Tasmania’s treasurer says the state’s water body, TasWater, is missing out on millions of dollars that could be invested in infrastructure upgrades.

Treasurer Peter Gutwein told State Parliament that the Government was in discussions with TasWater about ways to improve the quality of the drinking water supply.

Gutwein, who is also Local Government Minister, says TasWater could afford to borrow up to $600 million to fix sub-standard infrastructure, in a way that would not push up prices for consumers.

TasWater is currently borrowing $336 million, in part to fund pipeline upgrades for the 29 councils that own it.

Mr Gutwein says the water agency could borrow much more.

“They have sufficient capacity on their balance sheet to invest more. If they need assistance, we will work with them,” Mr Gutwein said.

TasWater CEO Mike Brewster has told the ABC; “That is not the reality of the situation”.

The Labor Opposition and the Greens say the government should be doing more.

Premier Will Hodgman rejected the criticism.

“Are we going to write a blank cheque, as Labor seem to be suggesting, and just hand that across to TasWater? No,” he said.