Political Elements in the Revision of the Water Rates

Abstract

The water supply industry is owned and managed directly by the local governments in Japan. The water administrators undertake the day-to-day management of the water supply but can not make decisions on fundamental policy issues. These must be made by the head of the local government through the local assembly. So the raising of water rates can not avoid political intervention. The revision of water rates usually follows a course from a deliberative council to the head of the local government to the municipal assembly.
The deliberative council usually consists of ordinary consumers, representatives from labor unions, and men of learning and experience. Members must start their deliberations on the basis of worsening water supply finances, but usually only representatives of labor unions develop ideological opposition. Sometimes they even support increasing public expenditures because of their ignorance of the self-paying principals in water supply industry management.
In the municipal assembly, leftists from the socialist and communist parties typically offer severe opposition to the raising of water rates based on their ideological point of view, too, and sometimes despite their knowledge of the difficult situation in the water supply industry. The political relationship between the head and the members of the municipal assembly is paramount. If the head is a conservative and the majority of the assembly are reformists, bills to raise the water rates will be very difficult to pass. In such cases the proposed increases are often reduced and implementation is delayed, though an overall rise in rates is not ruled out. Of course it can not be enforced when local elections are near because raising the water rates is never favorable for candidates.
There are many other political considerations as well. The increases must usually be under thirty per cent to pass the assembly without much difficulty. The rates are usually set up on a sliding scale, with the largest users paying the most, but the basic charge is kept low, even though most revenues come from domestic and small-industry sources and because the politicians need their votes. For those who use extremely small amounts, the raises are minimal. For public bathhouses, the raises are also small, though they use a large volume of water, because of public health considerations.
In the case of a city in the Kansai District, the consumption tax was included in the water rates when it started in 1989 because the mayor was a conservative and a member of the Tax Commission, but immediately after another mayor, a reformist, was elected the consumption tax was excluded from the water rates and was payed as a part of public expenditures.
The process of revising the water rates abounds with political considerations which interfere with smooth increases. This must be the destiny of the water supply industry as a public utility and a local government enterprise.