Parliamentary Committees

Natural Resources Committee: Natural Resources South Australia Business Plans and Regional Levies 2016-17

Adjourned debate on motion of Hon. J.S.L. Dawkins:

That the report of the committee on Natural Resources South Australia Business Plans and Regional Levies, 2016-17, be noted.

(Continued from 8 June 2016.)

The Hon. G.A. KANDELAARS (17:10): As a long-term member of this committee, I appreciate the opportunity to speak to the Natural Resources Committee's report. First, I would like to acknowledge the Chair of this committee from the other place, the member for Ashford, the Hon. Steph Key, who continues to be an incisive, inclusive and steadfast Chair. I thank the member for her contribution and stewardship.

I am sure that everybody in this place will agree that our long-term economic and social wellbeing depends on the good management of our natural resources. No more important to us here in South Australia is water, a precious resource that needs to be valued and protected on behalf of our community, whether that be for residents, for irrigators or for our environment.

The South Australian government has invested a great deal in ensuring that our natural resources are properly managed. It has also taken up the fight to our interstate colleagues to ensure that they understand how precious a resource it is for our community. A big part of this is South Australia's internationally recognised natural resources management model that directly involves communities in managing a healthy and productive environment.

NRM boards undertake a wide range of important work, including supporting premium food and wine production, ensuring sustainable industries, conserving natural ecosystems, encouraging community participation, developing climate change adaption plans, supporting regional tourism opportunities, and leveraging a significant amount of commonwealth funding. I commend the NRM boards for this important and vital work. I sincerely appreciate the NRM boards that presented to the committee during the last few months. It was a valuable experience to hear from them and better understand the vital work they do on behalf of their communities. However, the boards need funding in order to stay in this work, especially in light of falling commonwealth funding.

Regional NRM levies are an important part of sharing the cost of managing natural resources, including water planning and management. The water levies support, among other things, water allocation plans to ensure that we manage water resources sustainably in order to safeguard food production and agriculture into the future. Other activities associated with water management include water licensing; compliance activities; science to support the development and management of water resources; the development, review and amendment of water allocation plans; and debt recovery.

Currently, the state government contributes $43 million per year towards ensuring our water resources are managed sustainably. Recovering some of the costs involved in water planning and management is in line with the government's commitment to the National Water Initiative's user pays principles, which we committed to nationally in 2011. This is a national commitment.

During the course of the committee's work and the contributions from various members in this place and the other place, no-one has argued that the principle of user pays as outlined in the National Water Initiative is wrong. No-one has argued that those who benefit most from strong water planning and management should not be contributing to the cost of that. We should be clear that, during the course of the committee's work, we heard that 84 per cent of the contribution to water planning and management funding came from the state government, including SA Water's contribution of nearly $18 million. So, we should be clear that we are talking about a partial cost recovery. In effect, it amounts to approximately 16 per cent of what will actually be spent in 2016-17.

The government is bearing 84 per cent of the cost. We heard on the committee of the NRM boards taking social and economic impact statements to guide their levy rate decisions. I am advised that the South-East and the South Australian Murray-Darling Basin NRM regions undertook an independent assessment—an independent assessment! It showed that for most farms the combined levies, that is, land and water, are less than 1 per cent of a total cost of running a farm.

This government has chosen not to implement full cost recovery, but rather to continue to subsidise these costs to provide some protection to water users from the financial burden. The government is taking a sensitive approach to introducing a contribution from beneficiaries to water planning and management costs. It is important to note that, while all jurisdictions have taken a different approach to issues of water-related cost recovery, South Australia's charges are lower compared to our interstate competitors. As set out in the ACCC's most recent water monitoring report, our $6.30 per megalitre water levy proposed for the South Australian Murray-Darling Basin for 2016-17 is well below the equivalent charge in New South Wales, which is $10.51 per megalitre, and Victoria which is $11.05 per megalitre.

I believe this is a sensible and well-balanced outcome. It is based on extensive community consultation, which has been undertaken by NRM boards, as well as through thorough social and economic impact assessments about the proposed increases. These assessments showed that the levy would not have a significant impact on food production or agriculture in the region or in this state. The regional NRM levies are a way of sharing the cost of managing our natural resources, because a loss of NRM funding will most certainly have a negative regional impact and jeopardise the sustainable management of natural resources in the state.

Before I conclude, a number of issues were raised by my colleagues in this chamber, they being members of the Natural Resources Committee, to which I would like to respond. I was disappointed that the Hon. John Dawkins chose to denigrate a senior officer of the Adelaide and Mount Lofty Ranges NRM because he did not know his way around the Pinery fireground. I know the honourable member was very knowledgeable in terms of the area he came from, but it is my view that his comments were unbecoming, unnecessary and petty, particularly as both the Adelaide and Mount Lofty Ranges NRM and the Northern and Yorke NRM had kindly facilitated the NRC's visit to the Pinery fireground.

I was also surprised that the Hon. John Dawkins went down the path of making the issue an urban versus rural levy payers issue. The Adelaide and Mount Lofty Ranges region collects by far the greatest amount of NRM levies, due to the number of levy payers, and in some cases urban metropolitan contributors pay a substantially higher land-based levy, based on higher capital values, than many comparable country levy contributors. I am not sure if the honourable member is suggesting that urban levy contributions should be increased. If that is what he is advocating then let him be clear about it.

Now to some issues raised by the Hon. Robert Brokenshire: first, the issue of recovery of overhead costs incurred by NRMs. The overhead costs we are talking about are the likes of accommodation, electricity, vehicles, fuel, uniforms, computer communications and other on-costs. From my personal experience, on-costs can typically be in the level of 50 to 100 per cent. As an example, when the honourable member calls a tradesman out, a plumber or electrician, if he is lucky he might only have to pay about $100 call-out fee and then $100 per hour for the tradesman's services. I can assure you that that is far less than the tradesman (if he is an employee) earns an hour, so the charges in that case cover overheads and profit.

The honourable member talked about another issue, and I presume it was about the Western Mount Lofty Ranges Prescribed Water Resources Area. Yes, this financial year irrigators have had to pay a water levy because the area was prescribed in 2013. I am advised that the water users in the Barossa Prescribed Water Resources Area, the Northern Adelaide Plains Prescribed Water Resources Area and the McLaren Vale Prescribed Water Resources Area have paid water levies since before the NRM board was formed. These three prescribed areas previously, since the introduction of the NRM board, paid water levies of $5 per megalitre on allocated water and $5 per megalitre on used water.

What the honourable member failed to mention was that irrigators in the rest of the region had their water levies substantially reduced from $10 per megalitre to effectively $6 per megalitre. This was the result of equity being applied to all irrigators in the region. It should be noted that the $6 per megalitre rate has not been adjusted for the 2016-17 year. I am not sure if the honourable member has a pecuniary interest in this matter but I would have thought he would have mentioned it if he had.

Once again, I commend the NRM boards for the important work they do on behalf of our community and I have no doubt they will continue the good work.

The Hon. J.M.A. LENSINK (17:22): I will make a brief contribution on this motion given that I have spoken at length when introducing my bill just moments ago. The Natural Resources Committee has a very important role in the oversight of these levies. I would like to endorse the comments made on 8 June by our Liberal member on the committee, the Hon. John Dawkins, and also for those who are looking for the full package of speeches on these matters they might like to also read the contributions of a number of Liberal House of Assembly members on 8 June who spoke about levies for the 2016-17 financial year in their particular districts.

I acknowledge the role of the committee. I do not know if the previous speaker wrote the speech, or who wrote it for him, but I thought that it was unnecessarily narky and engaged in shooting the messenger. However, that aside, I am proud of the Liberal members for voting against the levy increases for the 2016-17 financial year. I do give credit to the Labor members of the committee for expressing concerns about the levy increases for the coming financial year.

The way that these increases have been done has, I think, really been contemptuous of water levy payers in South Australia. They are being lumped with a whole lot of Murray-Darling Basin costs which I think most South Australians would say are the responsibilities of the state. We were led to believe, through last year's estimates, that those Murray-Darling Basin costs would be paid for through general revenue and here we are, less than 12 months later, the irrigators staring down the barrel of being forced to pay for them by this very cynical government.

I have often said before that I see this as the straw that will break the camel's back as far as any confidence in the NRM system is concerned. Many people say that they do not know where their levies go. Under the previous system, weeds used to be managed, pests used to be managed, and the water catchment boards operated effectively and their soil boards operated effectively. Now, nobody knows where those costs go. The costs are, in a large quantum, actually being used to prop up the environment department's budget. Effectively it is a tax, and I think I have outlined that in relation to the bill that I have introduced today.

I would like to acknowledge the work of the boards and say that we do understand what has been shunted upon them by this government. I think it will be more difficult in the future to find people who are willing to serve on those boards. I think it is time that there be a complete rethink about this particular program, given that a lot of the programs that used to be funded are now no longer able to be funded. It is quite a broken system. The grand promises that were given when the system was established by this Labor government in 2004 have shown manifestly to be a complete and utter failure and this government has nobody else but themselves to blame for it.

Debate adjourned on motion of Hon. D.W. Ridgway.