Question Time

Water Pricing

The Hon. J.M.A. LENSINK (15:14): I seek leave to make a brief explanation before asking the Minister for Water and the River Murray a question on the subject of water prices.

Leave granted.

The Hon. J.M.A. LENSINK: It has been revealed that the Premier and Treasurer have had influence over the regulated asset base of SA Water through the second pricing order which was signed on 17 May 2013. This led, through the overestimation of demand being set at 190 gigalitres, to the overinflation of the RAB by some $700 million by the Premier's actions. On FIVEaa on 28 May 2013, Mr Leon Byner's show, the Premier claimed:

I don't think SA Water were expecting to have the cost ripped out of their regulated asset base in the way in which ESCOSA carried out their work.

He then went on to say that that would reduce the government's dividend by $800 million per annum. My question is: why did the Premier deliberately mislead the people of South Australia through this claim?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (15:15): Thank you, Mr Premier. I thank the honourable member for her most important question.

Members interjecting:

The Hon. I.K. HUNTER: Mr President—I note that I have been advised at some stage that, unlike other jurisdictions, there is no prohibition on premiers coming from this chamber. I am not sure if that is still the case, Mr President—

Members interjecting:

The PRESIDENT: Order!

The Hon. I.K. HUNTER: —but that is something that a number of people could aspire to, perhaps. Mr President, let me just put to bed this unfortunate question asked by the Hon. Michelle Lensink. Given the premise being so completely unfounded I will need to give some background information about water pricing.

Unlike privately owned utilities there are frameworks in place and pricing regimes put in place by this government preventing the generation of excessive profits and distributions by SA Water. This government introduced the economic regulation of SA Water by the Essential Services Commission of South Australia for this very reason. We have introduced transparency and accountability to prevent the earning of monopoly profits and excessive returns, and ESCOSA now sets a cap on the amount of revenue that can be earned by SA Water.

SA Water's first determination undertaken by ESCOSA was announced in May 2013 and covers the three-year period 2013-14 to 2015-16. Based on this determination the government was able to announce a decrease in prices of 6.4 per cent in 2013-14—a decrease in prices of 6.4 per cent. As promised for 2014-15, water and sewerage price increases have been limited to inflation or CPI in line with ESCOSA's determination.

Delivering those lower prices meant contributions to government were estimated to be reduced by $80 million over the three-year regulatory period. Over the period of 2014-15 to 2017-18 the government has forecast to receive $630 million in dividends and $284 million in tax equivalent payments, and over this time the government will make two very significant forms of return on this income. Community service obligation payments back to SA Water are $515 million, which lowers the water and sewerage prices and provides for community services, in particular ensuring that regional customers do not pay more than metropolitan customers.

Water and sewerage concession payments of $177 million benefit low-income water and sewerage service customers. This is important because the recharging of our system in returns to our communities primarily affects customers who are on low incomes or living in rural and regional South Australia. They are the major beneficiaries of these CSOs, and these are the beneficiaries that the Liberal Party opposite want to attack. They want to attack these people by actually taking away the deregulation that drops prices and privatising SA Water to their mates in the big end of town. That is their plan; that is their secret plan and yet we do not want to hear that from them because they say it is not true. But we know, from when we talked to their federal counterparts, that is exactly what they had in mind.

The Hon. J.M.A. Lensink: Oh, really! That's actually a lie.

The Hon. I.K. HUNTER: After taking account of—

The Hon. J.M.A. Lensink: That's a lie.

The Hon. I.K. HUNTER: —community service obligations—

The PRESIDENT: The Hon. Ms Lensink, the minister has the floor.

The Hon. J.M.A. Lensink: Well, he's lying.

The Hon. I.K. HUNTER: After taking into account community service obligation payments and water and sewerage concessions, a total of—

Members interjecting:

The PRESIDENT: Minister, please sit down.

The Hon. G.E. GAGO: Point of order—

The PRESIDENT: The Hon. Ms Lensink, it is totally unparliamentary to refer to the minister as being a liar.

The Hon. J.S.L. Dawkins: No, she didn't say that.

The PRESIDENT: You said 'he's lying'.

The Hon. J.S.L. Dawkins: She did not say that.

The PRESIDENT: She said he was lying. That would naturally mean you are saying he is a liar. I want you to withdraw that remark.

The Hon. J.S.L. Dawkins: Well, she doesn't have to.

The Hon. J.M.A. LENSINK: No, I will not withdraw that remark—that is a lie.

The Hon. T.A. FRANKS: On a point of order, the honourable member was not on her feet when she said those words, so I don't understand how she can withdraw them.

The PRESIDENT: I personally couldn't care less; she called across the floor and called the minister a liar.

The Hon. T.A. FRANKS: I'm asking you: how can she withdraw them if they weren't put on the record?

The Hon. J.S.L. Dawkins: She did not. She did not do that.

The Hon. J.M.A. Lensink interjecting:

The PRESIDENT: You said he was lying.

The Hon. J.M.A. Lensink interjecting:

The PRESIDENT: Well, just withdraw that he was lying.

The Hon. J.M.A. Lensink: Well, it's true.

The PRESIDENT: Are you going to withdraw it?

The Hon. J.M.A. Lensink: No, I'm not.

The PRESIDENT: Well, I've got no other alternative but to name you. Totally unacceptable, this unparliamentary behaviour.

Members interjecting:

The PRESIDENT: I honestly think, the Hon. Mr Dawkins, that the Hon. Ms Lensink can handle it herself without you sitting in the background giving advice.