24 Feb 2026
Water and sewerage upgrades essential to unlocking new homes for Hobart
New homes across greater Hobart could be delayed without continued investment in water and sewerage infrastructure, TasWater says, as the Tasmanian Economic Regulator considers changes to the utility’s proposed Fifth Price and Service Plan (PSP5).
PSP5 outlines the infrastructure upgrades needed to support population growth and new housing supply in greater Hobart, including improvements to water security, network capacity and sewage treatment systems. TasWater’s proposal seeks an annual increase of 8.8 per cent inclusive of inflation over four years to fund these essential works.
The Regulator’s draft determination has proposed a reduced annual increase of 4.3 per cent inclusive of inflation, raising concerns that investment in critical enabling infrastructure will have to be delayed.
TasWater Chief Executive Officer, George Theo, said water and sewerage infrastructure is the backbone of housing growth.
“You cannot come out of a housing crisis by not investing in new infrastructure,” Mr Theo said.
“We understand that any price increase can be challenging for families, particularly for vulnerable customers, and we are committed to providing support where it’s needed.
“At the same time, for land to be zoned and homes to be ready for construction, there must be sufficient water and sewerage capacity in place. Without that essential infrastructure, growth simply can’t move forward.”
Greater Hobart continues to experience strong housing demand, placing pressure on existing networks that were not designed for current or future population levels.
“Our challenge is to invest ahead of demand, planning for the future so new development can be delivered when and where it is needed,” Mr Theo said.
“We have never shied away from naming up the scale of the challenge Tasmania faces.
“Delaying investment risks slowing housing growth and adding pressure to already constrained parts of the state’s water and sewerage systems. It will also cost us more to invest in the future, placing additional pressure on our customers.”
TasWater’s proposal also aims to give Tasmanians more control of their bills, by reducing the fixed component of the bill.
“Right now, around 84 per cent of an average bill is fixed and only 16 per cent is linked to actual water use - the highest fixed proportion of any major water utility in Australia,” Mr Theo said.
“We have proposed to shift this to 33 per cent variable so customers who use less water pay less. In fact, under our proposal, 50 per cent of our customers would only see a bill increase of 2.6 per cent in the first year of PSP5, which is an increase less than inflation.
“The Regulator has proposed only a minor shift of 18 per cent in the variable charges. That level simply won’t make a noticeable difference to Tasmanians’ bills and goes directly against customers wishes to have more control of their bill.
“TasWater remains committed to working constructively with the Regulator through the formal process to achieve an outcome that balances household affordability with the infrastructure needed to support housing supply, as well as giving customers the ability to have more control over their bills.”
The Regulator will release its final decision in late April.