TasWater questions legality of State Government’s bid to take over water utility
The State Government’s proposed forced takeover of TasWater is not legal, according to advice received by the Tasmanian water utility.
The Government intends taking ownership of TasWater, which is owned by the state’s 29 councils, from July next year.
TasWater chairman Miles Hampton said at the heart of the issue was whether the State Government could legislate to override the Federal Corporations Act.
“It’s a reasonably simple issue,” he said.
“TasWater is incorporated under the federal legislation — the Corporations Act — and, as I understand it, state law cannot override federal law.”
He said the advice provided a clear indication that any state law could be subject to challenge under section 109 of the Australian Constitution.
The Government announced its intentions to assume control of the corporation amid concerns about ongoing “boil water alerts” in more than 20 towns around the state.
Treasurer Peter Gutwein, who is also the Local Government Minister, was highly critical of TasWater’s 10-year plan to redress the issue.
Tasmanian councils voted against the proposed takeover last month.
Facing question at today’s budget estimates hearing, Mr Gutwein said he believed the planned takeover was legal.
“This is not only lawful but that there are no legal impediments,” he said.
In a heated exchange with Labor MP Scott Bacon, he said he was not aware of TasWater’s advice.
“I’ve taken advice from a range of sources,” he said.
“I received advice about the takeover, including from Treasury.”
Mr Gutwein was asked whether he received advice from the Solicitor-General.
“I took advice that enabled me to form the view that what we are doing is able to be done,” he said.
“TasWater was created by an act of Parliament and we will be introducing legislation in Parliament to take it over.
‘If illegal, takeover bid should be dropped’
Mr Hampton said if the takeover was not legal then TasWater should not need to take legal action.
“We will take what steps are necessary to protect the shareholders of TasWater and to protect the current ownership model,” he said.
“We have a genuine desire to see this matter closed.
“If it is not legal then legislation should not be introduced into Parliament [to allow for the takeover] and we should not have to give further consideration to legal action.”
TasWater chief owners’ representative David Downie said it was “extraordinary” the Government had proposed a course of action that might not be legal.
“If the Government has not obtained legal advice, it is obviously important that they do so before they introduce legislation into Parliament,” he said.
Local Government Association of Tasmania (LGAT) president Doug Chipman said he was concerned about the implications for Tasmanians if the legislation was subjected to an expensive legal challenge.
“We have never understood the Government’s hostile and aggressive takeover of TasWater,” he said.
“They have spoken about a crisis that does not exist.
“TasWater has an excellent plan in place to upgrade the sewerage networks across Tasmania.
“We have repeatedly offered to cooperate with the Government to ensure that Tasmanians interests are best represented and we have had no interest from the Government in a cooperative approach to this.”