Answers to Questions

Desalination Plant

In reply to the Hon. A. KOUTSANTONIS (West Torrens) (25 November 2019).

The Hon. S.S. MARSHALL (Dunstan—Premier): I have been advised:

The commonwealth government has agreed to provide funding to support the production of up to 100 gigalitres of water from the Adelaide Desalination Plant. This will reduce the need for water to be taken from the River Murray to meet local urban water needs and will allow the release of water to farmers in the southern Murray-Darling Basin.

The commonwealth payment to increase production at the Adelaide Desalination Plant will not result in any budgetary benefit to the South Australian government as the funding will only cover the cost differential between sourcing water from the River Murray and producing an equivalent volume of desalinated water.

In addition, the purpose of the commonwealth funding is to release water to irrigators in the southern Murray-Darling Basin region who are predominantly located in New South Wales and Victoria. The funding is therefore providing a national benefit rather than a benefit to a single jurisdiction.

The Commonwealth Grants Commission is not likely to assess this component of the funding as having any impact on GST revenue sharing relativities. This is due to the commonwealth payment not providing any net budgetary benefit to South Australia and due to the national purpose of the program.

The Prime Minister has provided written confirmation that up to $10 million of drought assistance that will also be paid to South Australia as part of the agreement will be excluded from the assessment of GST revenue sharing relativities. Consistent with normal practice, the Commonwealth Grants Commission will be advised of this direction as part of terms of reference issued for annual relativity updates.