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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-06-16 Daily Xml
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WATERWORKS (RATES) AMENDMENT BILL

Final Stages

Consideration in committee of the Legislative Council's amendment.

The Hon. K.A. MAYWALD: I move:

That the Legislative Council’s amendment be disagreed to.

The government put a case in this house that it was inappropriate to be setting prices six months out (or more) from the commencement of a new pricing term. The amendment that has been proposed by the upper house would see that the prices continue to be set in December each year—some six months before they come into effect.

The reason water prices currently must be gazetted by 7 December each year is that under the existing act customers have a consumption year that may commence as early as mid-December, the bill for which will be issued after 1 July in the following year when new prices may have come into effect.

The date of 7 December was inserted in 1991 when, as I understand it, there was some public concern about the then government's right to set a rate for water that had already been consumed. A key element of this bill is to remove the consumption year provisions so that customers only pay a financial year's price for water used in that financial year. Consequently, the need to gazette prices seven months before they come into effect will no longer exist.

In addition, it would be far preferable for any government to be able to set water prices as part of its normal budget process in May/June of each year. The date of 1 June still provides the community with a month's notice of new water prices; furthermore, 1 June is close to when new prices will apply, making the information more relevant and useful to customers.

The effect of the opposition's amendment will be to require prices to be fixed six months before they are to take effect. Such a long lead time would be inconsistent with other states which generally only provide around four weeks' prior notice.

I will provide for the house some recent examples. The Independent Pricing and Regulatory Tribunal (IPART) of New South Wales released its final determination on 16 June 2008 for Sydney water prices that applied from 1 July 2008 for four years to 30 June 2012. In respect of the 2008-09 prices, this represented approximately two weeks between announcement of the new water prices and their implementation.

In Western Australia, water prices applied by the water corporation in that state are set by the minister during the state budget process and announced at the state's official budget release. The 2009-10 WA budget was released on 14 May and included a 10 per cent increase in water prices for Perth to be implemented on 1 July.

The Essential Services Commission of Victoria is yet to hand down its final decision for Melbourne water prices; however, it did make a draft determination in April 2009, with written submissions and comments due on 19 May 2009. The actual date of release of the prices is yet to be publicly announced. This will leave less than four weeks in that state.

As to revenue to government, comments have been made by the opposition during debate on this bill that, by December of each year, the Treasurer and government would already have decided how much money they were intending to draw down from SA Water revenue. In fact, since 2003, the government has operated under a process for setting water prices which ensures that the prices are set consistent with national pricing principles. That process is documented for public scrutiny in the annual transparency statement and is open to independent review by the Essential Services Commission of South Australia. Quite simply, the government does not have the sort of flexibility in determining water prices that members opposite imply.

In summary, I reiterate that the purpose of this bill is to enable customers to have greater information and hence better control over their water use and its cost. By enabling quarterly water use billing, customers will receive more timely information about the amount of water they have used and its cost.

Members will be aware that water prices for 2009-10 include a reduction in the fixed annual water supply charge to enable customers to reduce their water bills by being more water wise. The more timely information provided by quarterly water use bills complements that measure. Quarterly water use billing will also aid family budgeting by smoothing out water charges over the year, subject to any seasonal pattern in customers' water use.

If this legislation fails, South Australian families will not get the information they need to take greater control of their water use and their water bills. I call on members opposite and those in the other place to support the bill.

Mr WILLIAMS: I am bitterly disappointed that it is the government's wont to continue its charade that this is about giving timely information to water consumers. I think the minister just said that if this bill fails the public of South Australia will not get the information about the new water rates. What a load of nonsense!

The opposition and the minor parties in the other place have set out to ensure that the community of South Australia has even more information about water prices. Indeed—and I make no apology for this—the opposition and the minor parties in the other place want the South Australian community to know exactly what the water prices will be post-July 2010 before they vote in March 2010.

This is a sneaky little manoeuvre by the government so that it can put off the announcement of what water prices will be for the 2010-11 year until after the March 2010 election. That is what this is all about. This is about the government being secretive, as it is every day.

The minister made the claim that this should be done as a part of the ordinary budget process. SA Water is listed under the public non-financial corporations section of the budget, and it is held somewhat at arm's length from the normal budgetary process in so much as when the Treasurer handed down the budget a fortnight ago he claimed that South Australia was facing a deficit of about $3.2 billion. He was able to make that claim only because the debt borne by SA Water and the other non-financial corporations owned by the South Australian government were outside of that figure; they were accounted separately. We know that the true debt position, if you include those corporations, is over $6 billion.

On the one hand, the minister is arguing here that this should be part of the normal budgetary process, yet the Treasurer very conveniently excludes it when he talks about the total state debt. When it suits him, the Treasurer does not want SA Water to be part of the normal budgetary process, yet the minister comes in here and tries to put the argument that it should be part of the normal budgetary process.

The minister also talked about what happens in other states. Let me assure the house not only that what happens in South Australia barely meets the national water initiative standards but it is very different to what happens in other states. In other states—and she mentioned IPART in New South Wales—there is a truly independent setting of water pricing. We do not have that here in South Australia.

The minister talked about ESCOSA and its role. The Essential Services Commission in South Australia gets to review the process after the fact, and does not get to be involved in setting water prices. It only has a function of reviewing the process after the fact—after the Treasurer has already put his grubby little hands into SA Water's profits. That is what happens in South Australia. That is one of the reasons the opposition and the minor parties in the other place want this government to be honest about water prices and to announce its intention before it goes to the people.

We have had enough of this government saying, 'Trust me.' It is a bit like the Treasurer saying, 'I want to take $750 million out of the budget, but I'm not going to tell you how I'm going to do it until after the next election.' In fact, it is exactly the same thing. We have a Treasurer who is desperate for cash. We know that, and we know that one of the big cash cows being used by the this Treasurer is SA Water. Over $2.2 billion has gone from SA Water to the Consolidated Account during the term of this government. That would more than build a 100 gigalitre desal plant; there would be money left over. This is simply about the Treasurer wanting to keep secret his intent from the people of South Australia until after the election.

The opposition supports the amendment moved in the upper house. I can assure members that it is my strong suspicion that the other place will insist on this amendment, because it is a very good one that the government should have accepted. The government is being very silly here, and everyone in the community can see what is going on. Everyone in the community knows that the Treasurer is desperate for cash and knows what he will do if he happens to be re-elected and he has not had to say how much money he is going to extract from SA Water consumers until after that election. This is a very sound amendment made in the other place, and the opposition supports it.

Motion carried.

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