Privatisation Plan would cause soaring water rate bills

Tamihere’s Watercare privatisation Plan would cause soaring water rate bills

John Tamihere’s plan to sell off half of Watercare to investors will force up water rates substantially and burden lower income families with high costs, says Auckland Mayor Phil Goff.

Tamihere let slip his privatisation plan at a candidate’s debate this morning hosted by the North Harbour Club.

“Privatising Watercare, whose assets are valued at around $10 billion, would force up the cost of water rates with any investor seeking a 7 – 10% return on their investment,” said Phil Goff.

Watercare currently is required by legislation not to pay a dividend and to provide water at the lowest reasonable price.

“Pushing up water rates would hurt families that use more water and place a heavy burden on those on low incomes. Water rates are in effect a flat tax which means those on lower incomes pay a much higher proportion of their incomes,” Phil Goff said.

“Privatising a monopoly does not make sense when an essential service is effectively a monopoly. Taking it out of the public sector where there is more public accountability is the wrong way to go.

It contradicts Mr Tamihere’s previous statements that CCOs should be under closer control by Council. Privatisation does the opposite.

“Watercare is a well-run organisation which provides an essential commodity efficiently and at a relatively low cost. It is regarded by Government as the most effective water provider organisation in the country. It doesn’t make sense to mess with its ownership and structure which could put this at risk and cause big rises in water rates,” Phil Goff said.

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