DRAFT WATER INDUSTRY BILL

The Hon. P. CAICA (Colton—Minister for Environment and Conservation, Minister for the River Murray, Minister for Water) (14:10): I seek leave to make a ministerial statement.

Leave granted.

The Hon. P. CAICA: Today I am pleased to have tabled the draft Water Industry Bill. This legislation will herald a new era of water management, one which will promote efficiency, competition and innovation in the water industry. The legislation will replace the Sewerage Act 1929 (SA), the Waterworks Act 1932 (SA) and the Water Conservation Act 1936 (SA). We no longer expect to have legislation that provides the minister with the power to access properties by means of horse, cattle or carriages, as in section 9 of the Water Conservation Act 1936.

The water industry is rapidly changing and developing, and we must change with it. The water industry in South Australia has responded admirably to recent drought and water security issues, and is now adapting in a timely fashion to the impacts of climate change. The industry has also needed to adapt to national water reforms, new industry operators, new technologies (such as desalination, recycling of waste water, aquifer storage and recovery), water trading and market maturity, and growing demand from population growth and economic development.

South Australia continues to demonstrate innovation in how we manage our water, and it is now time for us to have the legislative basis for a 21^st century water industry. This bill is a response to the commitment under Action 83—

Mr WILLIAMS: A point of clarification, Madam Speaker: as a matter of process I am questioning why this is being done as a ministerial statement and not as a second reading speech to a bill that the minister wants to introduce to the parliament.

The SPEAKER: The minister has tabled a draft document. He has not tabled a bill as yet, so he is speaking to a draft document, not to a bill. It is okay for him to make a ministerial statement in these circumstances.

The Hon. P. CAICA: Thank you very much, Madam Speaker. As I was saying before the interjection, this bill is a response to the commitment under Action 83 of Water for Good, which was to release a discussion paper in 2009 and introduce legislation by the end of 2010. I would also like to acknowledge the Commissioner for Water Security, Robyn McLeod, for her commitment and drive in developing this significant legislation for South Australia.

The challenges and complexities associated with the provision of water supply services and sewerage services are not unique to South Australia. Legislation of this nature has been developed nationally, with Victoria, New South Wales and Tasmania all passing modernising water industry legislation. The development of this bill is consistent with South Australia's obligations under the national water initiative, which requires use of independent regulators to set or review prices for the storage and delivery of water and wastewater services.

Such independent pricing determinations will provide transparency and cost efficiency to the community. So, like the gas and electricity industries, the legislation will provide for the appointment of an essential services commission of South Australia as the independent regulator for urban and regional water and wastewater services.

The bill will provide for proper standards for safety, reliability and quality in the water industry. It will also provide for an independent body for the enforcement of technical and safety standards for plumbing.

South Australia already boasts a number of innovative private sector and local government participants in the water and wastewater industry. This draft establishes a licensing regime for water industry entities, including private operators, to ensure the ongoing protection of public health, the environment and consumers. Consistent with Action 77 in Water for Good, the bill commits to a process for the development of a third-party access regime. While the time frame in Water for Good states that a third-party access regime will be developed by 2015, this draft commits to a process with a much shorter time frame; that is bringing a final report to parliament within 18 sitting days of 1 July 2012.

The report will address procedures for access seeking and dispute resolution, accessing pricing principles, compliance with national competition principles and, of course, public health, environment and safety standards.

The third-party access regime will ensure safeguards are in place to protect both private sector entrants and the public. These new water industry entrants will bring innovative water sources to the market for the benefit of our state. This is a significant first step and a demonstrable commitment by this government to progress a third-party access regime.

Members interjecting:

The SPEAKER: Order!

The Hon. P. CAICA: This legislation also seeks to strengthen the interests of our consumers. This will be achieved through the establishment of an independent water industry ombudsman, along with a consumer advisory committee. To avoid duplication, it is proposed that the water industry ombudsman scheme will be administered through our existing energy ombudsman scheme. I am advised that the Energy Industry Ombudsman, Mr Sandy Canale, is very supportive of this approach and is looking forward to the board of directors further considering this proposal.

Consistent with the National Water Initiative principles, the final bill will transparently reflect the costs associated with water planning and management and hence the true value and cost of water. For example, the resources needed to develop a water allocation plan are considerable—

Members interjecting:

The SPEAKER: Order!

The Hon. P. CAICA: —with time and money spent on research, monitoring and evaluation to help extractors to use the water. The government does not currently have a transparent cost reflective charge for this process or a comprehensive legislative basis on which to collect it. It is proposed that in setting such a charge the government should have regard to other levies already paid by water users.

Members interjecting:

The SPEAKER: Order!

The Hon. P. CAICA: It is also important to note that the proposed charge will not be collected for general revenue purposes. While the government will take independent expert advice on water planning and management costs, we would also like to receive comment and input from other stakeholders on the best way to progress this. Following consultation, the government will return to parliament with a clear position on the best mechanism to use. In light of this, an approach to recovering costs for water planning and management is currently not defined in the draft. This will be addressed in the explanatory paper which will accompany the bill.

An important facet of the legislation is the provision for an adaptive management approach to the state's water supplies. The legislation will provide a framework for state water planning which will require the minister to prepare and maintain a state water demand and supply statement which assesses the current and future demand for water supplies. Action 83 in Water for Good commits the government to introducing new water industry legislation by 2010.

Ms Chapman interjecting:

The SPEAKER: Order!

The Hon. P. CAICA: Considerable consultation has been undertaken on the drafting of this bill to date, including a public submission process earlier this year. I have decided, however, to table the legislation as an exposure draft to give the community and industry—and, indeed, if they so choose, the opposition—

Ms Chapman interjecting:

The SPEAKER: Order! The member for Bragg is very vocal today. She will be out of the chamber if she is not careful.

The Hon. P. CAICA: —a further opportunity to consider the drafted provisions prior to its introduction in parliament in 2011. I am mindful of the significance of this bill and would like organisations such as the Local Government Association, the Water Industry Alliance, the Conservation Council and the Plumbing Industry Association—and, dare I say it, the opposition—to have the opportunity to consult their members and provide feedback into the consultation process. The same applies to the broader community.

The first round of consultation occurred with a discussion paper on legislation issued in November 2009. The paper received 36 submissions from individuals, community organisations, industry, interest groups, and local and state government. The submissions were largely supportive of the proposed legislative reforms. The proposed industry regulation and water planning received the most positive discussion. I am advised that the comments overwhelmingly demonstrated positive support for the introduction of an independent price regulator for South Australia.

Since then, the draft bill has been developed in consultation with ESCOSA and SA Water. The Commissioner for Water Security and Department for Water officers have undertaken targeted consultation with the Local Government Association, the Water Industry Alliance, Professor Mike Young of the Environment Institute at the University of Adelaide, and the Energy Industry Ombudsman.

Mr Pisoni interjecting:

The SPEAKER: Order!

The Hon. P. CAICA: The tabling of the bill now facilitates a second round of public consultation, and I invite anyone with an interest in the future of our state's water resources to provide written comments on the issues and topics raised in the bill and this explanatory paper. There will also be further targeted consultation with key stakeholder groups during the summer break.

I also encourage all members of parliament to use the summer break to consider the bill so that when parliament resumes the bill may be debated in a timely fashion. This bill will create the legislative basis for a 21^st century water industry where the governance, legislative and regulatory regimes will reflect the diversity of products and true value of our most precious resource, whether it is surface water, groundwater, recycled water, desalinated water or stormwater.

The SPEAKER: Before we go further, I congratulate the Minister for Correctional Services on the birth of his beautiful baby. We hope all is going well.

Honourable members: Hear, hear!