretary, Natasha Exel, who worked tirelessly, and Julie Thompson and the Legislative Council secretariat for their support throughout the course of the inquiry as we could not have completed our work without them, particularly given the tight time frames.
Some were concerned we were working to the Government's time constraints, given the upcoming election, but it was important for councils and TasWater management and staff in particular not to have this issue hanging over their heads for many months to come. Had there been more time, there were areas that could have been examined more forensically, particularly financials with regard to the proposed takeover. I sincerely thank all the organisations and individuals who put in submissions and took time to address and provide evidence at hearings. Fifty-four submissions were received, many of them substantial, from both sides of the argument from right across the state. The availability of TasWater, LGAT and the Treasurer was never in doubt, and they readily responded to any queries and came back before the committee on request.
Like the member for Windermere, I, too, was on local council when many years ago the state government and Mr Aird thought state ownership was something that should be looked at. I notice he has come out recently saying he does not think it is the best way. Like the member for Windermere, I was on the Launceston City Council and we fought very hard to stop government ownership. We were part of the council and the real worry we had was this was the first of many things council might lose. We thought, 'If they are taking our sewer and water, what are they going to take next? Are they going to take planning? Before we know it councils will not be viable'. It was a real concern.
Mr Dean - Roads, dogs and rubbish was all we would finish up with, wasn't it?
Ms Armitage - Roads, rates and rubbish might well be all we had if they took some of these different areas. It was concerning.
As to the bill, it is not all doom and gloom from either perspective. I, too, did a survey and discovered most people did not know who owned TasWater and, in all honesty, did not really care. All they cared about was that they had clean water. A lot of them, mainly in the Launceston and Meander Valley areas, were concerned about the Tamar River and the fact there was raw sewage. After the floods, it came to the fore for them and they became more aware when they saw on the front page of the paper sewage in a variety of businesses. The main area they complained about, and the member for Windermere read out a letter from Mr Bullock, had many people saying the cost was so expensive they might use $19 worth of water but their account was $260. That was an issue that came up.
I felt guilty in some ways. I do not know about the member for Windermere, but when I was on council and people asked what the changes were going to be, I would say, 'Look, there will not be any changes; the service will be the same but you will just pay a different entity'. We did that. We told people that is what the situation would be. Would it have been different under state ownership? I, like many other aldermen, believed and told people there would not be any other changes; it would be the same but you would be paying someone different out of your rates.
Ms Rattray - It was suggested to members of the Legislative Council at the time that it would be in the order of a 10 per cent increase.
Ms Armitage- We have all heard those figures from time to time.
There have been many positives from our select committee. One is that upper management is now more aware of some of the problems existing in the lower and middle management with regard to customer complaints and issues. I have to put on record how good Michael Brewster has been. I am sure other members have found the same. I have taken many issues to him over the last weeks and months. Without fail, he has come back to me quickly and when he could not resolve the issue he has advised why. I have an email from a staff member of TasWater saying -
We apologise for the fact that you had to get involved to have this matter resolved.
That was something for TasWater to admit that it took a member's office getting involved in a complaint or in a concern for it to be resolved. It was good that they admitted that.
Many concerns were raised in submissions and via members and constituents. Most of the concerns opposed to the takeover of TasWater were in regard to councils and the inability of some to manage without current dividends. This is understandable as many councils use their dividends for community and other essential areas that would not receiving funding. If there is no profit after 2025, half of nothing is still nothing. It is a lack of certainty that is the real problem for many.
The question was raised, is there a crisis? It depends on who you ask; it is as simple as that. One media release of 20 November I had to point out was not quite true. I was disappointed not to receive something back. Mr Hampton put out a media release saying -
… it is not that simple to counter the findings of three independent expert bodies and particularly as the Legislative Council Select Committee correctly pointed out, there is no crisis ...
I found it disappointing to cherrypick because I pointed out that the media release was incorrect. Our finding was there was no consensus of a crisis. That is very different from the committee finding there was no crisis - saying that there was no consensus of a crisis. Even though I sent an email pointing that out I did not receive anything to say the media release had been retracted or changed. That is worth mentioning.
The priority in the TasWater discussions must be the delivery of the best outcomes for all Tasmanians, and especially those on low incomes.
In the 2016-17 annual report of TasWater, and I appreciate, as other members have said, it is rare to see a bad report, it was good to see TasWater was awarded WorkSafe Awards for Health and Safety - that is important - plus permanent boiled water alerts from Scamander after 10 years of alerts make it first in TasWater's 24glasses project. There are some gains and positives when it comes down to the Tasmanian WorkSafe Awards. The WorkSafe Tasmania Awards recognise Tasmanian businesses, organisations and individuals leading the way in work health and safety, health and wellbeing, and return to work.
It was good to see Health and Safety Representative of the Year was Nigel Cure of Remote Networks; Best Individual Contribution to Work, Health and Safety was Martin Judd, Health and Safety Service Delivery North; and Darren Ward was a finalist in the Best Solution to a Work Health and Safety Issue Award and in the Best Work Health and Safety Management System Award, TasWater Fatal Risk Program. It is good to see because the health and safety areas are extremely important.
I have raised many concerns directly with TasWater over the past few years and it would be remiss of me not to put them on the record. Regardless of what happens today, it is important that changes in culture are made. One of the main issues is to do with tendering.
I have had a few confidential briefings from people who said, 'We cannot come and see you' or, 'We cannot come on the record and see you, we cannot come before your committee because we will not get any more work from TasWater'.
I found it disappointing they were concerned that if they gave their names, their work would be stopped. The comment was that 'Those who have poked the bear no longer get work'. It is a good thing to bring these issues out and have this committee raise matters that upper management might not be aware of.
They said that sometimes contracts were made bigger to attract massive firms to the tender process. The disadvantage is that small local firms are tendering for jobs but are being overlooked. I am concerned this has happened on tenders to fix water problems in small towns. The comment from one engineer was, 'You don't need a brain surgeon to sweep the floors'.
I have been assured in the past that locals are being used to do local work. It appears that if you have a local office, even if you are a mainland company, that makes you local.
When we asked questions, they were about building capability and building up our workforce. It is sad our engineers feel they need to tie up with a mainland company. One local contractor who was sick of being overlooked for contracts has teamed up with a mainland company so it has a chance of winning contracts. The local contractor fills in the required tender paperwork and emails it to the mainland company. The mainland company then copies and pastes the information to one of its letterheads, adds another 50 per cent to the tender quote and submits it to TasWater. If it wins contracts, the mainland company uses the local contractor to carry out the work. The local contractor makes its money by doing the job. The mainland company makes its money by sending in a few documents and overseeing the project. TasWater, or the public, the community, is paying 50 per cent more than it needs to get the job done.
It needs to be pointed out to TasWater that many people in Tasmania can do the work just as well as mainland companies. I hope that the process we have gone through with the committee makes them realise we have some really good people here and they do not need to, as he said, get a brain surgeon to sweep the floors.
Mr Hall - Quite a few disgruntled individuals and smaller firms spoke to me about the operations of TasWater, but they were loathe to make, as you say, public comment because they would lose their contracts. That was a real concern.
Ms Rattray - Let us hope that if upskilling is to be done, TasWater looks at letting Tasmanians undertake the work.
Mr Dean - That in the monopoly position they hold is not good enough.
Ms Forrest - A state-owned company is a monopoly position.
Ms Armitage - I am not speaking about the state-owned companies - I am talking about TasWater. The comment was that State Growth is much better at using evidence-based selection. Mainland companies are more likely to win tenders in the current TasWater thought process. They also pointed out that using smaller local firms keeps the money here. The feeling from the people who came to see me - they refused to allow me to use their names and they were very careful when they made appointments - is that TasWater goes to mates to do jobs. TasWater is doing lots with their own contractors. I asked TasWater and they did not want to know. These are comments I have received from people who came to see me. I am not saying a GBE would be any better. I am simply pointing out what has actually happened here with TasWater. The same person said -
The Government does not understand there is a massive amount of work involved in accelerating the timeframe for fixing TasWater under a Government takeover. TasWater would end up giving it to big companies like John Holland, given the scale and the time pressures. TasWater is using some fly-in, fly-out workers. TasWater has a pipeline of projects under a 10-year plan but does not follow the timeline.
He also mentions -
The Infrastructure Tasmania report underestimates the capacity in Tasmania for local firms to take on big projects. The industry could handle growth.
Another point raised with me was TasWater needs to stick to time lines for releasing tenders. They were saying that often a tender will go out and they will not know they have the job. They are waiting to see if they get the job, so they take on another job, only to find out a few months later that they have the job. All of a sudden they either have to put people off because they did not get the job, or have taken on other jobs and then do not have the capacity to do the job.
They were really concerned about how it worked and the decisions that were made. This was not just one engineer; several came in. They also said they believed that a lot of the staff were change-weary and people were retiring early. Change all the time is a concern in that situation. There was a culture problem at upper management level.
They said that there was a horrendous waste of money and indecision was a huge problem. TasWater told me what had happened at Bridport. I think it was 14 000 -
Ms Rattray - There were a lot of pipes.
Ms Armitage - It was a lot of pipes. I do have the amount here somewhere. A lot of pipe was purchased for the Bridport sewage treatment plant. The project fell over and all of a sudden there was a lot of pipe sitting there. I believe the pipe is now being used. According to the people who came to see me, the pipe was purchased, the job was on, and all of a sudden it did not measure up, the job was gone, but the pipe was still there.
I have a response from TasWater. It is only fair, when I come across it, to get their response. I was also advised that some senior TasWater engineers are fly-in, fly-out. They had some compliments, and I think it is worth mentioning some names. They said that Ray Wright is a brilliant senior engineer in TasWater. When people get credit, it is important to mention it.
They were concerned that no-one is scrutinising the decisions. A concern of Brett Woolcott from Woolcott Surveys concerned developers -
Developers being asked to locate and identify Tas. Water's own existing assets at the developers expense due to lack or inaccuracy of data in Tas. Waters own GIS systems.
He goes on. He raises many different points -
Launceston Combined Drainage System no longer able to accept any more stormwater into the combined system. Despite pre planning discussions with TAS Water this has not been brought to the general development community or general community knowledge. No further development allowed in the combined system area until there is onsite stormwater detention.
Black and White Implementation of policy and standards without regard to context, situation or discretion.
Increasing paperwork, forms and fees charged by TAS Water which has increased development time by months for standard projects. Extreme levels of red tape and bureaucracy.
There are a lot more issues there. It is available in the submission if anyone wants to read it. I will just read out the one out I mentioned earlier from TasWater. I will not say who it was from, but I thought it was really good. I had a constituent with an issue that had been going on for a considerable time. I sent it off to Mike Brewster. Give Mike his due, I have to say he has been excellent. I really cannot complain. He has taken them on. He has dealt with the issues and he has got back to me in a timely manner. I have been very impressed with Mike.
This came from someone at TasWater -
Thank you for sending this through. We have contacted [your constituent] directly and have confirmed that we will reimburse reasonable costs associated with the rectification works. That it took your escalation of the issue to our CEO is something from which I will take learnings and ensure these are conveyed to my team and more broadly as required.
Hopefully from our committee that is the type of thing that has gone through to TasWater. There are community concerns and if we can get some improvement and an email like this admitting it should not have happened was very good. I was impressed the person had the courage to write an email and say, 'We should have been better'.
With tenders, mainland firms are still doing the contacts, we are not buying Tasmanian. I have been told there is a chaotic tender process for the potable water towns. They would like to make sure the local industry do not get locked out. Stay local. The Kingborough sewerage at Blackmans Bay had 28 people flown in. I wonder about things like this. There are things I have received lately that I could not ask during the committee process, otherwise I would have. The comment was, if possible make sure local people do the work. Have a pipeline of work we can build up and give confidence so people can grow. In the industry, they say there is no confidence that TasWater will give locals work.
I was annoyed to read in the Brighton Community News, 'Legislative Council must do the right thing by Tasmanians'. That is insinuating that we might not be doing the right thing. Whether we vote something in or vote something out, we always try to do what we believe is in the best interests of the people of Tasmania. Just because someone does not agree with us, to say if we don't agree with them we are not doing the right thing - I do take offence at articles such as that.
There were many interesting comments made on both sides of the argument. The Government is saying they will get the work done cheaper and faster but did not say how much they would reduce management costs under a government takeover. Evidence from the Government and TasWater presented to this inquiry makes it hard to know whether TasWater would be more successful by paying for capital works through a higher amount of borrowing. Yet, the Government says mainland utilities like TasWater carry a much higher level of debt, 60 per cent. TasWater says it is trying to live within its means.
The member for Windermere made comment with regard to whether we should be looking to fund it now or people in the future to pay.
A developer who gave evidence said they need to upgrade existing infrastructure which is in perfectly good working order because it does not meet today's TasWater standards, adding thousands of dollars to development and making many developments unviable.
There was a good quote from the Master Builders' Association and it said -
MBT's only real concern with the government's proposal takeover of TasWater is that is if it is not handled properly, there may be no material change to the culture of the entity at the Board level and that decision making will be conservative, staid and relatively undynamic.
Boiled water alerts will come off in August 2018. I am not sure what other KPIs would clearly demonstrate one ownership model is superior to the other on the basis of evidence. It is hard for the public to know how one model is going to work better than the other. I do not know whether that was proven to us.
Hobart City Council in its submission quoted the state Government has assumed there will be a smooth transition to a government‑owned entity. This is a fair point; it is something we do not know. The Government was unable to show that it had models or could provide evidence for how it would manage a transition that did not meet its own time frames or expectations.
The Meander Valley Council commented -
These claims have not yet been backed by rigorous financial modelling. However, what has been clearly articulated is that it will cost $160M from consolidated revenue to support the proposed change.
This proposal must be evidenced by something more than just 'high‑level financial modelling from treasury'.
We also mentioned that the Economic Regulator said the Tasmanian Government was unable to provide evidence that there would not be potential for government interference. That came back to the Economic Regulator when we were discussing the fact that while the Government would take and listen to advice from the Economic Regulator, it was not going to be -
Ms Forrest - Sounds right.
Ms Armitage- Exactly. That was an important matter to remember.
Peter McGlone was very interesting; he was one of the people who came to see us at our hearings and provided a lot of interesting information.
Mr Valentine - He had an opinion.
Ms Armitage - He did. I have some comments from Peter McGlone. I will read out the answer from TasWater because it is only fair. I mentioned it had purchased 12 000 metres of pipes. It is important to read the answer out, what it was doing with the pipes. I mentioned the pipes from Bridport -
The pipes purchased for Bridport were for use in a recycled water scheme. The pipes were purchased on an approved business case, ready for project delivery at the time of the order. When final prices were received from tenderers for the construction of the reuse scheme, the prices exceeded the business case and it was not viewed as viable to progress the project.
Pipes can be reused on a variety of different projects. To date, out of the 12000 metres of pipes purchased, 3430 metres have been used on a variety of projects, 5000 metres have been allocated for the Wynyard Fonterra transfer pipeline, and TasWater has an opportunity to use the remaining pipes within the Regional Towns Water Quality Program.
While I am very pleased they are re‑using them, I take on board the comments from the person who made the complaint that they were purchased and set aside, and then the project did not proceed.
LGAT and the Treasurer have been covered by many people.
The Property Council was very interesting. Mr Rockefeller was quite entertaining at the committee. He and Mr Wightman provided a lot of information. They were very good and obviously in favour. They quote their submission that -
Holistic, strategic water management for the state is the highest priority. It is also essential that regional and remote communities are not left behind by present and prospective TasWater ownership models.
This prospective ownership model presents clear opportunities for these communities to be protected. It is critical that the reform of TasWater is not halted and it becomes a GBE sooner rather than later, and we look forward to the future.
Ms Forrest - Mr Rockefeller also said in a briefing that the more interference in pricing by the government, the better. I cannot say I agree with him on that.
Ms Armitage - The raw sewage problem in Launceston has been mentioned by several members. I am not saying it is a crisis but I believe the matter is urgent and that we have Third World conditions with our river at flood times when raw sewage enters the Tamar River.
Time is of the essence. It is my belief we can have a good river in time if this work can proceed. The Tamar River is critical to the destination appeal of northern Tasmania - not only the quality of the river, but also visitor and local access to the river via the foreshore.
I am sure many of you read Jim Collier's letters to the editor. He sent us a letter yesterday and I have received another one today. It says -
Good Elected Representatives of the People!
You are aware of the serious and devastating environmental degradation of the Tamar River.
You are also aware that a significant contributor to the River's demise, but not the only one, is the totally inadequate and archaic sewage infrastructure of Launceston.
TasWater has been aware of this for many, many years but have failed to act to rectify this totally unacceptable and deplorable situation.
Treasurer Peter Gutwein has 'promised' to address the problem within a significantly shorter time frame than that given by TasWater IF the state government assumes their control.
I also ask you to consider what has to be the most efficient organisation, one with just one single owner or 29 all with their own agenda?
For the sake of the Tamar and what could, and should be, the pride and joy of Launceston, as well as the whole of Tasmania, I urge you to support the governments proposed takeover of TasWater!
I have a letter from another resident of Launceston -
I hope our three Legislative Council members representing the Greater Launceston area are aware that if improvements are to be made to the area's sewage disposal, it is unlikely to happen in the short term under TasWater's present management.
It goes on -
Launceston's sewage woes are the culmination of seven schemes along headwaters that finally drain into the Tamar and so should attract sympathy from MLCs representing those areas. Launceston, as the regional premier city, is the centre for much activity in that region: sporting provisions with York Park Stadium, Windmill Hill swimming centre and the Velodrome, arts and cultural activities at the QVMAG and Princess Theatre, and educational provisions at tertiary level at the university, including the Maritime College and TAFE.
As such, it has a strong case to mount for immediate attention to the parlous state of the Tamar as a result of the great quantities of human waste directed into the river.
I will read out an email as well from October 2015 because I believe it is relevant. I have some for the other side as well, they are not all in favour of the government takeover. This email is from the previous general manager of the Launceston City Council -
The thing is that the 29 owner representatives have found they have little if no influence. We also have raw sewage continuing to enter the Tamar in storm events. This is unacceptable in a civilised community in the second half of the second decade of the twenty-first century. There needs to be additional investment into consolidating the inefficient and aged wastewater treatment plants in Launceston to a new purpose-built tertiary treatment plant.
However, the Economic Regular has refused price increases proposed by TasWater because TasWater cannot deliver its current level of capital works, yet claims more needs to be done to bring the water and sewerage infrastructure up to standard.
These are major issues for TasWater, but equally for all Tasmanians. It's simply not good enough from an organisation that has promised much but is yet to deliver on many of these promises.
I accept my electorate of Launceston is probably one of the areas that has most to gain from a government takeover. We have struggled with the sewage that goes into the Tamar River. When I was on the council, and probably when the member for Windermere was on the council, we had battles with TasWater over the joint sewer and water pipes and the payment at that time of the $5.8 million requested from Launceston City Council. That was reduced considerably after mediation. My opinion at that time, which remains the same, was that if you take assets, you take liability. If you take over the assets of a council and you are aware you have joint sewer and water pipes, you also get the liability that goes with it.
The comments from the Meander Valley Council have been read out by the member for Rosevears. We got a submission to our committee on 5 September from the council to say -
(we do) not support the State Government's proposal to take control of TasWater for the following reasons:
This is one of my councils; I have two councils in my electorate, the Meander Valley Council and Launceston council -
(1) The lack of adequate and appropriate information being made available.
(2) The uncertainty that the dividend guarantees of the state government will actually be honoured by the state government or future state governments.
(3) Concerns regarding the future viability of TasWater over the state government proposal.
(4) It does not appear to be in the best interests of the Meander Valley community.
Craig Perkins goes on -
What started as a 'crisis' requiring urgent action finally settled on the promise that the State could do it faster, better and cheaper.
The State Government claims that the existing ten year capital works program can be reduced to five years; they will reduce the increased cost of water bills; there will be no material impact on the revenue currently received by the company's shareholders.
These claims have not yet been backed by vigorous financial modelling. However, what has been clearly articulated is that it will cost $160 million from consolidated revenue to support the proposed change.
He goes on -
Our view is that such a significant investment and disruptive change must be based on an unequivocal business case.
Further in his letter, he says -
It is therefore imperative that the Committee must be completely satisfied that the claims and re-assurances that Tasmanian Government claim the changeover will support are valid.
It is my view that the Committee, if they believe the change in ownership is warranted, request or commission longer term financial modelling to support the change of ownership argument, and demonstrated it is in the best interest of all Tasmanians.
It is probably along the lines the member for Windermere was trying to get an adjournment for earlier, to actually have an independent modelling done.
Craig Perkins, the mayor of Meander, says -
In conclusion, I suspect most Tasmanians would rather the $160 million of government spending be committed to essential health and education needs, rather than based on the best information available so far. It looks to be at least, at best, a two to three year reduction in capital works timeframe.
I was really disappointed with the submission from the Launceston City Council.
Ms Rattray - There was not one, was there not?
Ms Armitage - There was. There was a submission but -
Ms Rattray - It was a fence-sitting one.
Mr Dean - Because that is what I would say it would be.
Ms Armitage - Unfortunately they were getting splinters.
Ms Armitage - In fairness, the general manager had left at that stage. If Robert Dobrzynski had still been there, I am quite confident we would have received a submission. They had an acting GM and it is a lot more difficult to be putting something forward. They did put a submission in and just a few comments from this -
The disconnect of a water and sewerage business from an holistic catchment management perspective has the potential and, experience would suggest the result, of delivering sub-optimal outcomes in terms of public amenity, recreation use and the environment in general.
These outcomes are particularly evident in the Tamar Valley where the North and South Esk rivers meet after flowing over a significant land area across multiple municipalities. Addressing sewage flows and the treatment which is a key objective of the water corporation is a critical component of improving environmental outcomes but it is not the whole solution.
The final paragraph says -
The Council has not adopted a formal position as most other Councils have and has, instead chosen to listen to the options that are being debated. Ultimately it will be the ability to bring the various parties together with the necessary financial resources that will be the determinant of optimal outcomes for the State.
I must admit that I gained very little from that submission.
Salaries were raised from time to time and we asked about them during the inquiry. It was mentioned to me on occasions that senior executive salaries at TasWater come to $2.781 million, with one person receiving over $400 000; two over $300 000 and five over $200 000. I am not sure under a GBE it would be any less. That is one of my concerns.
I mentioned it because it has been mentioned to me by a variety of constituents when they read annual reports.
When we raised it during the committee, we were told that was the standard across Australia; however, as mentioned by the member for Windermere, salaries are lower in Tasmania.
Mr Dean - It is hard for the poor old consumer to accept when they are doing it tough.
Ms Armitage - It is, when they see that the CEO is getting almost $500 000 for TasWater and we have raw sewage in the Tamar. They find that difficult. Half-a-million dollars for the board - $519 000.
I see those issues, but I am not sure that under a GBE it would be any different. We have for GBEs similar figures. It is of concern to the community, whether it be a GBE or TasWater, that we have such salaries.
It is worth reading out parts of a couple of the submissions we might not have had in our report. We received a very good submission from Lyndon Stephenson. He says -
I was impressed with the council owned model which had worked well for Hobart Water.
I believe that members know this gentleman -
I don't think I had influence but I was against a GBE model since that structure seemed to suffer from either excessive political interference or else benign neglect.
My case in point was that the Hydro Electric Commission had worked well as a largely independent commission. It kept a tight rein on costs and produced excellent work.
When it split up into three government owned business, Hydro, Aurora and Transend, things became very different.
Hydro was used by the Government for cash purposes and was not able to plan well for Tasmania's energy future. Transend decided to heavily re‑inforce its system. Aurora proceeded on a wasteful purchase and upgrade of the Bell Bay Thermal station in a futile attempt to have its own source of electricity.
The result of all this was a large waste of capital which still has to be serviced. With now three organizations operating costs have surged and Tasmania has gone from having nearly the cheapest power in Australia to having nearly the most expensive.
The submissions I read out are available online.
I will make a quick comment about trade waste. We received quite a lot of submissions about trade waste. In its annual report TasWater said -
At the end of the 2016-17 financial year, 75 per cent of our almost 4,000 commercial customers had been inspected under our statewide Commercial Compliance Program.
TasWater works individually with these customers, assessing their business activities for trade waste and pre-treatment systems. Once assessed, we give our customers 18 months to implement any required changes, up to five times longer than comparable interstate water utilities.
The people who came to us and the people who came to me in Launceston are probably the ones who found it difficult to put in their systems. They were people who might have had bluestone foundations and older property. It was absolutely impossible.
I see TasWater's point, but the ones we are seeing are people who are going to have difficulty. I was pleased to see that when we did meet with Mr Brewster and Mr Hampton, it was acknowledged that there might have been at times a lack of flexibility.
Ms Rattray - And overzealous TasWater people who were putting forward TasWater's requirements.
Ms Armitage - The member for McIntyre is quite right. If anything has come from this committee inquiry, it is that these issues have come out and there has been more flexibility in working with people to try to find something that would help them meet their needs. The member for Murchison mentioned at one stage someone in your area with trade waste. That is important.
I should read something from the Treasurer -
The Government has received numerous representations and correspondence from business across Tasmania which suggest that TasWater is issuing notices demanding businesses install deemed-to-satisfy pre-treatment solutions and not offering those businesses the option of designing an alternative performance solution that would be better suited to the specific characteristics of the business and trade waste produced at a lower cost. The issue appears to be affecting low- to medium-risk trade waste customers that are required to pre-treat waste before it can be accepted to the sewer. These customers are typically small businesses.
One of the things we found was that they were small businesses that did not have the ability to put in a big system. They did not have the room.
It was also interesting also to hear from Wes Ford from the EPA. He stated -
We are not the regulator of trade waste and we don't have technical experience in this area.
We were talking about Grease Guardians at one stage. Initially when he spoke with us he could not see a problem. When we delved into it a little bit further, while Grease Guardians were accepted by some people, they were not the preferred case. They could be turned off; if they had a breakage, they could be bypassed. There were quite a few reasons TasWater preferred not to go with them. However, they allowed some of their customers to use them.
This is from the Examiner of 21 July. It is probably typical of the businesses that would have had to put the system in. Someone from Launceston's Fitzies City Cafe said -
Because of the time difference from when this place was originally built to now's standards, a lot has changed within council and there's TasWater involved with grease traps and grease pits. So it's a combination of things you've got to weigh up and make final decisions on … Unfortunately this is not an easy one at all.
This was the old Fitzgeralds. Harris Scarfe was closing its cafe. It was much the same with Townsend's Bakery closing after more than 40 years. Getting close to retirement they did not want to spend that much money. The Examiner said -
After more than 40 years of whipping up the finest baked confections Leigh and Debra Townsend are closing the doors on Townsend's Baker. Announcing the news on Thursday Mr Townsend said the decision to close came as health food regulations would require a costly upgrade of about $30 000 to the premises.
That was something I heard, and I am sure many other members heard that small businesses did not have the ability or the room. Continental Cakes put in a submission. One of its problems was it did not have the room for a grease trap. It wanted to put a grease guardian in but was not having success negotiating with TasWater. I am hoping it has had success. It was a common theme that these small businesses did not have the ability.
Baking Associations of Tasmania said -
Our members cannot believe that at no time has there been any consultation with business owners and what the outcome will be if forced to install new or larger grease traps. Many of our members have gone to lengths to follow up with other options to assist with water or waste removal so that their business will survive the extreme cost that TasWater place on the proposed changes. One of our members in Scottsdale is faced with having to dig up their main dining area of the bakery to install the proposed grease trap at an estimated cost of 20k‑30k dollars
I believe that may have been resolved.
Ms Rattray - No, it is not resolved. It is progressing, but not resolved. Some positives.
Ms Armitage - I have a few of those and I will not go on. The main point is that it is not only the cost to small businesses - it has been the room. Some of these small premises might have bluestone foundations. There was the little takeaway in Charles Street. The owner phoned me to say that the person who was leasing could not speak very good English and was told to go to the website, but still did not understand. They had no way of being able to put one in because there was simply no room in the little area he leased. They did not know what they were going to do. I have not been back to them of late to find out what they are going to do, but they were very worried they could not meet the requirements because they could not fit it in and they could not afford to do it.
Mr Armstrong - There are quite a few of those.
Ms Armitage - I think there are quite a lot. I understand TasWater saying, 'All these other people have complied, why should we let these other ones escape or negotiate?'. I accept that. Flexibility is important for these people who would conform if they could, but simply do not have the ability.
Obviously, we had a lot of submissions from a variety of people on both sides, many who agreed there should be a takeover and many who did not think there should be. A submission from the TCCI, and another local mayor who, when asked live on ABC Radio about Launceston City Council's support of the change in ownership of TasWater, commented that -
Launceston has more to gain by the change in ownership because of their Third World sewerage systems.
All we can glean from this comment is there is clearly no acceptance of the need for a view beyond the owner's own municipality.
Mr Dean - Queenstown has a similar system.
Ms Armitage - From having been a member of Launceston City Council, I always felt we were never considered to be inside the tent with many councils. It was not always the friendliest situation.
Mr Dean - We have the biggest council. Launceston is the biggest council in the state, so they should -
Ms Armitage - I realise that. The TCCI continues-
We believe a new model would improve TasWater's ability to lift the capacity of Tasmanian businesses. Under a GBE model, TasWater would be able to think and act on a broader state level. This is particularly relevant regarding skills growth. We must ensure that the majority of work contracted by TasWater in the planned upcoming $700 million plus projects is undertaken by Tasmanian businesses.
This was a point raised with me by a couple of the engineers. While they did not say whether TasWater should be taken over by the Government or not, the concern they had was whether there might be a boom or bust. That was a bit of a worry to them - that a whole lot of work could come, and all of a sudden, there might be no work.
As they said, they did not care who owned it. They simply wanted to be able to get some local work and for it to continue, rather than have a whole heap of work and then none. That was a real concern to them. Another submission from a gentleman -
TasWater is a separate body from the Government which is responsible for water and sewerage only. They are getting on with the job in a timely manner, financed with their own department, and should be allowed to get on with the job that they know best. If the Government should take over TasWater, finance would have to come from somewhere, and would no doubt be stripped from other Government-run services. That would further put in crisis services that are already in crisis. In my opinion, we cannot allow TasWater to be added to these crises under Government control. This Government takeover must be rejected at all costs.
Mr Dean - Some people do not quite understand.
Ms Armitage - No, but it is good to read and importantly we need balance. We need to share some of those against as well as in favour. The THA obviously is supporting its members. Most of their members had issues to do with trade waste.
One my concerns was the THA and maybe some businesses thought that if the state Government did get in, they would not have to necessarily conform to the trade waste, but, of course, they would regardless. That is something important to remember: there is an obligation on TasWater to conform with trade waste requirements. Regardless of whether it is state Government-owned or TasWater-owned, everyone really has to conform.
TasCOSS was interesting. Obviously, its main concern was the cost. It was well represented by the member for Windermere when he read out Mr Bullock's letter. That is true. I might use $19-worth of water, but my bill might be $260. Times that by four for someone in a small home, paying as much for their water as for their rates - that is a real concern. It was good to get a submission from TasCOSS. We must not forget there are many people who are struggling.
Another comment I have come across is from Brian Wightman of the Property Council -
Tasmania is at a unique point in its history with significant prospects to generate local economic activity through capitalising on the opportunities which have presented. It is now a time for boldness and calculated risk-taking to lock in the improvements, but more importantly to create a continuous economic loop which will grow the prosperity of the State. The Property Council remains adamant that Tasmania must continue to run hard and fast to drive economic growth.
We had 54 submissions and 48 findings.
I would like to read a couple of the comments by Peter McGlone from the Tasmanian Conservation Trust, who makes some very good points -
More recently the Treasurer has claimed businesses are being unfairly expected to upgrade their trade waste management to meet contemporary standards set by the EPA. The Treasurer has not specifically promised that any businesses will get a better deal under his government's management of TasWater, just that TasWater is being heavy handed with its treatment of business customers. The Treasurer has not specifically ruled in or out changing the rules to allow some businesses to avoid having to upgrade trade waste systems.
In his final paragraph, Mr McGlone says -
If the state government's take-over is to be supported, the Treasurer is obliged to make commitments to the Legislative Council and Tasmanian public that are clearly defined, feasible and measurable. Rather than just repeat his often stated mantras that the state government will fix TasWater and give Tasmanians the services they deserve, the Treasurer is obliged to define exactly what the relevant benefits will be, what they will cost and when they will be delivered.
Mr McGlone was very good at the hearings, and I am sure other members felt he provided a lot of information to us.
LGAT was there representing the councils and as it put in its submission -
At the LGAT Special General Meeting of 11 May, 2017 a clear majority of Members (24 of 29 councils, with one more since resolving to support the LGAT motion) determined that 'there is no water and sewerage crisis' and to 'reject the proposed State Government ownership of TasWater and, through LGAT, urge the State Government to work cooperatively with LGAT, councils and TasWater on the optimal water and sewerage infrastructure upgrade program to achieve the best outcomes for councils and consumers'.
LGAT has a job to do and is there to represent its councils.
LGAT, the Treasurer, and TasWater were all very willing to come along and spend a lot of time in the hearings. It was very pleasing to see they were available at any time. If we sent a letter off for comment, we got a response very promptly. It was very much appreciated by the committee.
It is probably worth reading out a comment from the TFGA -
The TFGA has concerns that the principals of water reform in Australia could be undermined by the proposed State Government take-over of TasWater. As a concept, the TFGA acknowledges that significant efficiencies can and need to be found through practical solutions for cost rationalisations at both operational and administrative levels. However, the TFGA has concerns that if TasWater were to become in effect another State Government Department or GBE, that the inevitable cost rationalisations could reduce operational effectiveness.
In closing, I hope, from our committee, that TasWater will appreciate it has some problems, that there are some issues and, if there were not issues, that the Government would not have been seeking to take it over. I also hope TasWater will look to address those issues. I am quite sure, from the meetings and hearings we had with both Mr Brewster and Mr Hampton, that they are now aware there are some concerns. It appeared they would address the issues we had. My previous experience with Mr Brewster is that the many issues I have taken to him have been dealt with in a very timely manner. He has phoned, gotten back to me and responded in writing. It has been much appreciated that he really has taken on board the concerns that we raised with the committee. It is a difficult decision - difficult and an extremely important decision when we are looking at a body with $2.1 billion worth of assets.
As I said one of my councils is against the takeover and the other I believe is in favour, or they are basically sitting on the fence with their submission. The real question is whether the concerns and problems I keep hearing from my constituents, such as tendering, development work, easement issues, cost of water used as opposed to other costs, trade waste compliance and the list goes on, whether there will be any difference under a GBE. Should this be about TasWater ownership or about the appropriate working of our water and sewerage entity for our community? I do not believe the Government have approached this in the best way. I fully admit there could have been a better way to have gone about this, and I would like to see both levels of government working together, that is local and state with the support of the Australian Government to benefit our assets, TasWater and our communities. I will support the second reading and get the bill hopefully into Committee as I am aware there is at least one proposed amendment coming up and perhaps others.