Tasmanian Bills Clause Notes Tasmanian Bills Clause Notes[Index] [Search] [Download] [Bill] [Help]
CLAUSE NOTES
Water and Sewerage Tasmania Bill 2017
PART 1 - PRELIMINARY
Clause 1 Short title.
Clause 2 This clause provides for the Bill to commence on a day or days to be proclaimed. It is
intended that all of the provisions of the Bill will commence following the Bill receiving
Royal Assent, with the exception of clause 34, once the council-owned TasWater has
competed its final tasks.
Clause 3 Contains the interpretation provisions.
Clause 4 This clause provides that this Act overrides the Government Business Enterprises Act 1995
to the extent of any inconsistency.
PART 2 - ESTABLISHMENT OF WATER AND SEWERAGE TASMANIA
Clause 5 This clauses establishes Water and Sewerage Tasmania (the Corporation).
Clause 6 Sets out the objectives of the Corporation, which include the efficient and effective
provision of water and sewerage services and to ensure sustainable investment in water
and sewerage infrastructure.
This clause also provides that the requirements in section 7(1) of the Government
Business Enterprises Act 1995, namely that Government Business Enterprises must
operate in accordance with sound commercial practice and achieve a commercial rate
of return, do not apply to the Corporation.
Clause 7 This clause sets out the functions of the Corporation.
Clause 8 This clause allows the Treasurer and the Minister to jointly issue directions to the
Corporation in respect of any matter related to the performance of the Corporation’s
functions or powers under the Act. The Corporation must comply with a direction issued
under this section. Any direction issued under this section is required to be published on
the website of the Corporation until such time as the next annual report of the
Corporation is published in accordance with the Government Business Enterprises Act
1995.
Subclause (7) provides an indemnity by the Crown to any person acting on behalf of the
Corporation against any liability incurred as a result of acting on a direction given by the
Treasurer and Minister, provided that the action was taken in good faith and was
necessary to implement the direction.
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Clause 9 This clause prevents the privatisation of the Corporation.
The clause also prevents the Corporation from selling, leasing or otherwise disposing of
its water and sewerage infrastructure or land, except, in the case of its infrastructure, if
the sale, lease or disposal relates to or arises from the maintenance, repair, replacement
or upgrade of water or sewerage infrastructure.
Subsection (4) ensures that the provisions in the Government Business Enterprises Act
1995 that relate to the transfer of property, rights, liabilities and assets do not operate
to override the operation of this section.
PART 3 - PAYMENTS TO COUNCILS
Division 1 - Transition period payments
Clause 10 This clause requires the Treasurer to pay, to each council specified in Schedule 1, the
amount specified for that council in the Schedule in each year for seven years from 2018-
19. These payments, totalling $20 million, are to be paid from the Consolidated Fund by
30 April.
The payments to councils are to be reduced in 2018-19 if a council liability or cost is
declared by the Treasurer and Minister under section 25(3). Section 25 allows such a
declaration to be made if TasWater, which is defined in the Bill as the council-owned
company, has incurred a liability that is not in the ordinary course of business before the
day its assets are transferred to the Corporation or if, after that transfer, it incurs a cost
or expense that is not considered to be reasonable.
Division 2 - Payments after transition period
Clauses 10 to 14 set out the arrangements for payments to the councils from the
Corporation for every year after the period when the councils receive payments from
the Consolidated Fund as set out in Clause 10.
Clause 11 This clause requires the Corporation, for each year from 2024-25, to specify in its annual
report an amount equal to half its profit for the year to which the annual report applies,
defined as the standard total payment to councils. This amount is to be zero if the
Corporation does not make a profit for that year.
The Board of the Corporation may also include a different amount to half its profit,
defined as an adjusted total payment to councils, if the Board is of the opinion that to
make the standard payment to councils would prevent the Corporation from meeting
its objectives, requirements and statutory obligations, or if payment of the standard
payment to councils would result in the liabilities of the Corporation exceeding its assets
or materially prejudice its ability to pay its creditors.
If the Board designates an adjusted total payment in its annual report, it must include a
statement of reasons for including that amount.
Clause 12 If an adjusted total payments amount is included in the Corporation’s annual report, the
Treasurer must, within three sitting days following the tabling of that annual report, make
an adjusted payments order and lay the order before each House of Parliament.
The order is to specify the amount of the adjusted total payment and include the
statement of reasons.
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Clause 13 This clause provides that an adjusted payments order is disallowable by either House of
Parliament. The clause allows the adjusted payments order to be considered for
disallowance in the calendar year after the order is tabled. This is to allow members of
Parliament to have the opportunity to examine the order and raise any issues with the
Corporation during Government Business Scrutiny Committee hearings.
Clause 14 This clause provides that the payment to each council from the Corporation must be in
accordance with the proportions specified for each council in Schedule 1.
The amount to be paid to councils is the standard total payment amount or, if an adjusted
payments order has been made by the Treasurer and has not been disallowed by either
House of Parliament, the amount specified in the adjusted payments order. If either
House of Parliament disallows the adjusted payments order, the Corporation must pay
councils the standard total payment.
Payments made in accordance with this section must be made out of the Corporation’s
retained earnings and must be made between 1 April and
30 April in each year, except when there are insufficient sitting days in March for either
House to consider the order, in which case the payment is to be made within 10 business
days after the first five sitting-days of the year.
PART 4 - INFRASTRUCTURE INVESTMENT
Clause 15 This clause requires the Corporation to prepare a 10 year infrastructure investment plan
at the same time as it prepares its corporate plan in accordance with the Government
Business Enterprises Act 1995. The objective of the infrastructure investment plan is to
promote efficient long term investment in water and sewerage infrastructure. The
infrastructure investment plan is to be in a form specified in Treasurer’s Instructions and
must be consistent with the Corporation’s ministerial charter.
The plan is required to be approved by both the Treasurer and the Minister and,
following its approval, the Corporation must publish the plan on its website.
Clause 16 This clause sets out the process whereby an infrastructure investment plan can be
amended.
Clause 17 This clause requires the Corporation’s corporate plan to be consistent with its
infrastructure investment plan.
Clause 18 This clause provides that any references to the long term objectives of the Corporation
in the Government Business Enterprises Act 1995 are to be modified to take into account
the infrastructure investment plan of the Corporation, as well as any directions issued by
the Treasurer and Minister under the Act.
PART 5 - TRANSITION FROM COUNCIL-OWNED COMPANY TO CORPORATION
Clause 19 This clause provides for the transfer of the assets, rights and liabilities of the council-
owned company to the Corporation on the transfer day, which is a day to be declared
by the Treasurer.
The Corporation, from the transfer day, becomes the legal custodian of all of the assets,
rights and liabilities that vest with the Corporation as a result of the transfer. Any
reference in any Act, in any instrument made under any Act, in any contract, agreement,
arrangement or undertaking, or in any document that refers to the council-owned
company or any predecessor of the council-owned company, is taken to be a reference
to the Corporation.
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Any legal or other proceedings that relate to the council-owned company and which
have commenced, or could have commenced, before the transfer day are taken to be
proceedings against the Corporation.
The Corporation is not liable for any tax under any State law that arises from the transfer
of an asset, right or liability under this section.
Clause 20 This clause provides that the Treasurer, by notice to an employee, may transfer an
employee of the council-owned company to the Corporation. Prior to transferring the
employment of an employee of the council-owned corporation, the Treasurer is to give
notice to the affected employee.
This clause allows employees to be transferred to the Corporation before the day that
all assets, rights and liabilities of the council-owned company are transferred.
On the day an employee is transferred, that employee ceases to be an employee of the
council-owned company and to be employed by the Corporation on the same terms
and conditions as he or she had with the council-owned company prior to the transfer.
The transferred employee is not entitled to any further compensation by virtue of any
transfer under this section. In addition, any employment award or agreement for a
transferred employee continues and an employee’s period of service with the
council-owned company, prior to the transfer, is taken to be the equivalent period of
service with the Corporation following the transfer.
Subclause (8) clarifies that a transfer under this section does not prevent employment
terms or conditions from being altered by future awards, agreements or law.
A transferred employee is taken to be an employee for the purposes of the Public Sector
Superannuation Reform Act 2016. This ensures that any employees of the council-owned
company that are members of the State Government’s defined benefit scheme will
continue to be members of the scheme following the transfer.
Clause 21 This clause clarifies that an environment protection notice that was in force prior to the
transfer day continues to have effect. A permit granted under clause 3 of the
Environmental Management and Pollution Control Act 1994 is also taken to be in force in
relation to the Corporation.
Clause 22 This clause provides that the Treasurer may request a person to provide information,
advice or assistance to the Treasurer for the purposes of this Act. The persons to whom
this clause applies are directors, employees, officers and agents of the council-owned
company, and the company itself.
A person to whom a request is made under this section is indemnified by the Crown
against any liability incurred by the person as a result of acting upon a request by the
Treasurer under this section, provided that the action was taken in good faith.
Clause 23 This clause clarifies that, on and from the transfer day, the council-owned company
ceases to have the functions of providing water and sewerage services, and any
associated obligations.
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Clause 24 This clause provides that, for a period of three months after the transfer day, or longer
if specified by the Treasurer, the Corporation will pay all of the costs of the council-
owned company. The Corporation, in its first financial statements, must specify the costs
incurred by the Corporation under this section.
Subclause (5) requires the council-owned company to make its annual report for the
2017-18 financial year available to the public within three months after the end of that
financial year.
Clause 25 This clause provides that any unreasonable liabilities that the council-owned company
has incurred between the day prior to the Bill being introduced into Parliament and the
transfer day may be declared by the Treasurer and Minister to be a council liability.
This clause also provides that if an unreasonable cost or expense is incurred by the
council-owned company after the transfer day and within the period when the
Corporation is liable for all the costs of the council-owned company, the Treasurer and
Minister may declare those costs to be a council cost.
The clause provides that any council liability or cost, as declared, is to be deducted from
the total amount payable to the councils by the Corporation under section 10 of the
Act. An amount equivalent to the reduction in the total amount payable to councils
under section 10 may be transferred by the Treasurer to the Corporation.
PART 6 - MISCELLANEOUS
Clause 26 This clause declares that any provision of the Water and Sewerage Tasmania Act that is
inconsistent with the Corporations Act 2001 is a Corporations legislation displacement
provision for the purposes of the Corporations Act. The effect of this provision is that
the relevant Corporations Act provision will not operate to the extent of any
inconsistency with the provisions in the Water and Sewerage Tasmania Act.
Clause 27 Provides that the Corporation can only borrow from the Tasmanian Public Finance
Corporation.
Clause 28 This clause provides that the provisions in Parts 10 and 11 of the Government Business
Enterprises Act 1995 that relate to the payment of income tax equivalents, guarantee
fees and dividends do not apply to the Corporation. The effect of this clause is that
there is no requirement on the Corporation to pay any returns to the State Government.
Clause 29 This clause provides that where, in the Government Business Enterprises Act 1995, there
is a reference to both the Portfolio Minister and the Treasurer and this is the same
person for the Corporation, the Portfolio Minister is to be the Minister responsible for
the administration of the Water Management Act 1999. This clause ensures that there
will always be two Ministers with responsibilities for the Corporation in respect of
powers and functions under the Government Business Enterprises Act 1995.
Clause 30 This clause ensures that any action undertaken in accordance with this Act, or
undertaken under any direction or request under the Act, does not terminate or modify
any existing contractual arrangements.
Clause 31 Sets out the regulation-making powers.
Clause 32 States that the Treasurer is responsible for administration of the Act and that the
department responsible to the Treasurer in relation to the administration of the Act is
the Department of Treasury and Finance.
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Clause 33 Provides that the legislation in Schedule 2 is amended as specified in that Schedule. The
effect of this clause is that the Corporation is a Government Business Enterprise.
Clause 34 Provides that the legislation in Schedule 3 is repealed.
SCHEDULE 1 PAYMENTS TO COUNCILS
This Schedule prescribes the amount of transitional payments to each council and the
proportion of payment amounts to councils from 2025-26.
SCHEDULE 2 CONSEQUENTIAL AMENDMENTS
Amends Schedule 1 of the Government Business Enterprises Act 1995 to insert Water
and Sewerage Tasmania.
SCHEDULE 3 LEGISLATION REPEALED
Provides for the repeal of the Water and Sewerage Corporation Act 2012.
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