Water and Sewerage Charges

The Hon. J.A. DARLEY (15:10): I seek leave to make a brief explanation before asking the Minister for Water and the River Murray questions about water and sewerage rates for retirement villages.

Leave granted.

The Hon. J.A. DARLEY: As I briefly outlined on 10 February, I understand that at the beginning of the 2014-15 financial year, SA Water sent out individual accounts for some units within a retirement village rather than billing the village as a whole. This was done as the result of a policy decision made by the Valuer-General and saw one village face enormous increases in its water and sewerage rates. I have asked several questions on this in the past and have been advised by the minister that SA Water are investigating the issue. I understand a resolution has now been found. My questions are:

1. Can the minister provide details of the outcome and the resolution?

2. Can the minister advise whether there was an agreement reached with the Valuer-General with regard to having future separate assessments for each unit within a retirement village and, if so, provide details?

3. Can the minister advise what reason, if any, the Valuer-General provided for changing her policy on this matter?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (15:12): I thank the honourable member for his most important question. As I have said in this place many times now, we were very concerned when the member for Florey and the Hon. Mr Darley approached the government with these issues around retirement villages. At the behest of the honourable member and the member for Florey, Frances Bedford, we investigated the issues that were raised by questions in this chamber or through correspondence.

It is worth going over a little bit of the history. The Valuer-General has formulated a policy that she believes addresses the inconsistent manner in which retirement villages are valued, I am advised. This policy seeks to have all independent living units individually assessed within a retirement village rather than the village having a single assessment.

The Valuer-General has been creating separate assessments for independent living units since 1993, I am advised. To date, 11,000 separate assessments have been completed, approximately half of which are for newly-built retirement villages. This policy was reissued in 2014 following approval from the Valuer-General, who has proposed to conduct the remaining 9,500 independent living units assessments over a five-year period starting from 2016-17

In the past, residents of independent living units generally paid a portion of a single SA Water bill, which was issued to their retirement village. With the Valuer-General's new policy resulting in separate assessments for each ILU, each resident now receives an individual account for SA Water and local government council rates which, in a number of circumstances, has resulted in increased bills for the residents.

As an example, recently 26 separate valuations were undertaken at the Para Vista Lutheran Homes Retirement Village and the financial impact of these assessments ranged from between $60 and $400 extra per annum per unit for water and sewerage services, taking into account each resident's eligibility to receive concessions from the state government.

As a result of this, the government has conducted a review of the policy to ensure that residents are not adversely impacted by this policy change in this way, and I am pleased to advise that the government has finalised its review of this issue and a solution has been formulated to ensure that existing retirement village residents will not be worse off by this policy.

Effective from 9 July 2015, SA Water has revised all bills issued to the Para Vista Lutheran Homes during the 2014-15 financial year to ensure that they are no worse off due to this change in the assessment methodology by the Valuer-General. SA Water has contacted the Para Vista Lutheran Homes to discuss the new billing arrangements, I am advised, and revised bills were issued and sent out on 10 July 2015.

To ensure impacted residents are not disadvantaged by the Valuer-General's single-assessment scheme, SA Water will levy a limited period Retirement Village Discounted Single Assessment (RVDSA). This initiative will run for a period of 10 years. To allow this to be implemented, the Valuer-General has agreed to not conduct any further separation of assessments on existing retirement villages until 2016-17.

The RVDSA ensures that current residents will not be disadvantaged as a result of individual assessments of independent living units. New villages or villages already subject to a separate ILU assessment will not qualify for the RVDSA scheme. A finish date in 10 years' time has been proposed in order to allow time for the Valuer-General to complete her review. It is expected that many of the existing residents will have left their ILU by this stage, and where the residents have stayed, they will have had 10 years to understand and prepare for the change.

To qualify for the RVDSA scheme, the Valuer-General will assess whether the retirement village is a single property as at 1 July 2015, except for the Para Vista retirement village, which will automatically be included. To support the RVDSA, a memorandum of understanding will be drafted and signed by the Valuer-General and, I understand, SA Water, Revenue SA and the Department for Communities and Social Inclusion. The MOU will support the timely exchange of information and provide proactive and coordinated communication and service standards. The MOU will set out arrangements with respect to:

a timeline for residents transitioning to introducing separate assessments for ILUs;

a proactive communication strategy;

an ongoing communication strategy to ensure all parties are aware of the expiry of the grandfathering arrangement;

applications for concessions being issued prior to invoices and bills, where possible;

working with retirement village owners to support their residents;

timely exchange of data between signatories to assist in identifying impacted residents, including the creation of a new land-use code by the Valuer-General; and

the service performance expectations for the provision of valuation information from the Valuer-General to SA Water, Revenue SA and DCSI.

It has been a long process. I thank the honourable member and the member for Florey for bringing this to my attention. Through bringing together these different agencies across government we have been able to solve the problem in a pragmatic way which will certainly address the current issues and will have a 10-year lead time for people to get used to the new system of independent living units being separately levied.