WATER PRICING

The Hon. S.G. WADE (14:47): I seek leave to make a brief explanation before asking the Minister for Water and the River Murray questions relating to the pricing of water.

Leave granted.

The Hon. S.G. WADE: On page 19 of the Water for Good annual report 2012, it states:

Under the Water Industry Act 2012, ESCOSA is nominated as the independent economic regulator for monopoly suppliers of urban and regional water and wastewater services in South Australia. Under the pricing order issued by the Treasurer in September 2012, ESCOSA has prepared a draft determination of SA Water's regulatory review requirement, which has been out for public consultation in early 2013. Following the Final Determination, SA Water will set prices in accordance with the National Water Initiative pricing principles.

My questions are:

1. Were the 2013-14 SA Water prices set in accordance with the National Water Initiative pricing principles?

2. Why did the government initially announce a drop in the 2013-14 prices when most households and all businesses will pay more?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (14:49): I was just looking for my notes to answer the question. The Hon. Ms Lensink asked the Hon. Ms Gago about the recreational fishing insert in the Sunday Mail because I understand that was funded by my department, not PIRSA. But I will go to the question asked by the Hon. Mr Wade instead.

As I have said in this chamber previously, on 27 May 2013, ESCOSA released its final revenue determination for SA Water for the amount of revenue that can be recovered for its drinking water and sewerage services. This now means that the price of water for the next three years will increase no more than CPI, we are advised, providing customers with a period of stability. I am pleased also to advise that this year the combined effect of reduction in water prices in the absence of the water rebate means that most households will experience a small increase in their total water bill but less than CPI. The price of water will be cheaper in the coming year and, for the following two years, will not increase any more than CPI, is our expectation.

Eligible low-income earners and pensioners will also experience a small decrease in their total water bill as a result of the state government increasing the concession available by at least $30, and this is a very good outcome for South Australia.

This government advised that last year's price rise was expected to be the last significant increase and was part of the significant investment to ensure South Australia's water security into the future. Water prices have decreased by a nominal 6.4 per cent. I think I have given that advice in the chamber previously. Sewerage charges will increase by 1.6 per cent for metropolitan customers and 2.1 per cent for country customers, and the minimum quarterly sewerage charge will increase by 1.6 per cent and will be about $85 per quarter. The prices are set taking into account a range of factors, including the cost to deliver, maintain and enhance the provision of water and sewerage services. Prices in South Australia are also guided by the pricing principles outlined by the National Water Initiative and the South Australian government's commitment to statewide pricing.

The state government makes a community services obligation payment to SA Water so that customers in regional areas pay the same for water as city customers, even though it costs more to supply drinking water to regional areas.