WATERWORKS (RATES) AMENDMENT BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

(Continued from page 2717.)

Mr WILLIAMS (MacKillop) (16:07): Prior to the luncheon break, I sought leave to continue my remarks. As I recall, I indicated that I was about to talk about another aspect of the pricing regime in South Australia whereby a number of elements are put together to come up with a price that will be charged by SA Water in order to establish a fair and equitable price for all parties concerned, principally the consumers, albeit that there is a range of consumers and, obviously, SA Water.

One of the principles adopted under the National Water Initiative (which I was talking about earlier) was that there was a requirement for rural and regional systems to achieve what is known as lower-bound pricing. There has been and remains, I believe, cross-subsidisation for water consumers in those regions of the state where it is relatively cheap to supply and distribute water to those consumers in the areas of the state where it is more expensive because we have a postage stamp type of arrangement where all water consumers basically pay a similar fee. The principle suggests that we should move probably away from that system and charge a fee in rural and regional areas at least at what is referred to as the lower-bound price. The lower-bound price is defined in the ESCOSA final report of 2008-09, as follows:

The level at which, to be viable, a water business should recover at least the operational maintenance and administrative costs; externalities; taxes or TERs, not including income tax; the interest cost on debt; dividends (if any); and make provision for the future asset refurbishment/replacement. Dividends should be set at a level that reflects commercial realities and stimulates a competitive market outcome.

That is the least price that should be charged according to the principles established by agreement between the various Australian jurisdictions.

Another principle is that we should move our pricing structures such that prices, at least in metropolitan areas, move towards what is known as the upper-bound level. I will read out the definition of the upper-bound pricing. It is:

The level at which, to avoid monopoly rents, a water business should not recover more than the operational, maintenance and administrative costs, externalities, taxes or tax equivalent regimes, provision for the cost of asset consumption and cost of capital, the latter being calculated using a weighted average cost of capital.

So, we have these two price ranges that are established and defined by agreement in the various jurisdictions.

By and large, the lower-bound basically directs us to establish a price which reflects the actual cost of providing the water but does not necessarily take into account a return on capital. The upper-bound, by and large, does exactly the same but does make provision for the return on capital. Our water infrastructure, over a long period of time, obviously has a substantial value and I think it is reasonable to argue that the government should have a right to expect a return on that capital. Indeed, if the government had to borrow money for the original construction of that infrastructure, it is only reasonable that a rate of return would see money flowing into the water entity—SA Water, in this case—or the government coffers to repay those loans. I do not argue against that. Indeed, the government, the Treasurer and the minister have, on a number of occasions that I am aware of in the past couple of years, publicly argued that point.

What they have not revealed is that, in establishing the price in South Australia to take into account all these factors, they did not allow for the fact that a lot of the capital asset which is owned by SA Water was never paid for by SA Water. It is what we call contributed assets. For example, if a developer has a subdivision of so many houses, whether it be 20 houses or 1,000 houses, it is at the developer's cost that the water delivery and sewage collection infrastructure is put in. It is not at the cost of SA Water.

Indeed, an augmentation fee is charged on every block, which varies from place to place across the state, to ensure that when a new subdivision is connected into an existing water delivery infrastructure or sewerage infrastructure, that upstream or downstream from that connection point the infrastructure can be upgraded to account for the extra capacity that is required.

One does not have to be Einstein to imagine that a substantial proportion of SA Water's asset base would have been acquired as a contributed asset. When SA Water was corporatised back in 1995, contributed assets since that date were deducted from the total asset base and the regulated asset base for the purpose of calculating what is the actual asset base which should provide a return to the government. The government has continually refused to address the matter of deducting the value of the contributed assets prior to 1995, and I would argue that that would be a substantial amount of money.

The government, when it produced its last transparency statement, part A, in the development of the last water price, had this to say with regard to this matter:

It is generally accepted nationally that contributed assets should be deducted from the RAB [regulated asset base] if adequate information is available to identify those contributed assets.

So it gives itself an out. It says 'if adequate information'. It goes on to say:

As noted in previous transparency statements, adequate information is not available to identify contributed assets prior to 1995. The government has continued to adopt the treatment of contributed assets outlined in previous pricing decisions and removed post-corporatisation contributed assets from the RAB.

What the government has decided to do, and what SA Water has been doing, is ignore the value of those contributed assets prior to 1995. So the government, when it sets the price, says, 'We believe we are entitled to set a return on the asset irrespective of the fact that we did not actually pay for it.' It was paid for by householders and developers.

The Essential Services Commissioner, I suspect, has been somewhat frustrated by this matter. He says that this matter has been addressed at length by the commission at every past inquiry with no change in the government's approach to the treatment of pre-1995 contributed assets, and he notes that in the previous final report the commission had this to say:

It is apparent to the commission that the government has taken little or no effective action in response to its previous comments other than to state...that it had 'carefully' considered the matter.

The commission goes on to say:

The commission has not changed its view that the inclusion of contributed assets is likely to result in a significantly over-inflated asset base and therefore an artificially high upper bound. Resultant prices will then also be over-inflated and monopoly rents will be locked in, not avoided. This is clearly at odds with clause 65 of the [National Water Initiative].

What the commission is saying is that the government continues to ignore the basic principles under which water prices should be established. In doing so, we in South Australia are living with a water price that locks in what is known as a monopoly rent. That is, the government, through SA Water, is taking advantage of its monopoly position. There is no competition to drive a price that would reflect the actual cost of providing the service, so it is taking advantage of its monopoly position. This reinforces the argument that I was making before the luncheon break, that the setting of water prices in South Australia seems to be more about delivering a cash surplus to government than it is about ensuring that the right price signals are sent to both the supply and demand side of the argument.

I indicate to the house at this juncture that between the houses the opposition will look carefully at this matter and see whether there is an opportunity to move amendments to this bill in the other place to at least encourage or, better still, force the government to address this matter. ESCOSA the organisation, in a better world, would actually be the body that would set prices for water in South Australia, and the whole range of water services. If that was the case, if we were in that better world, I am sure ESCOSA would be able to address this. As I have said, the commissioner says that he has raised it in every one of his reports. However, the government, for obvious reasons—its need for cash—chooses to conveniently continue with the nonsense that it cannot establish the value of those contributed assets. As I said, the opposition will endeavour to have drafted amendments to this bill introduced in the other place to oblige the minister when setting future water prices to address that particular matter.

There is another matter which has long concerned the opposition and which we will also seek to address via amendment in the other place. I hark back to some comments I made at the beginning of my contribution on this matter. I raised the point that I think the apparent haste with which this matter has been put through this house will lead to a poor legislative outcome. The government has had all those months to determine its position but the opposition has had very little time to determine its position and then take the appropriate action. The opposition was able to come to a considered position about its response to this bill only yesterday. Through the normal processes that the opposition has through subcommittees and then taking matters to our joint party room it was only able to come to a position yesterday and, as such, has been unable to seek the assistance of parliamentary counsel to have those amendments available for immediate consideration in this house.

The other amendment that I flag we will seek to make concerns the fact that many people who are domiciled in South Australia do not have their own water meter. This came to light recently because the government has recently decided that Housing Trust tenants will, on top of paying their normal Housing Trust rent, be obliged to pay water rates.

That is something they have not been obliged to do historically. I understand that Housing Trust tenants paid rent to the Housing Trust and, amongst other things, that rent covered the supply of water. Under those circumstances, when SA Water was providing water to a site that had a number of Housing Trust units on the single site, it often provided only one water meter for the whole site. There might be numerous domiciles on that site all using the one water meter.

It seems to the opposition that it is incongruous if we are going to be using water pricing to send price signals to both sides of the market, particularly in this case to the demand side, that individuals cannot receive those price signals because SA Water and the government refuse to supply them with a water meter. It is absolutely incongruous if the government has now taken the decision to charge Housing Trust tenants individually for their water rates.

By the way, the government did not reduce Housing Trust rents; so this is a new tax on a substantial number of people in South Australia who are least able to pay. They have imposed an additional charge which, traditionally, they have not been obliged to pay but, worse still, it is charged in a way so that they do not get the sorts of price signals they should expect to have. How on earth can we expect Housing Trust tenants to modify their behaviour with regard to water use without receiving price signals?

We could have a situation with a number of units on a particular block—and the member for Fisher interjected—and some people have showers that last for 40 minutes. It would make for great neighbourly relationships if there was a duplex with one water meter, and a family in one unit were assiduous in the way in which they used water, and tried to save water at every turn, only to know that their neighbours were taking advantage of them because they were connected to the same water meter and they were taking 40 minute showers. It is just a nonsense.

We think the government has got that terribly wrong and we will be seeking to draft amendments. I think section 86 provides SA Water with the power to supply water where there is more than one customer. From memory, sections 86, 86A, 86AA and 86AB deal with strata title properties. I am not sure whether they cover the Housing Trust scenarios, but I have not had an opportunity to speak to parliamentary counsel about that; but we will do so between houses.

I have indicated the opposition's broad support for the principle of quarterly water metering. We think the government is moving, albeit belatedly, in the right direction. We believe that that is the right way to move because we believe that water pricing should be used to send the proper signals. I have made the argument that that is not the way that this government has been operating. Water pricing is about something completely different for this government: it is about maximising revenues to Treasury, not about providing an excellent service in the most efficient way.

Before I conclude, I want to raise again the issue of desalination in South Australia and the implications of the announcements from the federal government last night and statements made by the government this morning and in question time today about doubling the size of the desal plant at Port Stanvac at this time. Let us not forget that the average water use in metropolitan Adelaide is less than 200 gigalitres a year. That is not the water use today with a severe drought and significant water restrictions: that is going back long term, over previous years, before we got into this situation.

If we double the size of the desal plant at Port Stanvac, at least half Adelaide's water will be supplied from the desal plant. One of the reasons we find ourselves in trouble in Adelaide with regard to water supply is that we have relied on a very limited range of water resources, principally the Adelaide Hills catchments and the River Murray for all our water supply. Now it looks like the government wants to put us into a position where we will be relying on a desal plant for at least half our water. There are significant risks inherent in that. I sincerely hope that the government takes this on board and has a long, hard think about it. I want to run through the risks.

The first risk is the most expensive water that will ever be supplied to South Australians will come from a desal plant. By moving from a position where desal was a smart idea in order to provide water security to a position where desal would be our source of choice for water will drive up the price substantially higher than it needs to be. That is the first risk. Actually, it is probably a misnomer to refer to it is a risk: it is a given. South Australians under that regime can expect substantially higher water prices than what they would otherwise enjoy.

One of the others risks is that, when you operate a desal plant, you produce high quality water which has already been finely filtered and which is ready to go straight into your distribution network. You cannot or you should not—it would cost you even more—try to store that water in an open storage system like a reservoir. You put the water that you produce in a desal plant into a contained storage to avoid any risk of any further contamination, which means that you do not have to re-treat it and re-filter it at additional cost.

Once you understand that about desalinated water, you realise that, as you are producing desalinated water, ideally you are consuming it at the same rate. Suddenly, you set your whole water production and usage regime around the continued operation of a desal plant. To my mind that provides a substantial risk, because everything that I have ever touched mechanically or had anything to do with mechanically—and I am not blaming myself—I have had problems with. From time to time, you have breakdowns, and I am absolutely certain that, from time to time, the desal plant will need to be taken off line and that there is an inherent risk to the continuous nature of the water supply because of that.

I spoke earlier in my contribution about the other costs involved with making certain decisions regarding water supply. The thing that probably concerns me more than anything else is that I and my colleagues on this side of the chamber have been trying to convince the government for a substantial time now that we should be harvesting stormwater. As I said earlier, the added benefit is that we will, at the same time, make substantial improvements to the environment of our coastal waters.

If we build a 100 gigalitre desal plant at Port Stanvac, it will do one of two things. If we build that and continue the same regime that SA Water currently works under, it will mean that South Australian consumers will have expensive water and it will lock out any opportunity to harvest stormwater. We will not be able to meet in a cost-effective way the environmental challenge of ameliorating the damage that is caused by that stormwater as it flows into Gulf St Vincent. To me that is a substantial problem.

We could take the path that has been taken in a number of other jurisdictions—and I understand that Queensland is a long way down this path, New South Wales is in the process and Western Australia is heading down the path—of opening up access to their water supply infrastructure—what we call third party access. It is the sort of regime that we use in gas, electricity and other major distribution networks where we have opened up access to third parties to put supply into the distribution network and sell retail supply out of the network at another point in the system.

That is what is happening to our water companies around Australia, and I have no doubt there is already pressure for this to happen in South Australia. I have no doubt that we are probably not a long way away from having that sort of regime in South Australia. If we do that, what will that do to the future viability of SA Water, when SA Water has locked itself into utilising the most expensive water available to it from a desal plant?

I refer to Colin Pitman and the work that he has been doing at Salisbury. I think most members are already aware of the fantastic work that has been done by Colin Pitman. Today Colin Pitman is selling water to consumers in the Salisbury area at a price substantially lower than SA Water. He is undercutting SA Water. Colin Pitman tells me that, next year, he believes he can supply 18 gigalitres of water.

Why are we building an extra 50 gigalitres of desalination capacity at an incredibly high price per kilolitre of water when Colin Pitman can supply 40 per cent of that water—or damn near 40 per cent—and other councils around the state are not a long way behind? Why are we going for the highest priced water available and locking those councils out of being involved in supplying water to consumers in South Australia?

That is a question I think the government has to answer. I can tell the government that Colin Pitman has another plan, because SA Water will not give him access at the current time and the government will not give him access to their pipes. Now I can see why—they want to maintain their monopoly. However, notwithstanding SA Water's current monopoly and notwithstanding the current government's wont to maintain that monopoly so it can underpin its revenue stream, Colin Pitman and the Salisbury council, I understand, are in the process of devising a scheme—and I am told it is about a $70 million scheme—to reticulate the water that is produced by the Salisbury council around their council area.

If 18 gigalitres of water can be sold—and some of his customers are already outside his council area—in and around the Salisbury council area, that will have serious ramifications for the profit line of SA Water, and if SA Water moves to this regime where half its water supply comes from a desalination plant, the implication for SA Water's bottom line becomes even more dramatic.

It also provides an added incentive for other councils to get on board and do the same thing. When I recently spoke to a representative of the Onkaparinga council, they gave me to understand that stage 2 of the council's Waterproofing the South plan could supply 15 gigalitres of water in its council area, which equates to 100 per cent of the water supplied by SA Water in the Onkaparinga council area. Those are the figures that they gave me.

The government and SA Water are putting themselves in a position where they will be very easily out-competed. So, the government's desire to maintain its revenue stream from SA Water may well be its own undoing. It may well be the complete undoing of SA Water as a profitable enterprise. All of this hinges around the way in which we move forward in setting prices for water in South Australia, and particularly around the decision whether to build a 50 gigalitre desalination plant to provide water security or take the next bold step and build a 100 gigalitre desalination plant with the aim that we will continue the monopoly.

On my assessment, if we go down that path, we are taking a great risk. In fact, I would suggest that it is a folly to think that we should be building a 100 gigalitre desalination plant in Adelaide. I know that the Premier wants to be able to crow from the rooftops that he can do away with water restrictions. However, the reality is that he should have been crowing that a couple of years ago—

Mr Goldsworthy interjecting:

Mr WILLIAMS: —yes—because he has had the opportunity over and over again. He had the opportunity to come on board with the opposition when we first called for a 45 gigalitre desalination plant. The government came on board with a 50 gigalitre plant, which is about the same thing. As I said earlier, we should be utilising water from such a plant today, not in a couple of years' time.

Again, the government has lost a great opportunity by ignoring stormwater harvesting and aquifer storage and recovery. If the government wants to continue to think the way that the Attorney-General does, that stormwater is dirty and unhealthy (he said on radio some weeks ago that if you pump stormwater into people's houses they will become sick), if the government wants to continue down that path, it will do so at its own folly. The reality is—

Mr Hanna: We'll be drinking it one day.

Mr WILLIAMS: We absolutely will be. I know the minister knows that the CSIRO has been working with Colin Pitman at Salisbury for over four years, and they have proved that the water can be brought up to at least as high a standard as SA Water currently supplies. They know that. That work has been done. It is not as though this is cutting edge technology or there are still significant risks involved with it. The work has been done, and it is possible for us to do this today.

As I have indicated, the opposition supports the basic tenet of the bill. I have placed an amendment on file to address the date change for the setting of a water price to 31 December instead of 1 June. I think that in the last few minutes that amendment has been circulated, and I hope that the house will support it. As I indicated, we will be moving other amendments in the other place.

Mr HANNA (Mitchell) (16:41): I am speaking to the government's bill, which will bring in changes to the way in which water is charged to customers, including the domestic customers in my electorate. I should point out that, in November last year, I brought in similar legislation. My proposal last November was more simple, in some respects. I proposed that water consumption be charged on a quarterly basis and that each water bill show the amount of consumption for each previous quarter.

The government bill is more complex and, in some respects, is an improvement. The government believes that everyone should be facing price increases for water at the same time—probably 1 July each year—and, therefore, it has a more complicated formula, so that the first bill after 1 July that a customer receives will have a proportion of the previous year's water rate and the new water rate for that new financial year. I can understand the fairness in that.

The other thing that I insisted on in the legislation I brought into this place was that there should be a very clear indication of the water usage in previous quarters. I have had a useful discussion about this with the minister. The minister has been informative and cooperative in letting me know about the rationale behind this legislation, and she assures me that much more information will be provided on the bills that are to be received once this legislation is through. So, I applaud that. It will be very useful for each household to know what the efficient usage is for a household of a comparable size, and that sort of information will appear on the new bills.

I must say, my bill did go further than what the government is achieving here in one respect. I also suggested that there should be separate meters for every household. There is a tremendous injustice, which will go on for some time into the future, in respect of strata titled properties and Housing Trust properties where there are multiple units, whether they be townhouses, flats, or whatever. It is a shame that some people in units on a strata title can be very conservative with their water use, but they have to suffer the profligacy of other water users in that same block. That injustice has to be remedied at some stage, but it is not going to be done right now.

I am very pleased that the government has finally acted on this. It is necessary to increase the price of water. It will become increasingly scarce, I am afraid, and the answer probably will not lie in the River Murray. I commend the government for introducing this legislation and I look forward to further reforms, particularly in relation to separate water meters, in the future.

Mrs PENFOLD (Flinders) (16:45): While I support this bill, I take the opportunity to once again speak about water and to ask the minister to exempt people living on Eyre Peninsula, who are forced, by necessity, to use water from SA Water, from rates until such time as they are provided with safe, pleasant, drinkable water from a sustainable source, water that is at least equivalent to Adelaide's water supply.

Consumer law states that a product should be fit for purpose and, if it is not, penalties are incurred by the supplier. Goods may be returned with reimbursement given or replacements provided. Discounts are given for poor quality. However, water, which is a necessity for life, that is provided by a monopoly, government-owned business and that should have at least equal consumer protection requirements to private enterprise, provides the vast western region with expensive water that is disgusting, without penalty or compensation to the purchasers.

The rainfall that was so welcome in recent weeks, unfortunately, will not be enough to break the six years of drought suffered in some areas, recharge the overdrawn aquifers across Eyre Peninsula that the region depends upon for its water supplies, or save the Murray River.

Inadequate and very poor quality water is delivered to people living on Eyre Peninsula, who pay considerable money through their rates, considerable augmentation fees and even a levy to help save the River Murray, but continue to be fobbed off by this Labor government.

On 21 August 2002, the then minister for government enterprises stated in parliament, regarding SA Water's Eyre Peninsula master plan, 'There are a series of options in the master plan, including desalination.' Soon after, he announced at a cabinet meeting in Port Lincoln a $32 million desalination plant for Eyre Peninsula.

Then in 2006, when we still had no desalination plant, the responsible minister at the time, minister Wright, suggested that calcium carbonate could be removed by water softening and keeping the ambient temperature of stored water as low as possible. Quite clearly, the minister had no idea what he was talking about and it is not surprising that he did not last for long in the job.

In September 2006, The Advertiser snapped a photo of me 'brandishing a water pipe in front of Premier Rann in question time in parliament' after I asked the Minister for Water Security a question about the scaling in pipes, a problem that was costing farmers thousands of dollars as they constantly needed to be replaced. This was not the first time I had raised this issue. At that time the minister responded:

I will be seeking advice from SA Water on what it is doing and I will bring back to the house and to the member a detailed explanation as to the actions that SA Water is undertaking as a consequence of those issues regarding the blocking of pipes.

In May 2008, I again wrote to the Minister for Water Security, Ms Maywald, and the Minister for Environment and Conservation, Ms Gago, enclosing data with results from water testing from Ceduna and Broken Hill by DELTAwater Solutions. The Country Water Guideline Value data on that chart showed ideal quantities of each chemical, but there were significant differences between the two water supplies and the guidelines.

Ceduna's water supply had higher mineral and salinity levels, and results indicated that chlorine levels in Ceduna's water supply, of 205 mg/1-ppm, while within the Country Water Guideline Value, were much higher than the 0-70 mg/1-ppm recommended by DELTAwater Solutions.

The minister responded to the data by assuring me that all was okay and within the acceptable levels according to Australian drinking water guidelines, stating:

There is no evidence of adverse health effects for the general population associated with TDS concentrations or hardness present in the water supplied to Ceduna.

Quite clearly, the minister does not have to drink, bathe or clean with the water that Ceduna residents are expected to be grateful for. However, in the same letter the minister did admit that the issue of scaling had been raised and she had 'asked SA Water to investigate options that may assist in the reduction of scaling', which is exactly what she promised to parliament in September 2007.

Finally, in response to yet another question in parliament taken on notice on 25 September 2007 the minister finally tabled her response on 5 June 2008, when she advised:

The groundwater used to supply most of Eyre Peninsula has naturally occurring levels of calcium carbonate that leads to the water being particularly 'hard', and can be associated with scaling of pipes and fittings.

She said that SA Water's investigations indicated that elevated water temperature in customer private pipe systems is the main cause of scaling and that SA Water informed the public that pipe systems needed to be buried greater than 200 millimetres below the surface to reduce the likelihood of water heating.

Again, the minister and her department defer the issue and blame the end user, those people who continue to pay their rates and who bear the cost of piping on properties. Farmers are burying their pipes deeper, but the minister fails to recognise that this is not only an issue on farms and that calcium build-up is occurring directly from water supplied in Ceduna too.

Recently, the Mayor of Ceduna, Alan Suter, again raised the issue of poor quality water being supplied on Upper Eyre Peninsula and wrote an article in the West Coast Sentinel. He stated:

Late last year we were supplied with some water test results obtained by a local farmer which caused us to question the quality of water being supplied by SA Water. These results showed extreme hardness and causation of heavy build-up of scale with resultant damage to pipes and fittings like those being experienced by many locals. As a result of this, District Council of Ceduna staff collected samples of water from an off-take on a trunk main and sent these away for analysis by the Australian Water Quality Centre. This centre is a business unit of the South Australian Water Corporation. The results indicate that the water is potable but little more. Some may be able to drink it but the taste makes it unpleasant to do so. The tests clearly showed a further deterioration in the 14 months since the last test and confirmed major problems with the quality of the water.

The results showed extremely high levels of electrical conductivity (1070 uScm) and total dissolved solids (590 mg/L) and total hardness as CaCO3 of 298 mg/L. Extreme hardness is 170 mg/L, which puts our hardness level off the scale. It is therefore no surprise that we have a lot of trouble lathering up during showers and have to use heavy concentrations of detergents and so on.

The results also confirmed that build up of scale will cause damage to pipes and electrical fittings, which is exactly what we have been putting up with. Hot water systems have a ridiculously short working life using our water. They also show high levels of calcium, manganese and chloride in line with results from previous tests. Even more alarmingly, it appears that the level of hardness has increased quite significantly in the past 14 months and has deteriorated from a poor 220 milligrams per litre to a level of 298 milligrams per litre. If this level keeps growing, we have a major problem. More concerning is the possibility that our overall water quality will keep worsening.

It is time that SA Water started supplying forthright advice about the water security issue. Is the basin at risk? Why is it that they cannot supply more acceptable water to the Eyre Peninsula? Why are they so incredibly unhelpful in regard to investigating new sources of supply? The above factors make it even more amazing that SA Water are not prepared to properly address proposals to make affordable desalinated water available to Eyre Peninsula. Surely it is time for some real answers to our many questions.

It is not just about the money that people are paying through their rates; it is the time, cost and emotional cost that is taking its toll on people who have experienced up to six years of drought. People are fed up with being treated like idiots.

This is not 'a bit of scaling' and 'a bit of bleaching' as the minister stated when shown items of clothing completely ruined and discoloured when washed in Ceduna. How many times will the minister accept having to continually buy new hot water services, water softeners and household appliances because of 'a bit of scale'?

Has the minister ever had to replace kilometres of pipes so that livestock do not die of thirst? One farmer brought back his elderly father to help and was unable to go to Roxby Downs to take up farm employment to feed his family. Does she have any idea of the time, money and effort that goes into burying pipes deeper and deeper, as per SA Water's recommendations, year after year?

Does she and her departmental advisers recognise the problem that 'deep burying' creates? Farmers cannot easily find leaks, and it is even more difficult to replace pipes when they do block. People in Adelaide would not accept this disgraceful service from their water provider and nor should people on Eyre Peninsula.

We cannot continue to have the SA Water government monopoly holding up growth and development and holding back lifestyle and opportunities. Eyre Peninsula currently uses approximately 9 gigalitres of water annually with 1.4 gigalitres coming from the ailing River Murray through the $48.5 million pipeline from Iron Knob to Kimba. Until the long-awaited BHP EIS was released, the government proposed that additional water delivered by the extended pipeline would increase by 2.3 gigalitres supplied by the ill-conceived reverse osmosis desalination plant to be built at Point Lowly.

Now we hear that non-potable water is all that will be produced. Even so, I and many others hope it never will be built. There are better locations and better technology that could be used that will not damage the fragile marine ecology of the Upper Spencer Gulf or threaten tourism, fishing and aquaculture industries. Then, apparently as a result of BHP's recent EIS announcement, suddenly we are told on the 4^th of this month through ABC Radio by Treasurer Foley that:

The need to build another desalination plant as it relates to the upper Spencer Gulf may not be necessary because we are looking at other options about smaller micro desal for various parts of the peninsula, but we're working through that issue with BHP and will make some announcements in the near future.

This statement was hotly followed by the amazing revelation that the government recently knocked back a request from the Eyre Regional Development Board for funding of $85,000 to look at the provision of water for mining in the region—a region that is set to host 80 per cent of the state's mining exploration. Our state and our nation needs this economic stimulus.

If it were not so serious, the to-ing and fro-ing of the water supply to ratepaying customers and potential future ratepayers on Eyre Peninsula would be laughable. Following this most recent knockback, and all the investigations, consultations and summits, the wasting of millions of dollars, the promises of a desalination plant that were written in blood by one Labor minister in 2003, and being reassured that 'this government never reneges on a promise' by another in 2005, last week the CEO of SA Water gave Eyre Peninsula water ratepayers more amazing revelations at an Australian Israeli Chamber of Commerce address, stating:

...they'll get their desal plant...SA Water has found groundwater supplies are less plentiful than previously believed...we found there was knowledge missing about the sustainability of groundwater—

That is, on Eyre Peninsula. The address also stated:

South Australia has been caught out by being complacent over water supply but was now pursuing a wide-ranging strategy involving bigger storage, stormwater projects, recycling and efficiency.

These admissions are much too little and much too late. We need desalination plants, but we need them on Eyre Peninsula in the right places using the right technology and including wind or solar power combined with graphite blocks to ensure stability.

One desalination plant can be placed at Ceduna; though, sadly, it is probably too late now for the original private enterprise plant that was proposed using solar power utilising Cheetham Salt for the provision of filtered water which would use the saline water in its existing salt production operations. A second plant at Elliston could be placed at the existing Polda Basin pumping station where the once seemingly endless freshwater supply is now saline and ruined by over pumping by SA Water.

A third desalination plant is needed at Streaky Bay, where the Robinson Basin has now fallen to the point where incursion from saline water is imminent, if not there already. SA Water is currently pumping water from the almost depleted southern basins to the depleted Robinson Basin. How long do they think they can keep this up? Locals and farmers already believe that some lenses in the Southern Basins are affected now by seawater incursion.

We need new water for jobs and job security. The proposed kaolin mine at Streaky Bay needs three gigalitres annually to process its kaolin. Processing of minerals sands is possible as is iron ore processing to produce pellets. The value adding of these minerals will provide jobs for people to live on Eyre Peninsula, secure jobs that ensure our businesses, our schools and our communities can thrive even in times of drought.

This Labor government, the Minister for Water Security and her department, the SA Water government monopoly and its board and CEO are responsible for the depletion of Eyre Peninsula's basins and they have to do something about it as a matter of urgency. They cannot just sit by and hope and pray for more rain to recharge them. Stop fobbing us off. The SA Water board and the CEO must answer the questions posed by Mayor Suter and others right now and provide Eyre Peninsula with adequate, drinkable water or the responsible minister must resign. In the meantime, the minister should exempt the people of Eyre Peninsula from these rates which they have paid under difficult circumstances for such a very poor product and for such a long time.

Mr PEDERICK (Hammond) (17:00): I, too, rise to speak to the Waterworks (Rates) Amendment Bill. Our party does support the intent of the bill but we note the amendment put up by the member for MacKillop.

Under the state's current legislation, water meters are read every six months with water use billed within six weeks of each reading and, therefore, the water is priced on a financial year basis. This means that when a person's meter reading period straddles two financial years they are charged the price of the later year for the entire period. The government ran into some public controversy when it failed to appreciate this fact about South Australian water billing in July 2008. The Treasurer (Kevin Foley) announced that the government would move to quarterly meter readings and billing to smooth out water billing throughout the year. To this end, the Minister for Water Security (Karlene Maywald) introduced this bill on 29 April in this place.

As part of the introduction of quarterly billing the bill changes the application of water pricing so that new prices commence at the beginning of a financial year and these prices must be gazetted prior to 1 June each year, according to the government. The bill also contains transitional arrangements for the move to quarterly billing which will require the regazettal of prices. The consumption period becomes the period between meter readings rather than financial years so some customers' consumption periods will still straddle financial years. If this occurs, where the rates are different for the two financial years, SA Water will average the water consumption for that period over a daily basis and charge each day according to the price of the financial year in which it falls.

The government argues that quarterly water billing will deliver several benefits, including enabling customers to better manage their finances by spreading water charges across the year, and assisting households to better manage their water use by charging water clarifying the correlation between water usage and billing.

There are some issues involved, though; there is the transitional impact on customers whereby billing periods will be shortened and some customers will pay for a total of 15 months of water use during the 12 months of the 2009-10 financial year and this results from the concurrence of the six-month component levied under the current billing system and in addition to the three quarterly bills under the new system. This issue is not specifically covered in the bill but the minister has assured us that SA Water will be open to these customers, on an individual basis, making payment arrangements to reduce the impact.

The move to quarterly billing will also incur a net financial impact of $8 million, including meter reading costs. I will be interested in the minister's round-up of where those costs factor in across SA Water and how much is in regard to reading the meters and what extra is taken up in administration. I note that the 2009-10 water prices were set to recover this impact, so, SA Water is already charging to cover the cost of the new system before it has been passed in parliament.

There is a change in the thresholds: we go from an annual threshold to a quarterly threshold with the tariff blocks. This is in an effort to smooth out the billing. The annual thresholds of 120 kilolitres and 520 kilolitres will be averaged out to quarterly thresholds of 30 kilolitres and 130 kilolitres. This may have a seasonal effect on some customers, but SA Water estimates the result would be a maximum of $20 per quarter for affected customers. I note in the schedule that the first level of water is 97¢ a kilolitre up to 120 kilolitres on an annual threshold basis and for 120 to 520 kilolitres it is $1.88 a kilolitre and $2.26 a kilolitre above 520 kilolitres.

It is interesting that SA Water (until the government finally decided to build a desalination plant) had been heavily reliant on what catchment water it could catch—and there has been very little of that in the past few years. Then, 90 per cent of our water has essentially been pumped from the River Murray, which is in crisis. However, the government and SA Water are so profit driven, because 95 per cent of their profits have to go into general revenue and the government has extracted about $2 billion in the past seven years into general revenue, that they are not keen to explore more innovative ways to supply water to the population.

The Liberal Party put up the proposal for desalination but it was almost 12 months later that the Labor Party took it on board. I note the delay because we went over to inspect the original desalination plant in Perth and it only cost $300 million to build and $87 million for the infrastructure. That was for a 45 gigalitre or 50 gigalitre plant. Now, a plant of similar size will cost the government $1.4 billion. If the government had moved earlier, it would have saved this state a lot of money—a vast amount of money, I believe hundreds and hundreds of millions of dollars.

Also, regarding aquifer storage and recovery, we have the Salisbury council and Colin Pitman leading the way in this state, but the government has been very slow to act. It is pleasing to note that our policy on aquifer storage and recovery has been out for over 12 months and will capture 89 gigalitres of stormwater over 13 sites across Adelaide. Yes, that will take time and money, but we have budgeted $400 million for that proposal because we believe there should be a spread of sources to derive water.

I am also concerned about the effect that increased pricing will have on landholders and whether there will be any relief for farmers—especially farmers with large amounts of cattle that have the ability to drink a lot of water. Also, I mention people with large sheep flocks. I know there has been quite a lot of work done—some people are reinvigorating old bores and some are putting small desalinators on bores to take their own reliance off the river. That is to be commended but you can understand, perhaps, their incentive to do that because, if anyone is going to fall into the higher bracket quickly, it will be graziers who have lots of stock that are reliant on the River Murray.

We must remember that 90 per cent of the state at this stage is reliant on the river. I note that my own area is heavily reliant on the Tailem Bend-Keith pipeline, and I know that, if things get too saline and the water quality issues are not right, the government has proposed a $75 million desalination plant to go on a river pipe. I just wonder what plans it has if it ever gets that saline at the Murray Bridge or Mannum offtake for Adelaide water, because that would need a mammoth injection of funds.

So there are certainly some great concerns, and I note the member for MacKillop talked about contributed infrastructure. I was talking to a constituent the other day, whose property is one out of 14 on the end of a line near the river. They have been accessing water direct from a channel that feeds from the river, but that is becoming very difficult with the lowering and vandalism of pumps, but they have an opportunity through a developer who has placed a pipe down the road behind them. They only have to add between 100 metres and 200 metres extra piping, but they have been advised that to connect it will cost about $14,000 a house. I think that is a vast amount of money, and I will be seeking some assistance for these people to get access to potable water. However, I note the developer put the initial extension down that particular road.

What I will say about SA Water supplying water is that, when things did get critical and needed to happen, it took too long for the kick-off period but, when we did need potable water piped to Meningie and Narrung, it happened in a hurry, and I commend the contractors who did that work. I have commended them here previously, and I have commended the people in the community who worked with the contractors to connect those pipes. I note there have been other stock and domestic pipes put in around the Lower Lakes, near Langhorne Creek and Strathalbyn. However, there are still major issues with hooking up people at Point Sturt, and they certainly need some assistance to get stock and domestic water there, and also on Hindmarsh Island.

I also make a brief comment about the Creeks Pipeline Company. It did get some assistance from the government. Some government people worked with it in getting its project underway under the Murray Futures program, and some people think they have been supplied with their water for nothing. They get 90 per cent of the project for nothing but the community has to supply 10 per cent of the $125 million, so they have to come up with $12.5 million. I believe if they have not got there they would be very close. I believe work has commenced on that pipeline, but certainly it has made it unviable for other people to access that pipeline for irrigation water because of the $1,000 a megalitre infrastructure cost and the $300 a year, I believe, access cost for that water. Also, if there is very limited allocation, they will have to purchase any water that comes through the pipe. I will certainly commend the contractors once the button gets pushed—and I believe the buttons could have been pushed much sooner on both projects—and they get the job done.

With those words, I indicate that I support the intent of the bill, but with the amendment put up by the member for MacKillop.

Mr GOLDSWORTHY (Kavel) (17:13): I want to make some comments in relation to the Waterworks (Rates) Amendment Bill, and I understand the intent of the bill is to implement a quarterly billing cycle, and the house has already heard the state Liberals are prepared to support the bill in that respect. I guess it is really a sign of the times that billing cycles have become more frequent, and I refer to Telstra as an example. Households used to receive quarterly bills for their phone usage, line rental and the like, and now we receive that bill every month. Bills roll around every month; and I guess that was a decision made by the senior management of Telstra to improve its cash flow. It was getting cash in every month, not every quarter. That is an example of the recent trend of service providers increasing the billing cycle of their accounts and invoices and payments being sought.

I do not necessarily need to go into the technicalities of the legislation because the member for MacKillop—the member who has carriage of the legislation in the house of behalf of the opposition—has dealt with that quite extensively. The bill does allow debate in a broader sense in relation to water resources in South Australia. We are extremely well aware of the fact that water is the key issue facing all South Australia. It is the number one issue. Even though it is raining at the moment—and we are pleased it is raining; we have had rain today—we are in crisis in South Australia in relation to water resources. That crisis can be attributed to the lack of action by the state Labor government over the seven years it has been in power.

If the government had adopted the Liberal Party's policy some two years ago in relation to desalination we would be close to receiving, if not receiving, water from the desalination plant. If the Labor government had not ignored the fact that we needed a desalination plant two years ago, when the Liberals first rolled out that policy, then that plant would be close to being commissioned and clean potable water would be flowing through our pipes now.

In conjunction with that, the government has been quite tardy and reluctant to embrace the reuse and recycling of stormwater. We have spoken on this side of the house for a long time about the need to recycle and reuse stormwater. Unfortunately, the government has been slow to act in relation to that. An outstanding example is the work that Mr Colin Pitman and local government have been able to achieve. The member for MacKillop outlined some of the outstanding work Mr Pitman and the Salisbury council have done in relation to stormwater and wetland systems, and filtering and providing a good source of fresh water for the community's use.

I note with interest that I received a newsletter from the member for Newland in the mail a few weeks ago, heralding the work that the government has been carrying out in relation to desalination, stormwater, and so on. It was a very glossy brochure, I might add, to the people of Newland and the new areas coming into the electorate of Newland, talking about desalination and stormwater, and the like.

It is important that the voting population understands that if the government had acted sooner and with a greater degree of haste then water from those sources would be being utilised now through our reticulation system. Again, they are examples of the government missing opportunities, being slow in taking up opportunities that present themselves. It is a hallmark of this government that it has been slow to act in many areas. In relation to water resources, there are some glaring examples of that.

I would like to talk about some proposals that the government has announced in relation to the so-called expansion of Mount Bold Reservoir. We have seen very little action in relation to that proposal. At the very outset I raised the matter in the house, and questioned why the government would look at increasing the capacity of Mount Bold Reservoir, and it was for two reasons. Only two sources of water can be used in the Mount Bold Reservoir—the first is from the Hills catchment and the second is from the River Murray.

At meetings I have attended I have been told by senior government officers that the Hills catchment is at capacity. There is no more water available out of the Hills catchment to supply metropolitan Adelaide with any additional water. The other source of water is from the River Murray. We all know—and I would think the government would be well aware of this, but something is missing here—that we are trying to reduce our reliance on the River Murray in view of the current dire situation of that water resource. Why for goodness sake was there a proposal to expand the capacity of Mount Bold?

The Hon. K.A. Maywald interjecting:

Mr GOLDSWORTHY: The minister is murmuring something over there that I cannot hear. Following that announcement, I have asked these questions in the house over the last couple of years and no plausible answers have been given. I wonder whether the reason they have abandoned that proposal is that they have realised that they cannot get the water to put into Mount Bold. We wait with bated breath for the answers to those questions.

I also note that, this morning on radio, the Deputy Premier and Treasurer, in his interview in relation to the federal budget, was talking about the government looking at having no water restrictions. It is going to do away with water restrictions. I would like to see the government achieve that, given the fact that we are still in the midst of a crisis in relation to our water resources. I think that is just a furphy; that is, hopefully, we will get some rain in the Murray-Darling catchment, we will get some rain here to fill up our reservoirs over the winter and the government will be able to ease back on water restrictions.

I can tell the house that, if the government had adopted Liberal Party policy two years ago, the water restrictions that we currently suffer could well have been eased back, but because of the tardiness of government in implementing these initiatives, I cannot see how those water restrictions can be eased. However, the Deputy Premier is floating that notion in the community. We will certainly wait to see how that will be delivered. As I said at the outset, the Liberal opposition supports the intent of the legislation, but I understand an amendment will be moved.

Mr PENGILLY (Finniss) (17:24): I will make a short contribution on this subject. I indicate that this side of the house is supporting the bill, but we may be making a few suggestions on how it can be bettered. I hope they are picked up by the minister and that, in due course, the government agrees to the suggestions from the opposition. Whether the government agrees down here or whether it agrees in another place, I suppose only time will tell. This bill seems a bit of a muddle-fuddled way of doing business, but it does appear as though it is a belated effort to try to fix up something that was rather controversial in July 2008 when Treasurer Foley announced that the government would move to quarterly meter readings.

More to the point, there is nothing so important in this the driest state in the driest continent in the world as water. Without water, we fail to exist per se, quite frankly. We have been in this diabolical situation now for a number of years. The government has failed to take appropriate action. It is now nearly three years since the Liberal Party announced plans for a desalination plant, which is now to be built at Port Stanvac. Now we have this announcement that the size of the desalination plant is to be doubled courtesy of the current federal government.

Whenever there is good news, we have our Premier running around making good news statements and, of course, one of his statements at the moment is that it will be operated by sustainable energy. I for one would like to know where this sustainable energy will come from. Indeed, if we are to provide our population with water and produce it through a desalination plant, where will the sustainable energy come from to back up the energy sources we already have? Do they intend to put in a new series of wind farms on the Fleurieu Peninsula down south?

Do they intend to make a breaking news announcement on another wind farm for the escarpment that surrounds the flats at Myponga Beach and around that way, which is already highly controversial; or, as the member for Newland and I would prefer, do they intend to put in a nuclear power station and run the desalination plant with nuclear power? Now that would be a step in the right direction. I do not think the member for Newland is allowed to talk about that, however. He is nodding in agreement, I think.

Mr KENYON: Mr Speaker, I rise on a point of order. The member for Finniss indicated my nodding in agreement. It did not occur and I would like it struck from the record.

The SPEAKER: It cannot be done. The member for Newland is free to seek leave to make a personal explanation at the conclusion of the contribution by the member for Finniss.

Mr PENGILLY: The member for Newland may have been nodding off to sleep, so I am not quite sure about that, in fairness to him. In all seriousness, we on this side of the house have come up with this plan which has been picked up by the government, with the Premier running around making a big man of himself. We have substantial opportunities for stormwater harvesting. We are not teaching the community of South Australia to care for the use of water. We are not doing that. The restrictions that have been placed on the use of water by the South Australian government are one thing. Today, the Premier said that if we doubled the size of the desalination plant we would be able to lift the restrictions.

Well, whoopee duck; fantastic stuff! But why on earth should we spend billions of dollars doubling the size of the desalination plant when there are other alternatives? Why are we not adding to the curriculum in schools (and the minister can correct me if I am wrong when she gets on her feet) and wherever we are educating people of whatever age, but particularly younger people, a course about the use and care of water and how desperately we need to conserve our reserves of water in this state to provide for the future?

It is all very well to talk about a population of two million by 2050 but the reality is that, if we have a population of two million we have to provide them with water to drink and for every other potable use they might have for it. My view is that we should be educating our children.

If you live outside the metropolitan area, which some of us do (and as I am looking around I can see the members for Frome, MacKillop, Kavel, Schubert and Hammond and, indeed, the Minister for the River Murray, who all live outside the metropolitan area), in areas where people have to save water for their own personal use to get by, they are very careful with water. They take extreme steps to make sure that it is not wasted. For example, when they do the washing they use the water two or three times and then use it on the garden, or wherever it is needed.

That simply does not apply in the metropolitan area because, unfortunately, the population is so used to just being able to turn on a tap and access water or go into a supermarket and get milk out of a carton that, unfortunately, they have really lost accountability with respect to the issue of water use and conservation. It is something that I feel very firmly about. In the driest state in the driest continent we should be putting in place a curriculum in the education system whereby children in South Australia are taught about water. We need to put some common sense back into these debates.

Out there it is water, water, water. That is what it is; trust me. As my colleagues (and, indeed, some on the other side of the house) know, we are seriously disadvantaged in my electorate at the moment. The member for Hammond's electorate also is seriously disadvantaged, and ad infinitum up the river, with respect to what is happening with this precious resource of the Murray and the fact that it is dying a long and tragic death—or a short and tragic death at the moment—and the communities around those lakes are dying a tragic death along with it, all because of man's greed and stupidity and overallocation combined with the drought.

I am unsure whether the bill that the minister has introduced will affect any of the issues that I have talked about in the last few minutes. I do not think it will. However, we have to deal with the fundamentals. It is no good having a meter to sell water if you have no water to put through the meter. That is an issue. The River Murray system is more than just the lifeline of South Australia: it is the beating heart and soul of South Australia. If you go through the member for Frome's area across to the member for Giles' area, or the member for Stuart's area down into MacKillop and Hammond and up into Schubert, or wherever you go, we are dependent upon the River Murray to maintain our lifestyle. It is far too much for the Murray to cope with in the current scenario.

I indicate my support for the bill, along with that of my colleagues. I hope that the introduction of quarterly billing is successful. There will be some hiccups, as indicated, and as has been brought to the attention of the opposition. However, we wish it a speedy passage through the house. We hope that the amendments that have been put forward are considered with respect and that when the bill goes to the other place it is accorded reasonable treatment and that, in due course, it passes through both houses.

Mr VENNING (Schubert) (17:35): I rise to support my colleagues, and I commend the shadow minister, the member for MacKillop. This bill will change the billing system for SA Water so that customers will receive their accounts four times a year instead of the current arrangement, which sees customers receiving bills only twice a year. Under current South Australian legislation, water meters are read every six months and water use is billed within six weeks of each reading. This means that, where a person's meter reading period straddles two financial years, they are charged the price of the later year for the entire period.

We have expressed concerns over many years regarding the current billing system. I have raised this issue in this house before, and I believe there are advantages to moving to quarterly billing. Most notably, SA Water customer charges for one year's water supply will now be spread across four accounts rather than two. With many South Australians currently experiencing tough economic times, I think that this will enable them to better manage their finances.

SA Water customers will also be able to monitor their water use more carefully, because they will be receiving better feedback about the amount of water they use and, in the extended period of drought we are experiencing, that can only be a positive move. The extra two accounts that customers receive per year will enable customers to better see the correlation between water use and the charges associated with their use. And, really, is that not the most important thing? People have to be able to know what they are using and what they are paying and use it accordingly. As we all know, water has been too cheap for too long, and all sorts of things have happened over the years that should not have happened.

As part of the introduction of quarterly billing, the bill changes the application of water pricing so that new prices commence at the beginning of a financial year. These prices must be gazetted prior to 1 June each year. The bill also contains transition arrangements for the move to quarterly billing, which will require the re-gazettal of prices to begin from 1 July 2009.

However, there are a couple of minor points to note. By shortening the billing period, some customers will pay for a total of 15 months of water use during the 12 months of the 2009-10 financial year. This results from the concurrence of the six month component levied under the current billing system in addition to the three quarterly bills under the new system. This issue is not covered by the bill, but the minister has assured us that SA Water will be open to these customers, on an individual basis, making payment arrangements to reduce the impact.

It is understandable that a move to a quarterly billing cycle will incur extra costs, such as extra meter reading costs, and this has been estimated to be $8 million. The 2009-10 water prices have been set to negate this extra impact. Accordingly, SA Water is already charging to cover the cost of the new system before it has been passed in the parliament.

I do ask the question though: will we all have to go to quarterly readings? If a person or a customer wishes to retain either yearly or two yearly meter readings, is it possible to facilitate that for individual customers, or does that become a bit of a problem?

I think this is a good bill that will benefit South Australians, and I support it. I also note that we are seeing acute water shortages across the state, and I have seen what many farmers are doing to alleviate this problem. On our own farm I commend my son—something which I have never done before in this house—for building a huge tank, which was manufactured only a few weeks ago, and connecting all the sheds to it. I think its capacity is 300,000 litres, which is a huge tank—it is massive. I thought we would never fill it but, of course, three days after it was completed and the last shed connected to it, down came the rain—2½ inches of rain, and the tank is half full. That is a lot of water. It is a very expensive tank, I think costing in excess of $30,000—I do not know; I do not do that any more. All I know is that we now spray our crops with rainwater. We do not have to worry about water restrictions. Indeed, I wash the Fleet SA car in rainwater, and I do not have to worry about that. Admittedly, you have to pump the water out; there is no pressure, so you need a pump.

When I drive through Monarto I see these huge Woolworths warehouses. What are they doing with the water that runs off those massive buildings? They ought to be catching thousands and thousands of litres off sheds like that. When I heard that they were even going to apply water licences to some of those sheds, how ridiculous is that? That is crazy.

We have to look hard at what we do in relation to water. It is a scarce and precious commodity, with which we have been very frivolous over the years, and it has been too cheap. We have not built enough reservoirs or provided sufficient storage in the Hills in the last 25 to 30 years, and here we are with a situation like this. We are arguing today about the government's project involving the building of a desal plant. For five years we have been discussing this, particularly the last three years, following the opposition's policy announcement that it wanted a desal plant.

The government, kicking and screaming, has agreed to build it, and now it has come out and said that it is going to double the size. I have some concerns about that because it does highlight another problem. If we become reliant on a desalt plant—I think 60 per cent of Adelaide's water supply could be supplied by desal—and with a huge reliance on electricity, what happens if we have a power failure?

The only way I would consider building such a large capacity desal plant is to have a large storage, so that if you do have a problem with electricity you have some water up your sleeve to supply to the consumer, because you are reliant on water and power at the same time. You cannot run it without both. I am very concerned about that, and that is why I fully support the Liberal Party policy here. Yes, we have always supported a desal plant, a 50 gigalitre—

Mr Goldsworthy: It was our idea.

Mr VENNING: It was our idea. A 50 gigalitre plant should definitely have been operating by now. With the other money—the $400 million plus—that is coming from the federal government, I think we should be looking at that and fast tracking as many of these water reuse schemes as we can. We have plenty of opportunities to do that. Then we can spread our reliance across the area, rather than being totally dependent on desal water, which I would remind the house is power dependent and very expensive.

I think that the Planning Act ought to be changed to make it compulsory for every new house to have a water tank. Although that provision may already be in there, I believe that people should be encouraged to put these tanks underground. Before you build your house you buy a poly tank and put it in the ground, so that there is then no impediment or eyesore; it is underground and it is kept cool and can be there for years.

By installing rainwater tanks, people have their own water, whether they use it for drinking, for toilet purposes, or whatever. It is their water for their own use; it is their guarantee of a water supply. Also, importantly, it takes the stormwater that comes off the roof when we have a rain event, which is all too rare nowadays.

When you do have a rain event the water that comes off the roof is a problem. So, if you put it into a tank then you turn that problem into a double positive. I think that it ought to be compulsory and that this matter should be pushed very hard. Even those people living in existing homes who do not have a rainwater tank ought to be subsidised to install a tank, so that every house has a tank and so that the problem of stormwater running into the streets and then into the sea will be solved.

I went to Israel nine or 10 years ago, and I cannot believe that we have taken all this time to work out that we should have copied Israel back then, because they do not waste a drop. We have needed a six year drought to wake us up and get us out of our comfort zone in relation to water. I think we should have done this a long time ago. All our new suburbs ought to have been dual plumbed before they were ever built on, so that we could plumb in the potable water and the recycled water. It should be automatic, and the Planning Act should be changed tomorrow so that we prohibit any building without such provision.

When I was on the Public Works Committee for some time, it was I who carried on like a pork chop in relation to all public buildings being dual plumbed. I refer to dual plumbing for fresh water coming in and also the sewage going out, but also splitting the sewage into black water and grey water separate and external from the building. At a later date, just by purely cutting a pipe external to the building you can have the grey water, which can easily be recycled and used for hand washing and other things, while the black water is, of course, the heavy sewage from the toilet, which cannot very easily be recycled—they are separate. Once it is already in there, it is very difficult to go into an existing building, especially a large multi-storey building, to keep the grey and black water separate. It would be a massive cost, and it would not be feasible, so it ought to be automatic for every building built from now on.

It is a matter of only a few dollars to install the pipes; they are made of PVC, after all. They should be installed so that, at a later date, if you want to join them together, yes, you can; but do it external to the building so that they can be picked up later on. They need to be marked on the plans or on the side of the wall and the junction is just below. I have done it in my own house at West Beach. They are separate to the outside of the house.

Now that we have water restrictions, we just cut the pipes, put a tap on it, and we have a bucket under it and we water garden with our greywater. It is probably illegal because it is not treated. I know that you are supposed to put something in the water to test it, but that will happen in time. I am sure that we will eventually catch up with the rules, but it is working very well at the moment.

We can do a lot of things, and it has taken a crisis for us to wake up to ourselves. Again, I commend my sons for what they have done. It is a 'feel-good' thing. I know that it is very expensive, but, really, we all have a feel-good thing about saving water because it is now a huge problem for the state. I support the bill.

Mr BROCK (Frome) (17:47): I think this bill is very important, as do other members of the house. I certainly support the bill in its current format, in particular a couple of sections, including quarterly billing. As the member for Finniss indicated, water is a top priority not only in South Australia but in Australia. In the Upper Spencer Gulf, in the electorate of Frome, which I represent, we are very reliant on water from the River Murray, which needs to be fit for human consumption.

This morning the Premier indicated that, with the money from the federal budget, the desalination plant at Port Stanvac will increase capacity to 100 megalitres. It will supply 50 per cent of Adelaide's water. We have to remember that other parts of regional South Australia come off the River Murray before it arrives in Adelaide. We need to ensure that we have water from the Murray-Darling Basin to Morgan, enough to be diverted across into other parts of regional South Australia.

In particular, the Clare and the Gilbert valleys are growing areas where there are lots of bores. I am coming to terms with the different regulations of the Clare and Gilbert Valleys Council with respect to access to River Murray water and bore water, and its scarcity. At the moment, that is impeding on a proposed, fairly large, tomato glasshouse opportunity, which could employ around 100 people. The issue is water and how they can handle it.

The other issue is the current pricing of water. We have all been very lucky to pay $1.54 (or whatever it is) per kilolitre. I do not think that anybody in South Australia would be able to tell you the price of water per kilolitre. People use water, but they do not have any consideration or understanding of its scarcity and the cost of getting it to regional South Australia.

Peter Davis, the Mayor of Port Lincoln, has been a great advocate for putting up the price of water to $10 a kilolitre. If that is intended to save the River Murray, I do not think it will. We will still use water for whatever reasons.

In terms of the Upper Spencer Gulf and the Hon. Graham Gunn's electorate, I said in my maiden speech that the centre of South Australia has the most untapped resources available, and the only thing holding that back is a supply of suitable water.

I have spoken to the member for Giles about the suggested desalination plant at Point Lowly, which is not guaranteed at this point, and we would still need to take it through the EIS. We would need to ensure that, as with Port Stanvac, other desalination plants in this state undergo an EIS to make sure that we have sustainable environmental outcomes.

The member for Schubert also indicated that, as part of the development plan, new houses have to install rainwater tanks. The minimum size of the tanks is 1,000 litres, which goes nowhere, especially if it is connected to the toilet or the bathroom. I believe, as does the member for Schubert, that the compulsory size should be in the vicinity of 20,000 to 30,000 litres per household. Today, rainwater tanks come in various sizes and shapes, and they can fit underground or under houses as part of the foundations. There are ideal opportunities to facilitate different rainwater tank sizes and styles.

Another point is that, concerning the State Strategic Plan, the Premier indicated this morning that the new desalination plant at Port Stanvac will supply 50 per cent of the population's requirements in Adelaide. The question needs to be clear. Is that based on the current population, or is that based on the state's population reaching the target of two million? We need to bear in mind that this is a great state but we do not want the population to stagnate at two million. We want to increase the population, especially with all the resources in the north of the state.

The other issue concerns opportunities for growth. Referring to Adelaide, going towards Gawler and Two Wells the growth factor is phenomenal. I come down here every two weeks. I am on autopilot at the moment when I come down here. Before you know it, you question whether you have gone through Lochiel or whether you have gone through Port Wakefield, and I am not speeding, by the way.

Mr Pengilly interjecting:

Mr BROCK: That is exactly right, member for Finniss. I want to reassure people here that I am not speeding. I have not done that, but I will have to be very careful because I might get caught going home tomorrow night.

Mr Pengilly interjecting:

Mr BROCK: Yes; that's right. Quite seriously, we also need to look at the growth that is happening in Adelaide and my question a minute ago was whether the desalination plant would accommodate future growth, especially with the Defence Force coming across here and with the growth at the submarine corporation and so forth.

This bill is good, and I certainly support it, but I am more particularly concerned about the continuation of the supply of water to the state here. As a lot of my constituents in Port Pirie and Clare have indicated, desalination plants can overcome some issues, but perhaps what we should be doing is looking again at bringing the rivers down from the north and redirecting them through the centre of South Australia and the Northern Territory not only to facilitate the mining opportunities up there but also to open the area up for agricultural crops, sheep and cattle.

It is one of those things that we take for granted. I know over the last two or three years we have been in drought, but let us really be honest: I do not think that state and federal governments over the last 20 years have really addressed the issue of water. Every time it rains, it goes to the back of our minds, and I am no exception to that. However, we need to keep that right to the front from now on, and make sure that we all work together.

I do not want to be sitting here in five years' time and find that nothing has been happening with desalination plants or other water coming back in. I have been a member of the Murray-Darling Association for many years. I have known the issue of the Murray-Darling Basin up there. I know the concerns from the other states up at the top end. As was mentioned this morning, we should not blame the cotton growers or whoever grows whatever crops up there. Farmers will grow and produce with whatever water is available, and, if they need 10 gigalitres of water or whatever it may be, they can use that and they can grow whatever crops they like.

I commend the bill, and I hope it gets clear passage, but at the same time, we need to ensure that we go further and make certain that we have not only desalination plants here but also future water through the centre of South Australia.

The Hon. K.A. MAYWALD (Chaffey—Minister for the River Murray, Minister for Water Security) (17:55): I thank honourable members for their contribution and, in closing the second reading stage, I would like to reiterate that the fundamental purpose of this bill is to introduce quarterly billing to enable people to have greater control over their water use and its cost, and to bring those two factors closer together so that people can be more aware of the cost of their use at the time they are using it.

There were a couple of matters that were raised during the course of the debate that I would like to correct on the record in relation to the costs associated with quarterly billing. The quarterly reading of meters was introduced from mid-2008 at a cost of approximately $1 million per annum. While this was introduced in anticipation of moving to quarterly billing of water use, it was also to augment our understanding of water use patterns, and these costs were recognised in setting prices for 2009-10.

Otherwise there will be no real significant ongoing administrative costs solely arising from quarterly billing, because the bills are already issued quarterly. From an administrative perspective, the number of bills issued will not increase: they will simply now include a water use component on the four bills rather than just two. A once-off system development cost has been incurred to implement quarterly water use and that will be in the order of half a million dollars.

In regard to water revenues, water use prices applied on a quarterly basis will raise slightly more than equivalent prices applied on an annual basis because of some seasonal issues but, because we knew that this would be the case, we made an adjustment in the price setting in the 2009-10 prices to offset this impact.

Also, through the transition, some customers will actually receive a benefit in that they will get more water on the lower tiered rate. That lower tiered rate will apply on their six month bill and then, potentially, on their first quarterly bill, so they may get more water supplied at the lower tier levels.

It has been estimated that that will result in revenue forgone for SA Water of about $8 million. It was decided not to go through the process of putting in place a transitional arrangement to enable all customers to have that same 120 for that particular year because it was very complicated and SA Water has forgone the amount of funds associated with that. I commend the bill to the house.

Bill read a second time.

[Sitting extended beyond 18:00 on motion of Hon. K.A. Maywald]

Committee Stage

In committee.

Clauses 1 to 7 passed.

Clause 8.

Mr WILLIAMS: I move:

Page 3, lines 28 and 29—Delete '1 June in any particular year' and substitute:

31 December in the year preceding the commencement of the financial year.

The opposition is more than happy to progress the third reading as expeditiously as possible so I will take very little time. I have spoken extensively on this matter. The opposition is not convinced that there is any sound reason to change the date to announce the new water price from 7 December to the beginning of June to be the last date. In fact, my amendment provides that, instead of being 1 June, the relevant date be 31 December in the year before.

The opposition believes that the reason that the government intends to move this date is that the people of South Australia will be hit with another substantial increase in water prices next year, and the government is very reluctant to announce how big that hit will be before the election. The opposition believes that the people of South Australian do not get many opportunities to judge their government but one opportunity will be on 20 March next year, and we believe the government should be big enough to allow itself to be judged on what it has done with water and, particularly, water pricing. Already we have seen over a 32 per cent increase in price cumulative over the past two years. As I said, it will be substantial next year and the government should be big enough and brave enough to let the people of South Australian know well before they go to the polls on 20 March.

The Hon. K.A. MAYWALD: The government does not support this amendment. The reason is that that date of 7 December was introduced to ensure that notice was given to customers who would receive increases in their water use charges at the end of that month as a consequence of the consumption year process within the existing legislation. In other words, to introduce an increase in water pricing from bills produced after 1 July the following year, the government needed to make a gazettal notice and advise the public on 7 December the previous year because some consumers would start that consumption year and they would receive that bill after 1 July from the end of December the previous year. There was a requirement to gazette it so that people would know what they were being charged for well before they actually started to incur those charges.

Of course, that meant that some customers who had a billing cycle that commenced in December got less than one month's notice as to how much they were going to be charged for their water use. With the amendments that we have put in place now, we are moving to financial year charging for water use. All consumers will commence on the new rate from 1 July regardless of their previous consumption years or when their meter is read. We believe that it is prudent that all consumers should have at least a month's notice and that is why 1 June is the date which we have enshrined in legislation that it will need to be gazetted by. It is important to note that this increases for many customers the actual time notification they receive, given that 7 December provided notification to those consumers who would have incurred charges at the higher rate in the same month.

The government will not be supporting this amendment. I think it is quite cynical for the member to say that the government has not been open and honest with the community. It has indicated quite openly and honestly that prices will increase over a five year period and that they will increase in the order of what they have increased over the last couple of price announcements. The government has certainly made no bones about the fact that it will be advising the community as soon as it knows the detail of what the extra may be in the next financial year in relation to the expansion of the desalination plant. The government has no intention of not bringing that to the attention of the community prior to the next election. It is important that people know that the cost of this infrastructure is, indeed, expensive but it is important to ensure that people understand we are doing this in the interests of water security for South Australia.

Mr WILLIAMS: As I said, I was looking forward to the minister giving a cogent argument as to why the date should be changed. I believe the minister has failed in that. In fact, I will go so far as to say (and the minister just intimated) that the government can be trusted because it has been out there telling people what it was going to do. The previous year the government announced that it was going to increase the price of water by about 12.5 per cent, which it did, and the Treasurer at the time (and probably the minister) said, 'We will be increasing it at a similar rate for the next five years.' The very next year the rate of increase was about 50 per cent higher than that. It was somewhere between 17 per cent and 18 per cent, which is a lot more than 12.5 per cent.

That is why the opposition is suspicious of this government. I can count; I know that the government will win the vote in this place, and I accept that. It may have a lot more difficulty getting it through the other place but, in any case, the people of South Australia will know, during the election campaign, what the intent of the government is. I think it will be much better for the government, if it were honest enough, to come out, accept this amendment and put the numbers on the table upfront. The people of South Australia are and will continue to be very cynical about this government.

Amendment negatived; clause passed.

Remaining clauses (9 to 13), schedule and title passed.

Bill reported without amendment.

Third Reading

Bill read a third time and passed.