Question Time

Natural Resources Management Levy

The Hon. D.W. RIDGWAY (Leader of the Opposition) (14:32): I seek leave to make a brief explanation before I ask the Minister for Water and Minister for Environment a question about the NRM levy.

Leave granted.

The Hon. D.W. RIDGWAY: Members will be well aware that there has been a lot of debate in this place and in the other place, and also in the media, about the outrageous increases to the NRM levies and that members of the public will be getting their levy notices shortly. The minister has cited the recovery of water planning and management costs and departmental corporate and services costs as reasons for the increase.

I just remind the minister of principle 3 of the National Water Initiative Pricing Principles, which was signed off by the state and commonwealth government ministers in 2004. It states:

Having identified water planning and management costs to be recovered from water users, in whole or in part, activities should be tested for cost effectiveness by an independent party and the findings of that cost effectiveness review are to be made public.

My question to the minister is: has an independent party reviewed or tested the cost effectiveness of increasing the amount of money recovered from water users for planning and management costs?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (14:33): I thank the honourable member for his most important question and for giving me the opportunity to put on the record again this government’s wonderful achievements—

The Hon. D.W. Ridgway: Answer the question.

The Hon. I.K. HUNTER: —in terms of natural resource management. I have an answer for the honourable member. If he would like to just wait he will hear it in good time.

The Hon. J.S.L. Dawkins: In about eight minutes?

The Hon. I.K. HUNTER: Well possibly. That depends on how many interjections there are, Mr President.

The Hon. D.W. Ridgway: I am trying to listen, for once.

Members interjecting:

The Hon. D.W. Ridgway: I do want to hear the answer.

Members interjecting:

The PRESIDENT: Order! Allow the minister to give an answer without any interjection.

The Hon. I.K. HUNTER: Thank you, Mr President, very kindly. Items defined as water planning and management costs are set out in the user pays principles under the National Water Initiative. The NWI is the national blueprint for water reform in Australia and represents a shared commitment by governments to increase the efficiency and sustainability of Australia’s water use. The initiative permits Australian governments to recover costs from users or beneficiaries of the water source, where practical. Recovering some of the costs involved with water planning and management is in line with the government’s commitment to user pays principles under the NWI.

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 financial burden. We have chosen not to implement an independent cost-effectiveness study because we have not moved to implement full cost recovery, and we have opened the books at the same time.

Representatives from Primary Producers SA have met with representatives from DEWNR on a number of occasions to go through these figures in greater detail. DEWNR has also produced a fact sheet that provides easily digestible indicative information about what it spends annually on WPM activity, and has also prepared information in relation to regional breakdowns of spend for the benefit of the PPSA and its members.

I am advised that an audit would be quite a significant cost, and any independent analysis would show that we have a very efficient system here in this state. Once again, those members opposite seek to confuse and misrepresent what the government has achieved on water management. Is the honourable member seriously suggesting that South Australia move to a full cost-recovery model? Is that what he is suggesting? I think that is what he is about to suggest, Mr President. You cannot have it both ways.

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

The Hon. I.K. HUNTER: You can't have it both ways. Is the member seriously suggesting—and I hope she isn't—we move to full cost-recovery models for water planning and management so then we can fund an independent report into how we fund water planning and management in South Australia? Is that seriously her plan? Is that all they've got? 'Bump up the cost and then do a review.' Bump up the cost. We have decided to do the opposite: we are only partially recovering—

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

The PRESIDENT: Order!

The Hon. I.K. HUNTER: —and opening up the books for those organisations—

Members interjecting:

The PRESIDENT: Can the minister sit down for a second? Please do not encourage the minister to stray away from the answer. Minister, go straight to the answer.

The Hon. I.K. HUNTER: Thank you, Mr President, although I would counter that I have not strayed one millimetre from the answer that the Hon. Mr Ridgway deserves. We are taking a sensible approach to introducing a contribution from beneficiaries to water planning and management costs. It is important to note that the states have all taken slightly different approaches to the issue of water-related cost recovery.

When all water-related charges are taken into account, the NRM water levy rates paid by irrigators in our major food and wine producing areas, such as the South-East and the South Australia Murray-Darling Basin, are still low when compared to our interstate competitors. I have used these figures before: the $6.30 per megalitre water levy rate proposed on the SA Murray-Darling Basin for 2016-17 is well below equivalent charges in New South Wales and Victoria. In the New South Wales Murray, the equivalent charge has been around $10.51 per megalitre, assuming a full use of entitlements. In the Victorian Murray, the lowest equivalent charge has been around $11.05 per megalitre. All of this is set out, I am advised, in the ACCC's most recent water monitoring report.

Similarly, the $2.58 per megalitre water levy rate proposed in the South-East for 2016-17 is less than half the rate of the most common New South Wales groundwater charges, as outlined on the relevant New South Wales government website. The state budget papers set out how the Department of Environment, Water and Natural Resources allocates its budget. The department has calculated the total cost of water planning and management at approximately $43 million.

It should be noted that this figure represents a point-in-time snapshot and the costs incurred across the water planning and management functions and the total cost will vary year on year. Recovery of these costs from those who benefit has been on the cards since 2011; in fact, it has been in the budget papers since 2011.

The announcement contained in the 2015-16 budget of our recovery of $3.5 million from NRM boards in 2015-16 and $6.8 million in 2016-17 and indexed thereafter represents a small fraction of the total investment in water resource planning and management. Seriously, what does the honourable member opposite really expect the outcome would be of an expensive and independent inquiry? A reduction in the amount to be recovered?

Members interjecting:

The Hon. I.K. HUNTER: A reduction? No; the inquiry will say, 'You are only recovering a partial amount and you should go to full recovery.' Is that what the honourable member wants? Let him say that, Mr President. Let him stand up and say to the communities he purports to represent in this state, 'We want you to go to full cost recovery,' and see how well he goes down in the regions. Probably as well as his leader did when he was out campaigning in the federal election.