Planning, Development and Infrastructure (Gas Infrastructure) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 18 May 2022.)

The Hon. R.P. WORTLEY (22:04): The state Labor government does not seek to stop people using gas. Rather, the aim is to provide the market with more options and give consumers choice. The implications of banning an existing choice are not currently clear, particularly the effects on customers, existing developments and the future availability of appliance options in new housing developments. It is important to understand all these implications include affordability for low-income households, particularly with the current rising cost of living.

In South Australia, many residents have chosen to use gas in their homes, for purposes such as cooking and water heating. The Malinauskas Labor government does not seek to stop people using gas. Rather, the aim is to provide the market with more options and give consumers choice and discretion over their energy usage.

There are risks in a policy position which aims to phase out the existing choice of households being able to connect to gas. There would be effects on legacy customers, existing housing developments and the future availability of appliances. It is important to understand all these implications, including affordability for low-income households. There would be a risk of increased electricity prices, because if households all used electrical heating in winter, and not gas, there would be an increase in the price of evening peak demand and therefore wholesale prices. The peaks are the principal driver of high average wholesale prices, which retailers ultimately pass through to customers.

The South Australian government is currently pursuing decarbonisation of the gas network through its hydrogen policies. For example, the Australian Gas Infrastructure Group's Hydrogen Park South Australia in the Tonsley Innovation District is delivering a pioneering 10 per cent blend of renewable hydrogen with natural gas to power nearly 4,000 South Australian homes and businesses across Mitchell Park, Clovelly Park and parts of Marion.

More broadly, South Australia continues to be a world leader in energy transition and is building on our already strong foundation of world-leading achievements in this space. We have now achieved 75 per cent renewable electricity generation by making use of our abundant wind and solar resources. We have the world's eye upon us as we lead the transition. We are now embarking on new challenges like decarbonising our heavy industries. Low carbon energy is not just a utility; it is an enabler. It can be the bedrock for premium green products, for jobs, for exports and for regional development.

Recently, the Premier spoke at the Australian's Energy Nation Forum. He spoke about South Australia's abundance of natural gas, its role in our economy and our decarbonisation aspirations, and made our position clear on the national platform. While South Australia has the highest rate of renewable energy, our ability to lead the energy transition is underpinned by the capacity of gas to firm the grid. Without gas, we do not get to 100 per cent net renewables. This is why our government is deliberately embarking on our FERM mechanism to support and retain gas to firm our renewable energy resources. Beyond electricity and electrification, gas is also essential to the decarbonisation of other areas of production.

The Hon. J.M.A. LENSINK (22:08): I understand this bill was first introduced as a private members' bill in 2018 by the Hon. Mr Simms' predecessor, the Hon. Mark Parnell, and that this bill is identical except for the different operative date, which is currently out of date. Be that as it may. As I have said previously tonight, we do like to be consistent in the Liberal Party. We opposed the bill then, and that is not necessarily why we oppose it now, but because it should be opposed for good reason.

The effect of the bill is to void any contractual arrangement requiring that a property be connected to gas, with the effect date being 1 January 2023. Mr Simms argues that, while we do not have mandated gas connection in South Australia, the decision around whether a new property is connected to gas or electricity is made by the developer, not the individual consumer, which he states locks home owners into higher prices through gas. Some developers do have private encumbrance matters that they seek to enforce through the sale contract to defray costs, and the bill seeks to void those contractual arrangements.

I understand the sentiment of the bill to try to prevent purchasers from being locked into particular energy sources or paying for a source they do not choose to use. This is another example of the Greens trying to use the planning system as a blunt instrument for other policy purposes.

The ACTING PRESIDENT (The Hon. R.B. Martin): Apologies, the Hon. Ms Lensink, it has been brought to my attention that this bill was first introduced in May 2022 and you, in fact, have already spoken on this bill, I believe.

The Hon. J.M.A. Lensink: Oh, have I now, my goodness me!

The ACTING PRESIDENT (The Hon. R.B. Martin): We appreciate your contribution, but you no longer need to give a second one.

The Hon. R.A. SIMMS (22:11): I was hoping the Hon. Mr Hood would speak in favour, given his support for other crossbench motions. I might break the curse of the Hon. Michelle Lensink damning my bills to failure. At least the Liberal Party has been consistent in its opposition to this bill; the same cannot be said for the Labor government.

This bill has had several lives: it was introduced first by my colleague the Hon. Mark Parnell in 2018. It was reintroduced by myself in the old parliament. I took carriage of the bill and I did bring it to a vote in the previous parliament in the final days of the Marshall government. It is my recollection that the then Labor opposition supported the bill and indicated that it was something they were very interested in moving on, were they to return to government.

Of course it does not, as the Hon. Russell Wortley implied, ban gas connections—that is not what the bill does. The bill gives the purchaser of a property choice around whether or not they be connected to gas. That was a proposition that the Hon. Tom Koutsantonis in the other place was very attracted to, and a number of members in this chamber were attracted to at the time. They said, 'Oh, yes, we'll support it. When we're in government we'll have a look at it.'

I have waited for four years for the Labor Party to take this up. Having had their road to Damascus moment in 2021, it was my hope, once they found themselves in government, that this bill would find its way through to the top of the list. I believe the Hon. Tammy Franks even suggested a parliamentary inquiry as a mechanism to try to give the government an opportunity to look at the bill.

Well, here we are, in the dying days of this term and no action has been taken, so I have no choice but to bring the bill to a vote, and I suspect it will die tonight. Once again, the Labor Party has backflipped on this issue. It is a key issue in the Adelaide Hills, a key issue in that community. A lot of people there are concerned about being forced into taking on gas connections against their will. I will be sure to remind them of the Labor Party's about face when I am out doorknocking in the area.

The council divided on the second reading:

Ayes 2

Noes 17

Majority 15

AYES

NOES

Second reading thus negatived.