State intervention

Two Australian states have recently announced a restructure of their water industry. Queensland's restructure was announced in 2008 and is now underway. Tasmania's is more recent. The Tasmanian Government has now withdrawn its offer to guarantee revenue to councils during the transition to a new water and sewerage system.

The Treasurer announced the decision last night, pending further discussions with councils about the rebate scheme for pensioners. Michael Aird offered the revenue guarantee last week after councils expressed doubts about adequate financial returns under the water and sewerage changes.

But councils are also worried about having to foot the bill for the rebate scheme for pensioners, instead of the State Government. Hobart's Lord Mayor Rob Valentine says it is sensible to withdraw the revenue guarantee while the issue's resolved. "The government's to be applauded for pulling it to be quite honest," he said. Mr Aird now wants to discuss the issue with the Local Government Association. "It gives some time for further discussions to be had without this letter being on the table."

The water and sewerage changes are due to take effect from July 1.