WATER PRICING

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:10): I seek leave to make a ministerial statement.

Leave granted.

The Hon. K.O. FOLEY: I rise today to inform the house of the water prices for the 2010-11 financial year. Members would be aware that the government is obliged to set water prices in accordance with National Water Initiative principles established under the Howard Liberal government in 2004. These principles oblige the government to set prices to recover the capital and operating costs of the water system in each state.

Members will recall that in December 2007 the government announced the first in a series of significant water price increases to recover the cost of the government's record investment in water infrastructure and to better reflect the value of water. This record investment to secure South Australia's water supply and decrease our reliance on the River Murray includes the new 100 gigalitre desalination plant powered by renewable energy.

The Adelaide desalination plant is at an advanced stage of construction, and is on track to deliver the first water 12 months from now. The investment also includes the Network Water Security Program to connect the north and south metropolitan water supply systems, and River Murray water purchases for South Australia's critical human needs, as well as rebates to encourage the public to buy water-conserving products.

Water prices will rise in real terms by 21.7 per cent on average (before inflation) from 1 July 2010, with the fixed annual water supply charge rising by $4.80, or 3 per cent. The average South Australian household water bill will increase by $1.62 a week in 2010 under these new water prices. Sewerage charges will rise in real terms by 0.8 per cent for metropolitan customers and 1.3 per cent for country customers, with actual rates to be announced before July 2010. The new water prices for 2010-11 will apply only to water used from 1 July 2010, and they compare favourably with the current 2009-10 prices charged interstate.

South Australians have been doing their share to help us through the drought. During the 2008-09 financial year the average South Australian household consumed about 190,000 litres, a 32 per cent drop compared to the 2002-03 drought year, when annual household use averaged 278,000 litres.

Pensioners and commonwealth low income Health Care Card holders will continue to be assisted in adjusting to the new prices, with concessions of 20 per cent of the total annual water bill, from a $95 minimum to a $200 maximum. The existing $95 sewerage concession also remains in place.