Water Industry (Third Party Access) Amendment Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr WHETSTONE (Chaffey) (15:49): I rise to continue my contribution to the Water Industry (Third Party Access) Amendment Bill. The reason I am making this contribution is that obviously my electorate of Chaffey is underpinned by the economic platform known as water. The third-party access amendment bill is something that would not only complement river users or people who access river water but it has complemented all forms of water use right around the state. If I touch on where I left off, I was talking about environmental water and environmental works and measures which are a by-product of the Murray-Darling Basin Plan.

Environmental water that has been sold back to the commonwealth environmental water holder, technically, is third-party access water. That water has been in natural storage, it has then gone down as an allocation into the state and it was, once, an irrigator's allocation and it has now been sold to the commonwealth government under their environmental water holder portfolio and is being used as an environmental asset. To use water wisely as an environmental asset I think is critical for the future, particularly when we have shortages of water. We do not necessarily have a shortage of water in our storages but we need to use our environmental water efficiently.

Whether it be government or those people who need a competitive edge to be economically viable, you have to use your water efficiently. As I said in my remarks earlier today, it is the lack of will that is so frustrating in South Australia. We have the opportunity to better manage our environmental assets but we have a lack of will to actually enact change. We have a lack of will to look at how we can enhance what we already have.

I am sure that the member for Hammond would agree with me that the Lower Lakes are the lungs of the Murray-Darling Basin and are tell-tale. We have some deterrents in political circles and some deterrents in community circles in other jurisdictions who continually push the case that we should let the sea water back in, and it is an absolute furphy that South Australia should be a scapegoat for the mismanagement in other jurisdictions.

Just as importantly, the mismanagement is happening here in South Australia and the mismanagement is happening under the leadership of the current water minister, under the leadership of the Premier and under the leadership of this current South Australian government. It is their lack of will to enact any recommendations for environmental works and measures to get a better environmental outcome with the same amount of water. I could not think of anything simpler than to get outcomes with no extra cost or no extra water.

I will clarify the no extra costs. There are some environmental works and measures that will cost but, while things are relatively buoyant, while we still have water in storage and while we still have good inflows—below average, but still good inflows—we have a lack of will by the government to enact any reform at the lower end of our river. The next time we have a dry, as I have said, and we go to our other basin state partners looking to negotiate better sharing arrangements and environmental water for our environmental assets, they are, essentially, going to be very resistant. I was going to say that they would give us the bird but I will not say that because it is unparliamentary, Deputy Speaker, but that is what is going to happen: mark my words.

If we cannot lead by example down here in the delta of the basin, when we ask our partner states for a fairer share or a larger share of that pie of environmental water when we have low inflows and are desperately needing water, we will go begging. I think, for too long now, we have seen the lack of will, particularly on the part of governments, to act.

As I have said previously, the government tipped almost no water into the basin plan. South Australia had to contribute 183 gigalitres of water to the basin plan. That is, 183 gigalitres is South Australia's share of the SDL, which is the 2,750 gigalitres for the basin plan. I will talk about the 450 gigalitres of additional up-water shortly in my contribution, but I do not want to put the cart before the horse, so I want to deal with the basin plan as it stands today.

We look upstream, we look at below average inflows, and we are now dealing with issues around uncertainty again. Back in 2010, as I have said, one of the main criteria for me putting my hand up to come to this place and represent the good people of Chaffey but, just as importantly, to make a contribution to South Australia, was primarily around the uncertainty about the lack of reform of water management in South Australia.

I will not go on about the lack of environmental works and measures but, when this is taken by Hansard and put on record, I want people to understand that, when we have our next dry, this is exactly what is going to happen: we will have achieved nothing below Lock 1—not a cracker. The environmental works and measures will not have been undertaken, we will not have the environmental water to actually make those environmental assets worthy and make them work. What we will see is the Lower Lakes' water levels drop, we will see acidification in soils, we will see death, we will see that area under severe pressure again—and no-one wants to see that.

We had an economic base around Lake Albert alone of around, I think, just over $40 million before the drought. We currently have an economic platform of around $3 million around Lake Albert. It is screaming out for reform. What South Australia is screaming out for is reform. What South Australia needs is water reform in this state.

The only people who are reforming at the moment are the irrigators and their communities. They are the only people who have any will to make change, and the reason that they are doing that is they are droughtproofing their properties. While they have got access to full allocation, while they have access to some of the commonwealth government's grant funding, they are doing the right thing. They are putting in better management measures, they are putting in droughtproofing measures and they are addressing the future of their business. They are addressing the future of their communities.

This current government is doing none of that, and that is what really upsets me and anyone who has any vision about the long-term future of water sustainability and water security in South Australia. That is one of the other issues that I am urging the government to look at again and look at seriously.

I want to touch on the Premier's $2 million campaign coming out of the drought. I think it was absolutely outrageous that he sold this $2 million campaign to the people of South Australia. He was leading them to believe that he was doing what was best for South Australia. All he was doing was putting himself on a pedestal and saying that he was the champion of the river. I can assure you he is nothing of the sort. He has achieved little in South Australia.

He might say that he went and did a deal with Julia Gillard. He might get on the airwaves and the media might have thought it was just a crackerjack campaign, but what is going to happen in the next dry? That is something that I will continue to present to this parliament until the day of reckoning when we do have a dry and nothing has been achieved. The $2 million campaign by the Premier achieved not one drop of water for South Australia. What it did was give him a platform to stand up and tell everyone that he was the champion of the river. He was nothing of the sort.

Through that basin plan, through the good work of irrigators, farmers and business people, the idea was put to the federal government, through the state government, that we needed a financial package that returned a level of water that was going to help people in future irrigation and help people to be ready when we have our next dry. There were a number of parcels of water, but I will talk about the 3IP—the $265 million. That was put in place to achieve 40 gigalitres of water. It was administered through PIRSA and they put up their targets: $240 million went into the 3IP and $25 million went into research—it went into the Loxton Research Centre and some other areas.

The $240 million to achieve 40 gigalitres of water was put on the table and sadly, as quite often happens through no fault of the irrigators that are tendering for that money, all of a sudden the government departments are playing games with that money. They are trying to get bigger value for their buck. In round 1, they were paying around $5,000 a megalitre. All of a sudden, the brains trust made the move and said, 'I think we can get more water for less money.' Sure enough, it created a wedge between all the communities and businesses, both successful and unsuccessful.

I say to that department: why did you not apply a value per megalitre of water and then judge projects on their merit? That is what South Australia needed. We needed innovation and creative ideas, so that in 20 years' time that investment is still of benefit to those businesses, to the environment and to South Australia. Yet, businesses got money for tractors, and businesses got money for sheds and for putting concrete on their shed floors. That is not looking after the future of water efficiency.

That is by the bye, and to those businesses that were successful recipients of the $240 million, good on you. I urge those that missed out to consider implementing those changes without government assistance. Let's face it, government money is never easy money; there is no easy government handout. What I can say to the good irrigators and communities who were beneficiaries of that money, it was an overdraft in advance. All it enabled them to do was to speed up that investment into their business and on their property.

Perhaps those people will have to look at investing that money at a slower rate, but there are no tax advantages when you take government money. You are held to ransom by government money. I have had many people come to my electorate office concerned that they missed out on the funding, that it was not fair, that the criteria changed (yes, it did), and the amount of money changed per return of megalitre (yes, it did).

At the end of the day, it forced up the price of water. It fouled the temporary water market and increased the price. Let's face it, two years ago, there were growers paying $15 a megalitre for temporary water. As we stand here today, I think we are talking over $300 per megalitre of temporary water. Again, that is a real bugbear.

But, it enabled South Australian irrigation communities and businesses to fast-track their business models, upgrade their old plantings and old technology, and put some of the new technologies such as more water efficiency in train. I am sure that the previous water minister would agree that South Australia is well deserved. It was one of the early pioneers of water efficiency gains, and I think we once again have to lead by example into the next decade.

Other programs have been put in place by the commonwealth government and are administered by the South Australian government. These include the PIPSA and the riverine recovery programs. There are many programs that have come out of the basin plan. Out of the $12 billion in the federal government coffers, South Australia has received what I consider to be less than a proportionate share of that money, but beggars cannot be choosers.

I think what initially happened was that they made the call that we had already done all our efficiency gains and there was nothing to be achieved in South Australia. While the other states were beavering away and looking at how they could spend government money, South Australia fell foul by being a bit complacent. But, they certainly picked up the baton and have run with it over the past couple of years, so that is good for South Australia.

The Loxton Research Centre has been a beneficiary of the federal government's basin plan money. That will be in good stead there, because that is about research and development. As some people in this chamber would understand, the Loxton Research Centre in its heyday was the Mecca of water efficiency gains, soil moisture monitoring and irrigation application. What came away from that research centre was that the Riverland region exported a lot of its technology and research right around the world, and I think it was a great achievement.

All the growers who had embraced that technology were benefiting from it on farm, and while they were benefiting from it on farm, it showed us what could be achieved. I think what we are seeing today is the next generation of efficiency gains, but that was based on what was achieved 30 years ago. If we look at the Peter Magareys and the Peter McGlaschs and many more water experts who came away from the research centre, they do need to be congratulated. For those I have not mentioned, they were equally important in the role of the R&D needed. Again, I look at the BOOT scheme at Gawler and Virginia and I know that some great work has gone on out there. It is another area that has huge potential.

There is still a large amount of treated water that is being pumped out to sea that needs to be put into production, and that is another area where R&D will be very important. A public-private partnership is something that I think we should be prepared to embrace, and that is a public partnership with government to actually look at ways we can pipe that water out to productive ground and grow food. I think we need to target the best soils and the best contour country. I do not think we need to be just attacking it en masse and planting any available ground that the pipeline passes through. We need to carefully identify where the appropriate soils are for the appropriate crops.

I did speak about dam storage, and that is sadly a very expensive way of storing water. Obviously, the Salisbury council have pioneered in a sense a lot of the aquifer storage here in South Australia, but I can assure you that there are many more aquifers that have capacity for South Australia to store water in and also to be a part of a bigger diversity of water supply in South Australia.

Let's not forget about the desal plant, and which was once a 45-gigalitre plant that was a little bit more than duplicated up to 100 gigalitres. The government of the day decided that they could not resist doubling the size of the desal plant because they were going to get all this government money to do it. I will not touch on all the numbers, but what happened was the state government were outsmarted and it was all GST compliant. Sadly, it was something that the South Australian taxpayers had to foot the bill for, and while we had the powers that be pushing the agenda for doubling the size of the desal plant, the idea of diversity fell by the way.

The opportunity to put more water into aquifers and to re-use water, whether it comes away from Bolivar, the South-East drainage scheme or the Highland scheme in the South-East, was one that went begging. As we speak today, there are still many gigalitres of water running out to sea that could be diverted and that are going to be diverted into the south Coorong. It is going to be used as environmental flow, and I think it was wise.

There were deals done between I think the then water minister, minister Caica (before he got slotted), and our federal assistant water minister, Simon Birmingham. I think they did some great work for South Australia in negotiating some of the rule changes in terms of getting some of the works and drawings so that we could actually look at how we were going to redirect some of that water into an ailing bottom end of the Murray-Darling Basin. I think that along the way what we have seen again is that the new water minister has taken the easy option—he has played politics and given us all the spin in the world, but no action at all has come away from his brief. He will be remembered as the lack-of-action minister.

As I say, the Lower Lakes are the lungs of the basin. They are the lower end of the delta and they will be wanting because what we saw when there was a drought was that all things were bad; now that we have a bit of water back in the Lower Lakes, and we have our levels back up to pool, everything is fine, nothing is wrong and it will never happen again, but mark my words: it will happen again and South Australia will be the loser from a government that had the lack of will and the lack of capacity to implement changes and spend federal government money.

That is the thing that really gets my goat. It was federal government money that would have been put on the table to enact these environmental works and measures at no cost to the South Australian taxpayer, yet they were just not enacted. I will touch on the Save the River Murray levy before I take my seat. Again, it is another dirty trick that has come our way. While we see the Treasurer stand up and say, 'We have removed the Save the River Murray levy. This is a great win for South Australia,' who is going to pay the running and the maintenance costs of the Murray into South Australia? Where do we think that maintenance money came from?

It was not just coming out of general revenue, it was coming away from the Save the River Murray levy. What we have seen, again, is that the Treasurer cannot be trusted. The Treasurer is the trickster of political spin, and so that money will now have to be raised from another source. I am not a betting man but, if I were, I would say that it is going to come from NRM. It is going to come out of NRM levies. If it is not going to come out of the levies, it is going to mean reduced projects within NRM, and if we cannot reduce projects any more I am figuring that the levy will go up, and that will affect anyone who uses water.

Anyone who is part of the Murray-Darling Basin catchment is going to pay more money for the sake of running our maintenance costs within the basin and to pay the state's contribution. It really is just cost shifting, taking the cost shift from the regular metropolitan regional taxpayer in South Australia and lumping it all on regional South Australia—once again just a really little tricky bit from the Treasurer there, which, again, irks me and makes me wonder just what is going on. As I say, it really was a trickster of a prank by the Treasurer, but it was at cost to regional South Australians.

Again, we talk about the 2,750 gigalitres as the basin plan water. I will just touch on the 450 gigalitres of up water. To date, the 183 gigalitres will almost have been achieved as South Australia's contribution and it has all come from irrigators. So where is the 450 gigalitres remaining as up water to bring the total of 320? I will just clarify it. The basin plan is 2,750 gigalitres and the up water is 450. We will not have people believe what the Premier's spin is all about—that he achieved 3,200 gigalitres and that is what the basin plan is.

The 450 gigalitres was a sweetheart deal he did with then prime minister Gillard with no accountability. Where was that 450 gigalitres going to come from? Well, I guess we will have to watch this space because that water will be achieved by 2024, and by 2024 I just do not think that South Australian irrigators and irrigation communities can give up any more water, otherwise we are going to have no economic base, no economic platform to irrigate and to grow food and for industry.

It is going to be a real burden on the future of South Australia, particularly when we talk about our economy, particularly when we talk about our new free trade agreements and the Trans-Pacific Partnership agreements that have just been undertaken. Who is going to supply the commodities? Who is going to supply the food, the wine, the green products? Who is going to supply the meat? Who is going to supply all the products that are currently underpinning this state's budget?

We have seen what happens in resources and mining. You can only mine for so long until you are affected by world prices or the hole runs out, and when the hole runs out the resources are finished. When commodity prices go down, it becomes unviable to dig the hole, so we walk away from that mine. I think that every South Australian knows exactly what is happening at Roxby Downs and Arrium and right around South Australia in terms of its resources.

I take point with the Premier today saying that I was blaming the state government for the drop in job numbers and that it did not happen anywhere else. Well, that is totally incorrect. I think that the Premier was grasping at straws. The comment I made was that, while every other state is dealing with low commodity prices, every other state is dealing with resources at a low, their unemployment rates are in the sixes and ours are in the eights and growing. Our rates are heading north and those of the other states are heading south.

What is really upsetting me is that the Premier and the government are in denial about what we need here as an economic base—that is, water—and we need to be more competitive when it comes to sourcing our water. I urge the government that, instead of just spinning the story about giving third-party access, they need to enact it, they need to look at what was put in place, some of those opportunities, and they need to look at the SA Water policy in 2012, which said that we will enact third-party access, we will endeavour to make water access cheaper. It has not happened. As I said, the government is addicted—it is like a drug, the revenue from SA Water—and it is something they just cannot give up.

I say to the Premier and to his government that they need to go to rehab and get off the water drug because the water drug is costing every South Australian household dearly, and it is costing dearly every South Australian irrigator, every pastoralist, industry, every abattoir. Every water user in South Australia is getting absolutely smacked around the back of the ears by the high cost of water, and is all about the addiction the South Australian government has to high water charges, high sewerage costs and using SA Water as a cash cow for a very finite resource that in the very near future will be running short again, I can assure you.

It has not been that long since we had the dry in 2010 and the drought broke. We are in 2015 and I would like to think it happens every 18 years, but the way that the forecasters are predicting El Niño, and the way we are seeing water shortages around the world, these dries are becoming more frequent. There is an argument for human intervention in global warming, but I think it is a cycle and whether that cycle is being sped up by human intervention remains to be seen.

Third-party access needs to be something that can give South Australia a shot in the arm, some confidence. The Water for Good policy paper back in 2012 is something that the government promised us; they have not delivered. That is why the Liberal Party has introduced this Water Industry (Third Party Access) Amendment Bill. I am looking forward to the government supporting the amendments.

Mr TRELOAR (Flinders) (16:19): I congratulate the lead speaker for the opposition on his sterling effort, the statesman-like delivery of his contribution and his research on this bill. I rise also to make a contribution on the Water Industry (Third Party Access) Amendment Bill 2015. The intention of this bill is to provide a legislated regime for third-party access to South Australia's water and sewerage infrastructure, and not before time. It has been on the government's books since at least 2012, and it has taken them some time, despite encouragement from the opposition, to get to this point.

SA Water is a vertically integrated monopoly provider of potable water and sewerage services for metropolitan Adelaide households, the majority of industry and a significant number of country SA customers. A third-party access regime should and could be designed to enable other players in the water industry to utilise an existing supplier's infrastructure—which, in our case, of course, is SA Water's—and they would use this infrastructure to supply services and, theoretically, provide a level of competition to SA Water and in the water market more generally.

In theory, bulk water has been able to be purchased through trade since the liberalisation of water licensing and the most notable scheme is that run by Barossa Infrastructure Ltd in the member for Schubert's electorate, which provides approximately 6,000 megalitres of untreated Murray water to irrigate wine grapes, and I understand that that system has proved to be very successful.

Salisbury council's world-renowned wetlands and aquifer storage and recharge scheme is not necessarily an example of third-party access. SA Water's intransigence led to Salisbury installing its own pipe network system to service customers, so it is a system that works outside SA Water's jurisdiction. Competition is required in our water industry under national competition principles. As I mentioned earlier, the Water Industry Act in 2012 made some progress towards this and, in fact, the first time the government flagged third-party access was in its Water for Good program, which was prior to 2012.

The proposed bill appoints ESCOSA in a limited role as the regulator to negotiate, conciliate or arbitrate through the process. There are eight steps that ESCOSA would be responsible for. I will not go through those because they are well detailed in the bill, but the key issue, as far as we are concerned is that, of course, ESCOSA and the Department of Treasury and Finance/SA Water have differences of opinion on a number of accounts.

In fact, in its second submission to the bill, ESCOSA stated that the nature, strength and scope of the proposed regime is so limited as to materially impede the delivery of those benefits to South Australians. On that basis, ESCOSA recommends that those provisions be revisited There were, of course, a number of amendments passed in the other place and I understand that the member for Chaffey in this house has a number of amendments which he will also put to address the limited regime that would be put in place if this bill goes through in its current form.

I think this is a wonderful opportunity for the government, this state and SA Water to embrace an opportunity to deliver and take on board water security. As many in this place would be aware, water security on Eyre Peninsula is something that I have spoken about many times and will continue to speak about until it is properly addressed. I am going to take the opportunity today to touch on it yet again.

One of my first achievements in this place was to convince the Natural Resources Committee of parliament to undertake an inquiry into water resource management on Eyre Peninsula. It had been an issue for many since settlement because Matthew Flinders suggested that Port Lincoln would be and could be a suitable site for the state's capital, apart from the fact that it did not appear to have a regular and consistent water supply.

In fact, earlier today I spoke about the centenary of the Minnipa township. Minnipa really began to grow as a terminus of the Eyre Peninsula railway which arrived there in 1913. The laying of that railway track and the train itself led to the settlement of the inland of Eyre Peninsula and allowed settlers and wheat farmers to establish their towns and properties. One of the things the train did in those early days was cart water. Water was in such short supply and so desperately needed by the settlers that the train brought water to the communities along the track.

It was not until the Tod reservoir scheme was built, established and extended in the 1920s that reticulated water was supplied to Eyre Peninsula and that was as a result of the building of a reservoir in the Koppio Hills, just north of Port Lincoln, where the rainfall and topography is such that water catchment is possible. That delivered and secured reticulated water for a time. It was always less than ideal quality. I guess salinity was always an issue and, in later years, the water body became a product of its catchment and has been recorded as being high in nitrates and having traces of agricultural chemicals so it has been taken off line.

During the 1960s, the Polda Basin was included in the reticulated scheme. That was a wonderful idea at the time, but recent history has it that extraction exceeded recharge quite significantly to the point where that basin has essentially collapsed and has been taken off line and is now used wholly and solely by the landowners above the basin. Further supplementation of the water supply occurred with the southern basins coming online. Originally, the Uley Basin, Uley South, Lincoln Basin and Coffin Bay-A lens were all incorporated into that reticulated supply on Eyre Peninsula in post-war years and the Uley South continues to supply the majority of reticulated water on Eyre Peninsula.

It was in 2005 that the River Murray pipeline was extended from Iron Knob to Kimba, which then linked the Eyre Peninsula reticulated supply, that had been, up until then, autonomous from the rest of the state. It linked us into the Murray and there was some criticism of that at the time. I think it was a good thing. It provided extra water security at a reasonable price.

My predecessor, Liz Penfold, who was the member for Flinders for some 16 years, spoke often about water in this place and petitioned government many times on the water security issues of Eyre Peninsula and, famously, in 2002 minister Conlon at the time committed to building a desal plant on Eyre Peninsula. Here we are 13 years later and that desal plant has never been built. History will show, of course, that desalinated water is expensive water. It is there if security is a real issue but, as has been highlighted by the member for Chaffey, the extraordinarily large desal plant built south of Adelaide by this government has no doubt added to the cost of water in this state.

So what for the future? I do not believe that the water security issues on Eyre Peninsula have been addressed and it is not until they are, until we find another source of water and our water supply is supplemented that the pressure will come off the southern basins and the Uley South Basin in particular. Many concepts have been thrown around. People are making their own engineering solutions for their own problems. I know many farms have dams on them. Many farms now have large sheeted catchments which produce good quantities of water from relatively little rain, which they can reticulate privately around their own farms.

Desal plants are being talked about still, as well as improved catchments above the basins and accessing other sources of water. I think that this bill, as it is proposed—and with the amendments would make it even more so—would be an opportunity for not just South Australia but also Eyre Peninsula to secure that water supply. The reason I say that is that it invites third-party suppliers. It is not just third-party access but it is third-party suppliers, and I will give you examples.

Over recent years, the District Council of Ceduna has talked on and off with a particular company about building a small localised desal plant near Ceduna to supplement the town water supply. Ceduna is right on the very end of the Eyre Peninsula reticulated system. Water quality is not always good and water supply is not always adequate to meet demand, and this would go some way towards supplementing the town supply and taking the pressure off the system overall. They have not been able to achieve that. There have been many hurdles along the way, but I think that providing access to SA Water's pipes and infrastructure would provide an extra incentive or an extra opportunity for projects such as that, and they could be dotted all around our coastline at places like Streaky Bay, Port Kenny, Coffin Bay, Tumby Bay—the list goes on. Right around South Australia's coastline there would be the opportunity for small localised desal plants at relatively low cost to provide water security to small coastal townships.

There could be water from mining companies, and that is certainly part of the Iron Road proposal, which we will see in more detail very soon (probably later this year). Without knowing the exact detail of it, part of that proposal will be to source slightly saline underground water along with infrastructure corridor, and there is the opportunity for them to desalinate more than they require in their mining operation and feed into and supplement the Eyre Peninsula water supply. That is another opportunity that would not otherwise be available except as a result of this bill.

This bill could also provide an opportunity for landowners who, in the southern part of Eyre Peninsula or in other parts of the state, have been blessed with a good water supply on their own property. It could provide them with an opportunity to put water, as a saleable item, into the reticulated scheme. All in all, what South Australia needs desperately is water security. For the most part, we have a relatively low rainfall and, in a modern industrialised state, our water demands are high, and this bill goes some way towards addressing that.

Other towns have done their own thing along the way. Certainly there are towns that have managed stormwater and wastewater within small catchments and with their own engineering solutions, and that is a credit to them. Often town ovals and bowling greens, etc., are watered from run-off from town streets, and I commend them for their initiative.

The member for Chaffey talked about irrigators, and he has great experience in this area. He can speak with authority on the challenges that irrigators have in this state at the moment. I understand flows in the Murray are reasonable at the moment. An El Niño is forecast certainly, but it remains to be seen as to how that plays out. Of course, not all El Niños are devastatingly dry; sometimes it can mean extra rain, but we will have to wait and see on that. The thing about the River Murray is that flows do vary considerably from year to year and from decade to decade. Although flows are good at the moment and dams are relatively full, there will come a time when there is demand greater than supply.

I am a great fan of rainwater tanks also. I think they give an opportunity for householders to capture water that would otherwise run off, run down the street, away and into the sea often. It gives householders an opportunity to supplement their own water supply. With relatively low initial cost in the first instance, they can save money in the long term. Even if they decide just to use the water for their garden, that is, at least, a saving not just to their own pocket and to themselves but to the state's water supply as a whole.

The opportunities are boundless. I think they are only limited by our imagination and preparedness to do something different, and I think this bill does give us the opportunity, at long last, to do that. I compliment the member for Chaffey on his work and the dozen or so amendments he is going to put to this place. I also thank and congratulate our shadow minister, Michelle Lensink in the other place, on the work she has done. An extraordinary amount of work has gone into this—over some years, in fact—to get us to this point. I commend the bill and look forward to debating the amendments that will be put.

Mr KNOLL (Schubert) (16:35): I indicate that I will not be the lead speaker on this bill today.

The Hon. P. Caica: We know that. Why are you telling us the obvious?

Mr KNOLL: It's good to see you awake, Paul. I know the member for Mawson was boring you to tears. I rise to support this bill, with a number of caveats—caveats, obviously, that the member for Chaffey has dutifully put to this place. Can I say that third-party access for the water industry—what we are really talking about here is the ability for the private sector to get access to SA Water's monopoly infrastructure assets around South Australia—is a very important idea, and I will touch quite heavily on the Barossa Infrastructure Ltd scheme later.

This concept of better utilising this public asset in order to be able to generate growth (food production growth, predominantly) in South Australia is a very important concept. I know that grape growers in McLaren Vale and the Clare Valley are hampered by the high cost of water because they are not able to access Murray water or cheaper water supplies in irrigation schemes. It means they are at a structural disadvantage. It also means that they are a lot more reliant on weather conditions, which means their production volumes are a lot more variable, but they also risk doing damage to the watertables in their local water sources in the process.

It is really important for us to get this bill right. As previous speakers have mentioned, there are weaknesses in this bill. It is a bit frustrating that this is not the old college try when it comes to getting this sort of third-party access right. There is a lot more that the government could have done and should be doing (and that is what we talk about in our amendments) to give full weight to allowing the private industry to get access, and to pay fair and reasonable rates for access, to this infrastructure.

Before going to those amendments, the Barossa Infrastructure Ltd scheme (and I have a heap more to say about that) came about in the early 2000s because the Barossa had a problem. I can talk about this now. We did not talk about it at the time because it was a bit scary. There was increased salinity in the water and we were getting to a situation where we were going to have to look at significantly reducing the number of grapes that we produce in the Barossa Valley.

There were detractors of this scheme at the time. There were those who said that putting irrigated water into the Barossa Valley would lead to cheap commodity grapes and then bulk wine production in the Barossa that would kill the Barossa's brand and also lead to an oversupply of grapes that could potentially kill the entire industry. Those arguments had merit but they were outweighed by a group of people who saw that we needed access to a sustainable water source and access to better quality water. In the beginning, the idea was not about cost but it has turned out to be a fantastically cost-effective scheme down the track.

The scheme was the brainchild of a number of different grape growers, and chief among them was a gentleman by the name of Grant Burge, whom most people would know. He recently sold his winery to Accolade but still maintains a presence as quite a strong vineyard owner.

Burgey was one of the originals who came on board. A wonderful gentleman named Edgar Schild—who, with his wife, Lorraine, have Schild Estate Wines, which is again another great South Australian and Barossa wine company—had the foresight to invest in this scheme. A whole host of others got involved and, can I say, they were willing to put their own money on the table. They were willing to invest significant sums of money, also in the face of what is otherwise a capital intensive industry.

Producing grapes and producing wine—and both Schild Estate and Grant Burge are vertically integrated wineries, in that they own their own grapes as well as produce wine—is a very capital intensive business. For every dollar of extra sales, you need somewhere between $1.50 to $2 worth of capital to put into your business in order to be able to sustain that growth because, essentially, you only get one crop a year. You turn that crop into a product, it takes time to mature, and for red wine, for instance, you are only putting it into the market 12 to 18 months and, in some cases, three to fours years later, and you have to be able to hold on to that stock.

White wines obviously have a lot shorter turnaround time because you tend not to put them in oak, or at least not since people stopped drinking wooded chardonnay and started drinking this dirty New Zealand sauvignon blanc. To get back to the BIL scheme—

Mr Goldsworthy: Nothing wrong with savvy blanc.

Mr KNOLL: Sorry, a good Adelaide Hills sav blanc from the member for Kavel's electorate is beautiful and fantastic. To give you an idea, the annual value of chardonnay sold in Australia used to be around $400 million to $450 million; it is now down to around $150 million. Fair enough, more goes into champagne but, essentially, less than 10 years ago we bought about $30 million a year worth of New Zealand sav blanc, and we are currently buying somewhere between $300 million to $400 million a year. What is worse, at the moment, we provide a tax rebate for that wine to come here and be sold. It is an interesting—

The DEPUTY SPEAKER: Strange set-up.

Mr KNOLL: —an interesting set-up, that's right. I have been talking to people about how the legislation got through at the time. It was in the shadow of the GST changes, and I understand that there is a discussion paper about changing the WET rebate.

Members interjecting:

The DEPUTY SPEAKER: I beg your pardon.

Members interjecting:

The DEPUTY SPEAKER: Order! I need to remind members—

An honourable member interjecting:

The DEPUTY SPEAKER: Order, I am speaking! I need to remind members—do not make me stand up; I will be angry—the book is heavily ticked, and you are all just about on your second warning, so another outburst we have just had means that the member for Schubert will be speaking on his own, and it will deprive the rest of us of the other contributions I have on my list, and we do not want that to happen.

Mr KNOLL: Deputy Speaker, can I suggest that what I am talking about here is approximately $30 million worth of rebate on a WET (wine equalisation tax) that raises about $750 million to $800 million and has facilitated the growth of small cellar doors and wineries, some of which may be in the member for Kaurna's electorate. So, he may want to be a little bit careful when he talks about that because the WET scheme overall has been a resounding success in creating diversity.

We have gone from a smaller number of wineries to now having over 3,000 wineries in Australia, and the vast majority of the industry is situated in South Australia. We in South Australia have been a huge beneficiary of WET and what it has done to help diversify our industry and get many small craft players in and many great names of great wine that we now drink. That said, always with legislation there are unintended consequences or unforeseen consequences, and this happens to be one of them.

Interestingly, we stand here talking about a bill which has been around, I am going to say, for 11 or 12 years. It is funny that Barossa Infrastructure Ltd did not need the Water Industry (Third Party Access) Amendment Bill to get their scheme up and running. What happened was we had a premier called John Olsen, former member for Kavel, who was able, through existing legislation, to get the scheme up and running. He turned around to the SA Water executives at the time and said, 'I want you to get this deal done, and I am not going to stand for any excuses about why it can't,' and it got done.

It is interesting that we need here the Water Industry (Third Party Access) Amendment Bill to help provide for what is otherwise able to be done—manifestly, the pipes are in the ground, the water comes every day—without this bill. What I am trying to get at here is the fact that, whilst a bill like this enacted into law will help and there are some better mechanisms around forcing SA Water to come to the party, the truth is that if there was some decent political will this is something that could be done right now.

We can talk about the legacy of the Olsen years to South Australia. It is interesting, in the current light of manufacturing job losses, we have industries in McLaren Vale and the Clare Valley that could hugely benefit from third-party access but they have not been able to do so and, in the case of Clare Valley, did not take advantage at the time of what could have been extremely fortuitous for them. We have—

The Hon. P. Caica: John Olsen's legacy is us; you know that, don't you?

The DEPUTY SPEAKER: Order!

The Hon. P. Caica: Took you from the most outstanding position to—

The DEPUTY SPEAKER: Order!

Mr KNOLL: Deputy Speaker, it is obviously out of order to reflect on—

The Hon. P. Caica: —a hung parliament.

The DEPUTY SPEAKER: I have to—

The Hon. P. Caica: Look over here at Olsen's legacy.

The DEPUTY SPEAKER: —call the member for Colton to order!

The Hon. P. Caica: Sorry, ma'am.

The DEPUTY SPEAKER: You aren't really.

The Hon. P. Caica: I am sorry.

The DEPUTY SPEAKER: You are misleading the house.

The Hon. P. Caica: No, I'm not. I am not; that's got to be done through a suspended motion.

Mr KNOLL: Deputy Speaker, it is good to see everybody in the chamber is awake; I think that is fantastic. I think it is great that I have spurred members opposite into action, into high voice—

The Hon. P. Caica: Get back onto your computer. That’s what you're good at. You do put me to sleep.

The DEPUTY SPEAKER: Member for Colton!

Mr KNOLL: I think it may or may not have anything to do with post question time coffees.

The DEPUTY SPEAKER: No-one knows.

Mr KNOLL: Maybe there is a little bit of perk in the step from a little bit of caffeine. We are looking to create a number of amendments to this bill to try to strengthen it, and those amendments come in the form of helping ESCOSA to set prices up-front, and to broaden the scope of the scheme to at least include bulk water. I think that is a hugely important amendment.

We have agreed to amendments to put in time limitations for regulated operators, increasing penalties for regulated operators not providing information in a timely manner, reducing time periods for mediation, and amendments to the arbitration principles. All these things are designed to help redress the balance. SA Water is the monopoly provider in this area: they are the ones, in some cases like Clare and McLaren Vale, providing water. Certainly, it is not necessarily in their interests to do so, but it is in the broader interests of South Australia for this to happen. I reiterate that it could be done with a bit of political will that does not necessarily seem to be there.

I will talk about Barossa Infrastructure. In the Barossa, on the valley floor and out to the north-west, to Seppeltsfield and Marananga, it is suggested that 50 per cent of the 60,000-odd tonnes—at the moment it is low to mid-50s—of grape production that we crush a year is underpinned by Barossa Infrastructure Ltd water. This is an industry that this year exported $150 million worth of directly labelled Barossa wine and produced somewhere between $1 billion to $2 billion worth of wine that was either sold domestically or produced for other regions and sold under their geographical indicators. This is a huge boon for South Australia. Fifty per cent of my electorate, directly or indirectly, is employed by this industry; half of it is underpinned by the Barossa Infrastructure Ltd scheme.

The scheme has gone from strength to strength; it has actually almost paid off all its debt. What it has done is provide secure, high-quality water that comes from the Murray, goes down the pipes and sits in the Warren Reservoir—that we hope one day, as was envisaged by the member for Colton when he was the minister, will include recreational boating access; although, minister Hunter from the other place seems to have a different idea about that, and in a recent letter to me suggested that the government is not looking at recreational boating on the Warren—where the high-quality Murray water sits, and then the Barossa Infrastructure pipes distribute that water all over the Barossa.

At the moment, if you were buying water from SA Water, you would be paying, say, $3.45 per kilolitre, or has it gone up again? If you are on the Barossa Infrastructure Ltd scheme, at the moment for premium peak water you are paying 72¢—$3.45 versus 72¢. I am going to suggest that the cost of water would be about 60 per cent to 70 per cent of the cost of producing grapes.

Mr Whetstone: It depends how much water you use.

Mr KNOLL: It depends how much water you use. In the Riverland, it is a little bit more than what we do down in the Barossa. We are talking about a quarter of the cost of providing water, so what we have is a scheme that delivers a competitive advantage. That is a scheme that could deliver a competitive advantage for more regions in South Australia and should for more regions in South Australia, which is I suppose the purpose of this bill, but one that we would actually like to see enacted properly, as opposed to the Clayton's halfway house 'Maybe we will go through the motions without doing it properly' amendment bill.

BIL has hit some milestones. They went from an initial seven gigalitres to eight gigalitres, and have just celebrated the fact that they have bought and sold the ninth gigalitre of water. Of that extra 1,000 megalitres, 70 to 80 per cent of that water was sold to existing vineyards, making them more sustainable or able to replace SA mains water—a huge cost saving for South Australian businesses at this time when we desperately need to help improve the cost structure for South Australian businesses. It has also addressed a number of environmental issues, and these are the issues that BIL has addressed:

The potential for the use of BIL water to result in a rise in the regional water tables

I think that is a pretty good outcome.

The effects on the salt budget and the potential for increases in the salt load entering surface drainage as base flow

This is, again, another way they have helped to improve water quality in the Barossa.

The potential for the creation of perched water tables with adverse effects on plant growth, and for migration off-site

The effects of any changes in salinity and chlorine residuals on ecosystems and the implications of inter-basin transfer of water.

All these problems were mitigated by BIL.

The BIL has future plans, and can I tell you that I wholeheartedly support them in their future plans. The scheme was always designed to be most cost effective distributing 10 gigalitres of water a year. Now that the ninth gigalitre has come and gone and is being fully utilised, we look forward to that tenth gigalitre being approved by SA Water to flow through SA Water's system. In typical Barossa fashion, where we do not always get the support from government that we would like (and after 23 years of waiting for a Barossa hospital we can see where the deficiencies are), again what we have is a situation where the Barossa came together and was willing to put their own money on the table to get a better outcome for themselves. In this case, it did take a little bit of negotiation with government, and full credit to a fantastic premier in John Olsen in getting that job done and delivering for the people of the Barossa.

I would encourage other regions, whether it be the Clare Valley, McLaren Vale or a whole host of other people willing to get involved in this type of set-up, to band together and be willing to put your own money on the table, but do not let government off the hook. Do not let SA Water suggest that it is too hard, because those assets are there for the people of South Australia. The benefits and the growth that we have seen in the Barossa industry—and it is not only contained within Schubert: it also stretches across into the electorate of Stuart across the highway. If I look at some of the BIL water that supports the production of Grange in beautiful places like Ebenezer and Moppa in the member for Stuart's electorate, we are talking about grapes that get $10,000 a tonne. This is exactly the kind of production we want to support.

In fact, there was a beautiful story last week about Thorn-Clarke, which is a winery in my electorate—in fact it is a couple of kilometres up the road—and their 2012 Ron Thorn shiraz, which won best shiraz in the world. I will give credit to the fact that those grapes come from St Kitts, Dutton, which is just out from Truro in the member for Stuart's electorate, but I do not think that that bottle of wine was anything without the effect of Schubert on those grapes and the good work of Helen McCarthy as the chief winemaker and Sam Clarke to get that wine to market.

It shows the ingenuity and the ability of private industry to get in there and to do the job, and amazingly do the job in a way that is much more cost effective. I would implore those to use these instances, use this scheme, as much as they can. Let us hope that we hear announcements of more good news to come, and that is better financial underpinnings and better cost structures for irrigators and other food manufacturers into the future.

Mr PEDERICK (Hammond) (16:55): I rise to speak to the Water Industry (Third Party Access) Amendment Bill, which was part of a requirement of the National Water Act several years ago to allow third-party access to monopoly suppliers. The aim of this legislation is to provide that regime for third-party access to water and sewerage infrastructure in this state, but essentially the main operator we need to get access to is SA Water infrastructure, which is a vertically-integrated monopoly provider of potable water and sewerage services for this state, and that includes a lot of country and a lot of industry.

I would just like to make comment that there have been so many opportunities over the years for better ways to use water, for better ways to access water and for better ways to create potable water. I commend all the previous speakers for their contributions; and, as the member for Chaffey rightly put, the River Murray is the keystone in this debate, and certainly his electorate, my electorate and the electorates of the members for Stuart and Schubert—pretty well every electorate in this state—are connected in some way to the River Murray. Whether it is direct supply, whether it is just-in-time supply, whether it is through allocation or whether it is piped 700 or 800 kilometres to Ceduna, where about 20 per cent of its potable water use comes from water from the River Murray.

I think that we should have learnt so many more lessons in what has happened with the millennium drought which lasted around 10 years but which really bit in those years between 2006 and September of 2010 when it was such a relief to see that murky Darling water flow down past Murray Bridge and out through to the mouth, because we were in dire straits—we were in more than dire straits, I can assure members.

Apart from being the member at the bottom of the river, for many years I was the shadow minister for the River Murray during that time and there was a whole range of proposals put up about what should be done to work with water on the river, what should we put in place, what should not be put in place, what should not be done but, in the end, some common sense prevailed (although there are a few wild ideas out there).

We saw the river drop about two metres, which created a lot of slumping. We saw a lot of infrastructure south of Lock 1 (which is most of my electorate, or all of my electorate), and it was more than a worry, it was disgraceful that it was allowed to get to this when we have seen so many manufactured water channels in the further upstream states. That being said, I do not want to bash them too hard. I want to think about what more could have been done by the government even though major reforms have been made in the last 40 or so years, particularly in the Riverland with upgrades to infrastructure. Whether it is sprinklers in the first instance, then drippers, closed systems and converting channels into pipes, we are the leaders in this country. We can show a lot of states and a lot of countries, quite frankly, how best to utilise water to get the most out of it.

Certainly, there is a whole range of things that were getting thrown out into the ether during the drought, and one was about keeping water for Adelaide. If we did not have Adelaide at the end of the River Murray, I think most of my electorate would have been sold out. Unless you have a million people hanging on the end of a pipe, I do not think we would have had the forbearance of some people in regard to what did and did not happen in the end. There were certainly ministers and people in departments planning to build things like the Wellington weir—lock 0, it is called. This structure was to be built from of a lot of stone. There is no shortage of limestone in my electorate, and it would have cleaned up a load of stones. A lot of contractors would have made a lot of money.

Contractors were coming to me and saying, 'Adrian, I've got to apologise, I put my name down as a potential contractor.' I said, 'You've got to make a dollar. If you weren't doing it someone else would.' This would have been a sinking structure that was going to cost hundreds of millions of dollars from the time it was first put in, and then it would have to be topped up. What I found most interesting was that property owners on either side of the proposed structure were at the stage of being compulsorily acquired by government and had to enter into confidential agreements to allow access to the river. They did sign those agreements, and roads were constructed and gates were put in, but thankfully the weir did not go ahead.

Mr Goldsworthy interjecting:

Mr PEDERICK: Yes, we did. It might have been Nalpa station and the McFarlane property on the other side. This would have been a disaster for about $500 million of producing country and would have just written off everything below Wellington. It was certainly the desire of some ministers and some people in departments to put this in place with no thought for those people—no thought at all. It was just a panicked response to keep water supplies for Adelaide. In fact, my property at Coomandook is on the Keith just-in-time pipeline, and it even got to the level of discussions, because I had one meeting with the former minister, and they were going to put in a desalination plant at Tailem Bend. I was even asked by some of the authority people, some departmental people, 'What do we do with the salt?' I said, 'It's not my problem; it's your problem. If you've got to the stage that you need to desalinate water at Tailem Bend, that is your issue.'

It got very close; in fact, I know that bottled water was being stockpiled for emergency supply. Thankfully, we managed to just get through that, and the madness of the Wellington weir did not happen. We saw the Langhorne Creek and Currency Creek producers get on track and put in a pipeline, and because of a barrier potentially being built at Wellington they put the outtake at Jervois for a bulk unfiltered water supply to take water through to the 7,000-plus hectares of vineyards at the end of that pipe around Langhorne Creek and Currency Creek. That is the only way that those people kept going. It cost a lot of money, whether it was high security that they paid for through that pipeline or lower security water, they put in a system which went in very rapidly, and I commend everyone involved in that work.

Also, I look at the issue around the Lower Lakes, around Lake Albert, where some people, dairy farmers, are paying $5,000 a week to truck water to their dairies just to keep going. That is just a ridiculous amount of money. Below Lock 1, where we once had about 130 dairies, there are about 20-odd now. As the member for Chaffey indicated earlier, there is the potential, with the full use of water and land around Lake Albert, to produce over $40 million and now it is down to about $3 million of output. It has had a massive impact on the local community and on the school, and that flows right through the community to sporting clubs—netball clubs, football clubs, cricket clubs, etc.

Almost at death's door, the federal government came on board with over $100 million that was administered through the state government. I am sure the state Labor government did quite well out of it. They put in an emergency pipeline down around Meningie so people could have potable water. The contractors did a fantastic job. They had teams of rock saws going and teams of men. I have to take my hat off to those contractors. Once they got the bureaucracy out of the way—and that was the biggest hold-up—they got that pipe in the ground as quickly as they could. They even put in hook-up points for communities that did not want to hook up, like Wellington East. There is a point there so that they can hook into that pipe in the future, so they were future proofing some of these other areas if need be.

That work was put in, but now we find that the water is too expensive for these people who are used to having allocations drawn off the River Murray. They have to pay, I think, $3.32 a kilolitre at the moment for water through the pipe. It is making them unviable, and it is not just dairy farmers. There are beef farmers in that area who are just finding it ridiculous. Out of every seven cattle they sell, they have to sell one beast to pay for water for the rest, and that is hardly profitable because you have all the other costs—feed, management—

An honourable member: Levies!

Mr PEDERICK: Yes—levies. You have to hand it to farmers. When they are put under the pump, they come up with innovative ways to beat the system. Certainly, in recent years some private pipelines have gone in, and this exemplifies the madness where there is not a fair access scheme, and I do not think even this gives fair access. It is a step in the right direction but it is so weighted towards SA Water that it is not funny.

People are putting in their own pipelines and they are basically paying for them within two years. Two farmers—one is a dairy farmer and the other is a beef farmer—spent a couple of hundred thousand dollars on putting a pipeline straight into Lake Albert and they have access to the lake directly with a pump shed. They paid for that within a couple of years out of what they would have paid in SA Water fees.

The community around Meningie has said, 'Let's get on that.' Certainly people were pressuring me before the election: 'What's going to happen? Are we going to be able to access the SA Water pipeline after the election?' I said, 'Well, there are a couple of caveats—we've got to win.' Sadly, we did not do that. I said that we do not know the state of the books to know how cheaply we can put water through that pipeline.

To me, it looks like you are still a fair way ahead if you can access water out of Lake Albert for about 15¢ a kilolitre and pump it to your farm. There are third-party schemes. Clare Valley has just instigated one, and I know the BIL scheme has been there for a long time with untreated water. Clare Valley is different—that is treated water. I think they have managed to reduce the price by a dollar a kilolitre, which is a lot of money, but it is still a fair way ahead of what people are able to do with these private schemes.

Some of the private schemes to put in water that are being proposed are about $1 million. Essentially, because of the greed of SA Water and the state Labor government, they are not going to make a cracker out of any of this water that comes out of these private pipes. They are going to be run up the other side of the road, basically in the same line as the SA Water pipes, so we have a duplication of infrastructure.

An honourable member: Madness!

Mr PEDERICK: It is madness and it is crazy, but that is the way it is. They are doing it and they are getting on with it, and it is not just those sorts of things that are going in for people to save their hide, save their business and keep them operating locally. Certainly, I commend the Coorong Local Action Planning group and Coorong council for some of the field days they have had on how to access cheaper water.

People are revitalising bores. As you get closer to the sea, between Coomandook and Meningie, it is too salty. It is too salty on my place at Coomandook, but people are revitalising those bores, getting them going again and doing a bit of desal or accessing wells and shandying it with potable water. There are also some schemes where people are digging a dam on a gradient, lining it with plastic and catching rainwater, but those sort of schemes cost at least $100,000 each.

People are spending lots of money, up to seven figures, in light of the fact that they can get a better deal than if they used it out of the pipe. I know the member for Chaffey talked about what is happening down there and about the Lake Albert connector because here we are, five years since the drought finished, and we still have water that is well over 2,000 EC units in Lake Albert. That would not be acceptable if you were in Adelaide, but that is what it is. If the Lake Albert connector went in, that would clean it up and give better water for everyone in that region.

It is not as if the Meningie and Coorong region is taking enough belting. We have the recent issue of the New Zealand or long-nosed fur seals, and they are a serious issue—another side effect not just on the environment and on the Ngarrindjeri totems but on the fishing industry, which I believe will be wiped out before this government does anything. I think there are people within government who would be quite happy to see an MSC accredited fishery wiped out, and that is a disgrace when there are people on their knees—and I had a meeting last Wednesday night—and there are fishermen on suicide watch who do not know where to look because there is no real management of these seals.

They have talked about underwater firecrackers and noise emitters. The firecrackers will not happen until November and then they will only be operated by DEWNR staff who are contractors. Whether they will be anywhere near a fisherman is another thing. This is a community that is struggling and they continue to struggle, and I hope we do not see dire consequences before something happens. People are being looked after and looked out for, and there was a reason that a doctor spoke on suicide and depression for an hour last Wednesday night.

Certainly, in regard to water that is being put back into the system, I believe infrastructure upgrades are the best way to do that and, as was mentioned earlier, 2,750 is the main game. All the way along it has been a bit of a pipe dream of the Premier's for 3,200 gigalitres. He is a late player in the field in thinking he is going to save the River Murray. Buying water is the cheap and nasty option. Yes, it is good to buy a little bit of water, but I believe hundreds and probably well over a thousand gigalitres of water could still be obtained through infrastructure upgrades in the northern basin.

Many of us have been up through that way; I know the member for Chaffey and I have. Some people do not think it is that simple. They think, 'We will just do the quick and dirty option and buy water,' and it all sounds good and fuzzy. That is great. You can destroy communities. I am all about supporting communities. I do not support open channels and that sort of thing. I support putting it into pipes or covering those wider channels like the Mulwala Channel at Deniliquin which would be pretty difficult to put into pipes; if you did, it would cost a fortune—in the billions, as I believe it is 160 kilometres long. There have been plenty of opportunities for more reform in infrastructure in the Eastern States. I know the Wimmera in Victoria has put many hundreds of kilometres into pipe, which has saved many gigalitres of water, and we need to push for these things to happen.

What I will say in my closing few seconds is that this bill is a step in the right direction, but it is a long, long way off—it is about 10 per cent there. People will keep creating their own ways to access water, to gain water, to catch more rainwater and get on with the job. At the end of the day, when it is too late, the government will realise they are losing out on much valuable money into Treasury coffers because they have not allowed the proper access regime so that people can function, be viable and basically live their lives well here in this state.

Mr VAN HOLST PELLEKAAN (Stuart) (17:15): I am pleased to follow my colleagues who have spoken on this bill already, particularly the member for Chaffey. As we all know, he represents the Riverland region, which has a very large section of the River Murray within South Australia. Not only is he an expert on what happens there but he is extremely knowledgeable about what happens with water more generally across our state.

You have heard from other country members of parliament from this side of the chamber on this topic as well because, as I hope all members would understand very clearly, there is no more important natural resource than water across our entire state. It is the country members who talk about this a lot, but it is true in Adelaide as well: water is a fundamental building block for our state. It does not really matter what your interest is—whether you are a city person who is quite happy living, working and entertaining yourself in the CBD or a remote country person or an outback person who rarely every goes to Adelaide and perhaps lives on a sheep or cattle station, an Aboriginal community or somewhere like that—water is absolutely fundamental to everything we do in our state.

In the electorate of Stuart, which is obviously a pretty large electorate, we have a lot of different solutions for water supply. The member for Hammond was just talking about the need to be flexible and innovative, and that is very important. We have a large amount of water in Stuart that is SA Water from the Murray. A large amount is supplied by SA Water but not from the Murray. We have a great deal of non-SA Water supplied water. Within that, we have a very wide range of quality. Also, as I mentioned before, we have a large number of innovative solutions, and I will give a few examples of these.

In Port Augusta, it is pretty straightforward: pipelined Murray water into Port Augusta, with a diversion off the Morgan-Whyalla line. At Wilmington, where I live, we get SA Water supplied water out of an old abandoned copper mine, which was abandoned because they struck water and it is now an accidentally man-made underground aquifer. In the Upper Mid North area and southern Flinders area (the Orroroo, Melrose and Booleroo district), they get SA Water supplied water from underground bores, from genuine naturally occurring underground catchments. The towns of Morgan, Blanchetwon and Cadell are right on the Murray River.

The township of Leigh Creek, which unfortunately is in the news a lot at the moment, gets their non SA Water supplied from the Aroona Dam. Alinta manages all that water supply for the township of Leigh Creek, as did Alinta's predecessors when they operated the town. Another very interesting example is the township of Copley, where the progress association supplies the water to the residents of Copley through their own small town reticulation system, and that is supplied by a pipeline from Leigh Creek, which is the Aroona Dam water.

There is a wide range of different ways for things to work in my electorate, including the northern Barossa, just the very tip of the northern Barossa, which is in Stuart, on the BIL scheme. There are also many communities and many remote homes and homesteads which look after themselves essentially on rainwater. Really, what I am talking about there is water for human consumption. I can go on and on about the wide range of water like the BIL's scheme. There is an endless list of other ways that people supply irrigation water and stock water, but I just mention those to give some examples of the type of diversity that is around, and SA Water is a key player in all of that.

SA Water, in my opinion, is a key player in the water supply in places that they actually would not like to be in. I am sure that SA Water, which supplies bore water to the town of Orroroo, would much prefer not to have to do that job but it does. I am sure SA Water would much prefer not to have to supply water to the towns on the Barrier Highway out from Terowie, that is, the five townships that run out to Cockburn on the New South Wales border where the water that SA Water supplies is sometimes provided by locally built dam catchments which are then settled, filtered a bit and reticulated around the town. Sometimes, those catchments have bulk water carted in to fill them when there is no natural rainfall or run-off to make it happen. Sometimes, SA Water has to deliver bottled water to provide townships with drinking water. Again, it is more examples of diversity and flexibility.

On a tangent, Deputy Speaker, I can tell you that it frustrates us no end to have very good reservoirs owned and operated by SA Water (such as Baroota Reservoir, Belalie Reservoir and the Beetaloo Reservoir, which is just outside of my electorate in the electorate of Frome) which actually do not supply hardly any water to anybody at all—certainly, no drinking water. They supply a little bit of irrigation water, but barely that.

I will not go through all of the arguments that my colleagues have put with regard to this bill because they have done so particularly well, especially the lead speaker, the member for Chaffey. My message is simply that, when it comes to South Australia, not just the electorate of Stuart, we need to have flexibility, we need diversity and we need to encourage innovation with regard to the supply of water, within Adelaide and to the furthest flung parts of the Western Australian and Northern Territory borders, the Queensland and New South Wales borders, etc. We need to encourage innovation so that we get the most efficient and most appropriate results.

I touched before on the fact that SA Water, I believe, would love to not supply some of the communities it does, and I think that people living in the real world (whether it be government, whether it be MPs, whether it be mums and dads at home or whether it be graziers and irrigators) will have to provide some flexibility as well because it would not be fair to say, 'SA Water supplies us here and we have that as the backstop and we are going to hold onto that but we want all of the flexibility and innovation opportunities to come to us alone.' I think it is going to have to be a two-way street. I think it is going to have to be a situation of, in some cases, negotiation, and that is how the real world works.

I am not trying to say that there is any one of my communities that does not deserve what SA Water is obliged to give but it may well be that there are situations where we can get more from the government. I know SA Water is an independent statutory body but, essentially, it is government-overseen and taxpayer-owned so, for the public to get more from the government one way or another, the public will also have to be innovative and flexible and willing to participate in that.

I cannot, for the life of me, understand why third-party access has ever been a problem and why it should ever be a problem. I think we should be considering fourth and fifth-party access where necessary. The member for Schubert gave a very good example in the BIL's scheme that has been a tremendous support for his electorate, absolutely vitally important for his electorate, and very positive to that southern section of my electorate as well. It happened without any legislation like this. If there is political will, it can happen. It is a great shame that there is not the political will to just get on and do the job and that the government feels it needs this sort of legislation when, clearly, it does not. I believe that a large part of that is the government's reliance upon SA Water profits—the hundreds of millions of dollars of profit every year that SA Water provides to the government—so that the government can tax people less. It taxes them another way. Basically, it is a tax on water.

I respect the fact that SA Water operates with an independent board and independent management, but when, essentially, a wholly government-owned body, which is a monopoly in our state for the most basic, necessary commodity of water, is making hundreds of millions of dollars of profit, then that is a government tax. It translates directly to being a government tax. The government needs that money. I am not saying that they do not need the money and it does not have to come from somewhere, but my fear is that SA Water will get dragged, kicking and screaming, towards doing deals where they think they will not earn as much money by doing the deal as they would earn if they did not do the deal.

For SA Water, as an independently operated body, that is logical, rational behaviour because they have a structure and a set of objectives and requirements. Essentially, they are told, 'Do it properly. Focus on quality, safety, efficiency, etc., but earn lots of money.' That is what they are told to do, so I do not begrudge them at all for the fact that they do that, but we will have a situation where SA Water, quite naturally, will say, 'Why would we do this deal? We will lose money. It will be a less profitable organisation if we do this deal than if we do not do this deal.' Juxtaposing that against the point that the government could make SA Water, one way or another, do this anyway if they really had the political will, it is a shame that we need this legislation.

Nonetheless, third-party access is incredibly important. I believe that we should be doing everything that we possibly can to make water supply across our state as flexible and innovative and as cheap as possible within the confines of safety, both with regard to delivery and operation and water quality and that sort of thing. With those few comments, I will wind up.

Mr TARZIA (Hartley) (17:27): I also rise today to support the Water Industry (Third Party Access) Amendment Bill 2015. I commend the member for Chaffey for his enlightening address to the house. He obviously has an enormous amount of experience in this area, and we are all better off for listening to his speech today.

Water obviously affects every electorate and, as my colleagues on this side of the chamber have alluded to, it is an area that we can all be doing much better in. Every single one of us has parks in our electorate. Every single one of us has reserves and grounds, either utilised by a school or a sporting organisation, in our area, and every one of our electorates and these groups will benefit from more competition. We know that competition will create much better standards. Ultimately, it should provide cheaper prices for the consumer. This is an area that we certainly need to take very seriously. We need to encourage competition in this area.

In my electorate of Hartley, for example, there is an ongoing water issue where, perhaps if there was more competition, incompetence would not be allowed to flourish. Residents in Lochiel Park have waited for over seven years now to receive the recycled water that they were promised. Many of these residents only bought into the area because this government promised recycled water to some of them. If we had more competition, if there was another player in the market, perhaps we would have a different result in Lochiel Park, and perhaps we would have better results, standards and prices across the state.

When I look at the history of water prices, I note that the latest data that we have confirms that, over the past 12 years, water prices have actually risen by 236 per cent, which is absolutely outrageous, despite inflation only rising by about 41 per cent during the same time.

There have been allegations of price gauging, and there have been allegations that water is being used to milk South Australians to prop up an ailing South Australian government budget, as some of my colleagues alluded to. There have been scathing allegations made of SA Water by people such as Mr Kerin recently. I do not have to bring up that history, but he is not the only one to cast doubt over the water issue. The bottom line is that we can be doing much better in this regard.

The Water Industry (Third Party Access) Amendment Bill aims to provide a regime in a legislated manner for third-party access to South Australia's water and sewerage infrastructure. SA Water is a monopoly provider of potable water and sewerage services for households in the city, the metropolitan area, the majority of industry, and also a substantial proportion of country South Australian customers, as we heard today.

It is argued that a third-party access regime should be designed. It would enable other stakeholders in the water industry to use, for a price, an existing supplier's infrastructure which, in reality, would be SA Water, for example, to supply services. More importantly, it would provide a level of competition in the market. We understand that bulk water has been able to be purchased through trade, as was touched on today, since water licensing was liberated. Obviously, the scheme that comes to mind would be that which is run by Barossa Infrastructure Ltd, as my colleague alluded to. I am told that provides approximately 6,000 megalitres of untreated River Murray water to irrigate wine grapes, as we heard.

If it were not for the former water minister and premier, John Olsen, driving it through SA Water, arguably this scheme would not have even happened. We on this side of the chamber have for some time now argued for a robust third-party access scheme, and this has been a key point of difference between us on those opposite.

We all know that competition in our water industry is certainly called for, and it is a requirement under national competition principles as well. The bill that we have in front of us appoints ESCOSA in a limited role as the regulator of a negotiate/conciliate/arbitrate model. There are a number of steps in the process for an access seeker to apply for access to a regulated operator. For example:

A regulated operator has 30 days to provide an applicant with a brochure regarding the terms and conditions on which it is prepared to make its infrastructure available, the procedures that it will apply, and information about prices and costs associated with access;

On application, a regulated operator must provide technical information to an applicant regarding current utilisation and the likely price or reasons why access cannot be provided. The regulated operator can also charge the applicant for providing this information;

The applicant will then write to the regulated operator to outline the access that they are seeking and their proposed terms and conditions, and then that operator would have a right to seek more information. The regulated operator would then have one month to notify the applicant and ESCOSA of its decision—

and it goes on. I note that there were several submission to the February 2013 DTF paper, and there was a preference theme for light-handed regulation that came through. Obviously, none of the submissions would advocate for full retail contestability; however, the main thing is the agreement for a light-handed regulation approach. We have actually been told privately that, obviously, for a number of companies who do bid for SA Water's business, it is going to be unlikely for them to make formal submissions, because they would have to err on the side of caution. They do not want to be accused of undermining SA Water or being critical of it. They would have a vested interest in this, and so that is why it is up to us to stand up for these companies.

There have been a number of key issues raised through the submissions, which I will in turn touch on. For example, I note that ESCOSA welcome the move towards the development of a third-party access regime, but they do remain concerned that 'the nature, strength and scope of the proposed regime is so limited as to materially impede the delivery of those benefits to South Australians'. When you go onto some of these other submissions, and I look at SA Water, they make a number of suggestions regarding minor drafting issues for consideration. I encourage the government to look closely at these, for example:

1. Transitional arrangements;

2. Appropriate qualifications for conciliators and arbitrators;

3. Clarification on accounts and record-keeping requirements;

4. Information required from access seekers;

5. Requirements to provide confidential details of other third parties to an access seeker and various publication and consultation requirements which can be resolved easily by the 'first-in-time' principle;

6. Simplification of the application process;

7. Extension of the period of time before a dispute is deemed to have arisen; and

8. Reciprocal rights.

Then we have Business SA. Business SA obviously a long time ago have recommended that a legislated state-based access scheme be implemented. They say it should apply to bulk water transport, water distribution transport, local sewage transport and bulk sewage transport. They also suggest that the Essential Services Commission of South Australia be appointed the regulator and, as I said, that a light-handed regime be applied, a negotiation framework modelled on other similar systems be considered, and a robust dispute resolution procedure be implemented as well.

With those comments, I will support the bill and I will also be supporting the amendments if they are put by the member for Chaffey on this side of the chamber. I commend the bill to the house.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (17:37): I rise to speak on the Water Industry (Third Party Access) Amendment Bill 2015 and commend the member for Chaffey for his generous and informative contribution to the parliament in the debate of this matter. He has comprehensively outlined the importance of the bill and the movement towards allowing third-party access and contestability of water in the state, together with highlighting the deficiencies which need to be addressed.

From my assessment, this is a movement which is a bit like observing a horse being dragged to water and then forced to drink, the government (being the horse) taking a sip and then continuing in its resistance. I think it is a good start that at least the horse has come to the water and it has taken a sip. It has been years in the coming in an environment of repeated promises. It is singularly an area of difference between our side of the parliament and the government, and its advance at glacial pace has been extremely disappointing. However, it is here, there is significant room for improvement, and I think the government should seriously look at the amendments which have been foreshadowed by the member for Chaffey, having clearly rejected them in another place when this matter was debated.

I will not traverse the purpose of the legislation and its particular areas of deficiency, other than to say that the introduction of ESCOSA to provide supervision of SA Water, which is going to have such a comprehensive level of control in relation to this industry contestability, is interesting. I say 'particularly' because I have heard the Treasurer say, 'We want to open the opportunity for insurance in the motor accident world, and to do that we have to have a very strict regime of protection. We have to have supervision in these environments,' yet here, when they are leaving a monopolist in charge (some would say it is a bit like leaving the fox in charge of the henhouse), they seem to be somewhat lax in the scrutiny they are expecting under this regime, given that water is such a critical element—it is not for only the survival and prosperity of the state but the sheer survival of our population relies on water distribution, in addition to the safe accumulation and distribution of that resource.

It is disappointing to see this very limited role that has been provided to ESCOSA and the importance of expanding the scheme to at least include bulk water. As the shadow minister for infrastructure, I watch with interest a number of the acts of the government that have caused me concern. As the local member for Bragg, we have ongoing issues in relation to water. First of all, can I say that SA Water has come to the party eventually in providing the residents of Skye who live eight kilometres from the GPO finally with mains water. It is in a hugely high bushfire-risk area—

Mr Gardner interjecting:

Ms CHAPMAN: —yes—which the capital cost is nearly $20,000 per household, but it is finally implementing it. I was pleased to hear on the weekend a report back from one householder who said that there had been some discussions about the physical arrangements for that and that it is progressing well. I am pleased that it has finally happened, but nevertheless there was a delay in this, and leaving that population without adequate drinking water services when its access to bore water was becoming increasingly saline and therefore inalienable to them had been appalling. That has been remedied and to leave them in the plight of bushfire risk was scandalous, but nevertheless it has occurred.

The Greenhill water supply, which was originally established through the local board, is absolutely critical for bushfire management. It was actually established to have a tank ready for the residents of Greenhill, which has fewer than 100 residents and so is called a settlement in South Australia, not a town. Some members would remember it being under fire literally on Ash Wednesday. Fire ripped up both sides of the hill and many dwellings were incinerated. So that, thanks to the local people who got together to secure water, is now underway.

We are having ongoing difficulties in the Uraidla/Piccadilly area, an area which is flooded with water each year, and the government in its wisdom has introduced a water levy through the NRM board only to find this year that we had the scandalous situation where the Minister for Water under a ministerial direction directed that the Adelaide and Mount Lofty Ranges NRM Board apply some of its funds towards capital infrastructure, including the upgrade of the Patawalonga system—a worthy project in its own right but scandalous to think that the government should require the NRM board, in my view, to apply it.

It has responded by saying, 'Well, we're not actually applying the water levy to it: we're going to apply the land levy. We may have to cut out some other projects that we need to deal with it under their jurisdiction, so we're waiting for their response on that.' The Uraidla township, I should explain, is very commonly replicated across the state. It is a township of some hundreds of people. It has an incredible history. It comprises a hotel (which is about to be refurbished and reopened), a local football club, a local school, a local store, residents old and young, and a very healthy community ethic.

They rely entirely on their own water supply from a local farmer, through a bore, and they pay a fee to receive it. It is a minor fee to the extent that access is provided, but by the good grace of that owner they use the water. They have their own rainwater tanks, but essentially they are completely independent of SA Water. They sit in a catchment zone, so they cannot expand their town. They are under severe restrictions under planning laws.

As the local member, I have tried to negotiate with planning ministers. Mr Holloway comes to mind, Mr Rau, and I think there was one in between—I cannot remember now—but they have all been quite useless when it comes to allowing this town to become independent, even though they have made provisions in every other way. They do not ask for much and they do not get anything from the state government and little, frankly, even from the local council.

Nevertheless, when I suggested to SA Water some time ago that they might like to buy the property that has the bore on it, to actually administer this service to the local people, they were not interested. They could have picked it up for less than $1 million at the time. How ridiculous it was that they did not acquire the asset is beyond me. In any event, that is what we are dealing with—a situation where people are living without the assistance of SA Water and, when they do ask for it, comes a heavy cost.

At a statewide level, I am very concerned about SA Water and its operations. I can recall a circumstance when minister Conlon, covering transport and infrastructure, announced that he would put a desal plant on the West Coast. They are still in a dire predicament in respect of water supply both to their town and for future enterprises. If they are going to be a future developing area in relation to mining, they are going to have to get that right and get on with it. The second, of course, is the desalination plant, which is a scandalous waste of money—$2 billion. We had—

Mr Whetstone: 2.3.

Ms CHAPMAN: It was 2.3, the member for Chaffey and shadow minister reminds me. It is an absolutely scandalous waste of money. Recently, I was informed about the information centre, which I think was put up at a cost of about $5 million and which is visited by schoolchildren and others who are interested in looking at the interactive technology within this facility that tells them about desalination, the importance of water and so on. It is a very pleasant little information facility. However, the children who visit are not even allowed to go into the desalination facility to have a look at it, and it is actually a magnificent piece of infrastructure. It is a huge four pumping station operation. The tragedy for South Australia is that we have had to pay $2.3 billion for it, its utilisation is negligible and it is a massive cost on an annual basis to South Australians.

We can add to that the over $400 million project for the north-south interconnector pipeline and pumping stations which traverse the eastern side of Adelaide. They have ripped up brand-new roads, ripped up local streets, disrupted businesses, caused a disturbance. It is a massive cost essentially to move the water from the Happy Valley region to the Hope Valley region, a consequence of the establishment of the desalination plant. Here is the wicked aspect of this that I think is just a scandalous example of where governments and their allegedly corporatised boards—namely, SA Water in this instance, failed to investigate alternatives, failed to cost alternatives to providing this water supply pipeline from the south to the north in anticipation of future planning. It is absolutely disgraceful.

The excuse of the board is that they are told by the government what to do. The excuse of the government is that SA Water is an independent corporation and does what it wants to do. Somebody at the end of the day has to take responsibility for the scandalous spending of money which is not directed and targeted at benefits which are important for the survival and prosperity of this state. Somebody sometime is going to have to take responsibility. How do they get away with it? These people just kept spending someone else's money. They do not care how much it costs. They just do not care, but the people out there who are having to survive and need a chance to continue to live in South Australia at a reasonable cost, to have some prosperity, to be able to grow produce for the state, are just completely alienated from being able to do that.

Then of course we have the consumers. They are mostly people in metropolitan Adelaide and some other regional towns that are supplied by SA Water. The water is predominantly captured in the Adelaide Hills, a significant portion of which I represent here in the parliament; the rest of it, of course, is sucked across from the River Murray. The amount of rain we have largely determines how much we take out of the River Murray for metropolitan consumption, and it is piped across to Kimba and other parts of the state—the lifeblood of the state.

Again, we have a situation where the money that is spent on infrastructure is, I think, without adequate scrutiny. Why do I say that, given that we have a Public Works Committee in the parliament? It is because SA Water present as the infrastructure builders, approvers and funders of water infrastructure in this state. They present the material, brief as it is, to Public Works—sometimes scandalously less than they make public even to other entities, I note—and they expect that they will be approved.

I think many of the members on the Public Works Committee do the best they can to ask questions and require answers, and they are fairly short in the delivery of those. I will use a current example for Public Works, which is the O-Bahn project. The Department of Transport turned up with their proposal after the stop-start, stop-start of this project several weeks ago, scandalously short on information. Members of the committee have to ask for more information to be provided and I think it is meeting again this week.

We are yet to see whether these departments and entities, which have a life of their own, actually start to deliver and provide to the parliament some explanation of what they have done—that they have looked at a number of options, that they have costed other options, that they have rigorously assessed what is the best model, whether it is building a road or a piece of water infrastructure, and that they are delivering a recommendation that is consistent with the best possible outcome for that region and for South Australian taxpayers. That is what we expect them to do and that is what the public expects them to do, and it is not acceptable when they do not.

I did note, in the Auditor-General's Report today that in the 2014-15 year, there had been a $2.7 billion repayment of equity to the government by SA Water in addition to the hundreds of millions of dollars every year that they provide as an income stream to government. They have been for a long time a cash cow of the government. We could speak all day about the consumers who, even at the domestic level, are paying an outrageous cost for water to local residences, but that of course just increases the long-term borrowings of SA Water and just transfers debt.

It makes Treasurer Koutsantonis's figures look better and reduces his liabilities on his balance sheet but it puts huge extra borrowings on SA Water. The experts say that this sort of situation should not occur. They should not be raiding out money from the Motor Accident Commission—over $800 million last year—or requiring its entities, such as SA Water, to massively extend their borrowings to repay their equity debt. It is just not acceptable.

Then on the other hand, they run entities such as the Urban Renewal Authority. That is a cot case if ever I have seen one. That had a massive debt in its operations again this year. It was claimed initially to be because they had not completed the first stage of the Gillman deal, which was to bring in $45 million by 30 June.

We find, on reading the Auditor-General's Report today, big problems with that entity. They are well over $100 million short and it is scandalous mismanagement of an entity that is responsible for buying and selling and for the management of hundreds of millions of dollars of the government and the people of South Australia. That is their responsibility and they are just hopelessly inadequate.

The list goes on. It was concerning to me today to hear from the Minister for Transport and Infrastructure that he did not even know whether his own department had put in a business case yet for the Northern Irrigation Scheme. This is an irrigation scheme out of the Bolivar treatment works which is at saturation point, pardon the pun. It is fully utilised. It has been known for some time that we need to expand that. We have had ministers for planning come in and say that we are going to expand the north, we are going to have population growth, blah, blah, blah, blah and no water to go with it.

What is wrong with these people? They have a job to do. They should be doing it properly. That business case should be over there with Infrastructure Australia and it should have been there years ago. I think the irresponsibility of this government is just scandalous.

There are ministers one after another who do not keep an eye on these things, make hollow promises and end up having to cancel projects after the whole razzamatazz of the announcements with the press release, the coffee mornings and all this nonsense. They then have to cancel them because they have not got their act together and properly managed these major projects.

They are sucking out the financial oxygen of the reserves of this state. We have hardly anything else left to sell except probably a few billion dollars worth of Housing Trust stock because this government have sold everything to keep living in a manner to which they have become accustomed, which is to spend whatever you like, to not give a toss about what the responsible management of that is and who cares if we just run up more debt.

I say it is a good start that we at least have the bill. The government have been kicking and screaming like a horse being dragged to water to introduce some level of third-party access and contestability, but let's get it right. Do not come into this parliament with this duplicitous approach of saying, 'We will just let SA Water manage all of this on the side. They do not need to have supervision.' They then come in here and pretend that they give a toss about integrity, scrutiny, supervision and transparency when it comes to the Motor Accident Commission and other private players in the insurance world. Do not come in here and speak with a forked tongue.

Debate adjourned on motion of Mr Gardner.