Ministerial Statement

Water Pricing

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (14:52): I seek leave to make a ministerial statement.

Leave granted.

The Hon. I.K. HUNTER: Today, the Essential Services Commission of South Australia (ESCOSA) has released its draft determination to set SA Water's maximum revenue for the second regulatory period from 2016-17 to 2019-20. The government welcomes the draft determination. If ESCOSA maintains a similar revenue path in its final determination, the government will be able to deliver a cut in water bills to South Australians.

Over the last decade, this government has made significant investment in water infrastructure, such as the desal plant and the interconnection pipeline. Our water pricing policies are designed to ensure fair and equitable service delivery for all South Australians, irrespective of where they live in our state. Today's draft determination recommends overall revenue reduction of 3 per cent or $160 million over four years, averaging $40 million a year.

This draft determination proposes real reductions, resulting in a total revenue reduction, as I said, of 3 per cent. This would achieve a further reduction in bills for SA Water customers once prices are set following ESCOSA's final determination, due to be released in June. It is a continuation of the reduction achieved as a result of ESCOSA's first determination in 2013, which delivered a reduction in water prices of 6.4 per cent in 2013-14 with price increases limited to CPI for the following two years.

Together with the $50 million annual revenue reduction from the first determination, this draft determination means SA Water customers could together be saving $90 million per year compared to 2012. Independent economic regulation of SA Water is working. It has driven transformation within the business to ensure it is more customer focused and reduces its costs to deliver savings to customers. ESCOSA, in its draft determination, has recognised the work that SA Water has done in this respect.

The draft determination is now open for consultation until 24 March. I encourage all stakeholders and interested members of the public to use this opportunity to have input into the determination which will be the basis of water prices for the next four years. The government and SA Water will be working through the detail of the draft determination, and I look forward to coming back to the house to advise of the final water prices following ESCOSA's final determination, due to be released in June.