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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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WATER INDUSTRY BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr WILLIAMS (MacKillop—Deputy Leader of the Opposition) (15:48): Before we broke for lunch I was well into my second reading contribution on this matter, as the lead speaker on behalf of the opposition. I was setting the context in which we are debating this particular matter, and I think I was at the stage of talking about the reality that South Australian water customers are, I think, going to penalised greatly for a decision to double the size of the desalination plant—a decision that was a political one and not an essential decision to supply water. I was making the point that—notwithstanding that the government has been out there selling, as one of the main so-called reforms of this piece of legislation, that we will have an independent pricing structure—the pricing regime will largely be driven by the pricing audit issued by Treasury.

I am making the point that there is really no charge. Currently, Treasury assess the price of water in South Australia, and with the bill that is before us Treasury will continue to instruct ESCOSA on how it will set the price for water in South Australia. So I am arguing there will be no change, and it looks like, certainly under the policy which is implied in this piece of legislation, the government intends to continue to use SA Water as a cash cow.

Only in yesterday's Auditor-General's Report it was revealed that the ratio of borrowings to the assets held by SA Water have now reached the upper limit of 25 per cent. SA Water has been forced by this government to borrow up to a value of 25 per cent of its total asset holding. It has been forced to borrow that money in order to pay to Treasury the tax equivalent and, in particular, the dividends which are demanded by Treasury in order to keep the budget afloat. It is really important for the parliament to understand what is going on here.

The setting of the price of water seems to be driven wholly and solely by the need to have a significant difference between what it actually costs to provide the water and how much revenue comes into SA Water, because the Treasurer needs to cream off a large amount of money. I may well come back to that—the principle of pricing—and how Treasury under this government has year in and year out set the price of water and claimed a return on capital which was never provided. In fact, will go to it right now.

One of the principles—and I think it is a fair and reasonable principle—is that the government should get a return on taxpayers' funds that have been invested into building the infrastructure, which is now owned by SA Water. I do not think anybody has a serious argument against that. It is how we determine what those assets are and what is counted as those assets, ostensibly paid for by the taxpayer.

When there is a development happening and somebody does a subdivision, part of the obligation on the party subdividing the piece of land is to put in services. Those services include water and sewage services. Generally, that cost is borne by the developer of the land. It is obviously charged to the people who buy the housing blocks in that land, or commercial land if it is a commercial development. It is a user pays system, where those services are paid for by the developer; but, then the assets—the underground pipework generally is what most of the asset is—are handed over to SA Water, and SA Water puts the value of those assets on its asset register.

Prior to 1995 there was no record of what is known as contributed assets. So, prior to 1995 all of the assets, which are now held by SA Water on its register, which were not paid for by the taxpayer but contributed assets and assets paid for by developers and owners of land, are added onto the SA Water register.

So, I think it can be reasonably and fairly argued, and has indeed been, in the reviews of the transparency statements, which are published by the Treasurer each year, that this amount of asset value is incorporated into the total asset value when Treasury works out what the price of water is going to be to deliver a certain return on asset.

Treasury is not only getting a return on the assets which have been paid for by the taxpayer—and I think it is fair and reasonable that they get a return on that—but Treasury also gets a return on the value of assets which are termed contributory assets: those assets which are paid for by developers prior to 1995. To be quite honest, I have no idea what the value of those assets might be, and seeing the documentation that I have read over the years I do not think that it has been identified. But I can imagine it could be substantial.

There is another issue that confronts us on a regular basis—whilst I am talking about the valuation of assets, because I think this is important and it has an impact on water prices, and that is why I want to talk about it. I will find the piece that I was reading yesterday from the Auditor General's Report.

The other thing that happens with the asset value, which the Treasury claims to demand a fair rate of return on, is that we get a revaluation on a fairly regular basis. I think it is arguable that Treasury makes some windfall profits here—and, again, it is not dissimilar to what happens in the private sector and in other industries—but we have seen some pretty hefty revaluations over the years in SA Water.

In fact, on the bottom of page 1345, Volume 4, Part B of the Auditor-General's Report, he talks about income, and I will be asking some questions on this particular matter when we get the opportunity. He says that other comprehensive income of $598 million (then in brackets it has $820 million, which I believe is the figure from last year's Auditor-General's Report) is attributed mainly to the revaluation of assets.

The question that I need to ask the Auditor-General is what is the relationship between that number, $598 million, and the revaluation? I am not sure if it would be counted as income if the valuation rose by that much, but it suggests to me that there was a substantial increase in the valuation of the assets.

The asset that SA Water is holding is $13.2 billion. That is a substantial amount of asset, and the Treasury demands to get a rate of return on that $13.2 billion. So, if that $13.2 billion is inflated either through revaluation or by containing substantial property or assets which were not paid for by the taxpayer, I think it is grossly unfair that that contributes to the price increase of water which is paid for by water customers across South Australia, and we have seen substantial price increases. These are important issues for householders, and I asked the minister a question in question time today whether he could confirm that, after the price increases envisaged for next year under this current government and in a period of about 10 years, water prices will have trebled in South Australia.

The Hon. P. Caica: Got that question from the Sunday Mail, did you?

Mr WILLIAMS: No, not at all. Why is that?

The Hon. P. Caica interjecting:

Mr WILLIAMS: I don't think so, Paul. I think it works the other way a little bit, as you are well aware.

The Hon. P. Caica: Emailed them, have you?

Mr WILLIAMS: Yes. That was a bit silly.

The DEPUTY SPEAKER: Hey, guys, first of all—

Mr WILLIAMS: Yes, it is not fair on Hansard or the rest of house.

The DEPUTY SPEAKER: It is not, absolutely. All interjections are disorderly, responding to interjections is disorderly, calling each other 'Paul' and 'mate', sadly, is disorderly, so let us carry on.

The Hon. P. Caica: Sorry.

The DEPUTY SPEAKER: That's alright; I don't take it personally.

Mr WILLIAMS: Thank you, Madam Deputy Speaker. I was referring to the minister's inability or failure to answer the question that I put to him in the house today. The reality is that we will have seen water prices paid by householders trebled under the term of this government in 10 years—substantially more than the inflation rate.

The government says, 'Oh, but we're building all these assets.' I have talked extensively about one of them and that is the desal plant, and I have been arguing that it was a political decision. Over $1 billion of the new assets that the government claims that it needs to pay for, I am arguing, was built for political reasons, not because of the necessity to provide water.

We have this pricing mechanism built into the existing regime where the asset base of SA Water is used to establish the price. The reality is that, in a proper world with a competitive market operating, that might be fair and reasonable because we could assume that the market would drive those sorts of decisions. I do not for the life of me expect that, under a market-driven scenario, we would have had the building of a 100 gigalitre a year capacity desalination plant in South Australia because the market would have seen that as nonsensical.

The market would have seen that there was no real reason for expending that amount of money, and that is determined by the market because the market would have determined that they would never have got a return. The pricing mechanisms used in SA Water are not going to change and they are not going to change under this bill. We are not going to have independent pricing because the Treasurer will still have his fingers firmly in SA Water's wallet, taking out money as fast as he can, and that will be picked up by water consumers, by and large householders.

I have talked at length about that particular issue, but there are a number of other issues. I have talked about the reality that South Australia has a lack of water management, and I do not believe that is going to be addressed by this bill. One of the things about the bill is that it obliges the minister to go through a water planning regime. I think that, on a five-yearly basis, the minister will be obliged to do a water plan which will be reported on every 12 months and which will be regularly updated.

I do not per se have a problem with that. In some way I question the need to have that enshrined in the legislation. The minister, I think, talked in his second reading speech about active management. Active management, as I understand it, is being aware of the environment that you are working in, being aware of the world as it is changing (as it invariably does on a regular basis) and modifying your decisions in accordance with those changes. I am not too sure that the regimented type of planning process that is envisaged in this piece of legislation actually will improve that situation.

However, certainly, I have argued earlier in my contribution that, indeed, we have had a lack of good decision making, and this may help in that regard. What I do fear is that the government will point to the legislative changes and automatically make the connection and say, 'We have made these legislative changes, we have reformed the legislation, and therefore the system will work better.' It does not work like that: you actually have to make the changes on the ground. Certainly, they have to be within the legislation, but I do not see that these legislative changes give any more ability for the government to get its processes or determinations right: it just sets up another bureaucratic regime which may or may not work.

If you have got the wrong inputs, you will get the wrong outputs, as you do in any system. It seems that we have been using the wrong inputs when making water policy in this state for some time now, because we have got so many things wrong and, whether or not we set up a formal planning regime, I do not think will make any improvements: there are other things that need to be done to improve it.

So I have some concerns that this will, indeed, be an excuse for business as usual rather than there being a real change to the way we go about making water policy. In particular, I recall I was talking earlier about the fact that the integration of the whole of the area of water policy here in South Australia might be a good stepping off point, and I alluded particularly to stormwater; but there are other bits and pieces to, I guess, the availability of water in this state which need to be taken into account as well.

I will come back to stormwater now because it is one area in which I think policy in South Australia has failed miserably in recent years when great opportunities presented themselves—that is, to take some of that stormwater that I was talking about earlier in the day and recycling it and putting it to great use. I indicated that there is almost as much water running off the streets and roofs of metropolitan Adelaide in a normal year as what we use, so there is great potential.

We on this side of the house developed a policy that we took to the last election that we would use, from memory, I think it was, a third, or getting towards half, of that water over an extended period of time through re-use schemes—schemes which are not dissimilar to ones which are already working but replicated across the metropolitan area to give us vast volumes of captured water, to clean up that water to a significant extent and then store it in aquifers. One hundred to 200 metres below the surface underlying Adelaide there are substantial aquifers available to do this. There have been plenty of reports written, and we can store that water and, when we need it, we can recover it and give it what in the industry is known as a final polish to bring it up to potable standard and use it.

There are huge opportunities in metropolitan Adelaide to use technology which is proven, notwithstanding the government's arguments that the science is still out on the ability to bring this to drinking standard. That is an absolute nonsense, and anybody who has read the technical information knows that that is a nonsense. Even if you are unconvinced by that—I will not even go there, because I cannot imagine that anybody who did serious work on the work that has already been done, particularly organisations like the CSIRO, would be anything but convinced of the technologies there. The time has come for the recovery of stormwater and the use of that for potable supply.

Again, like the decision on the desal plant that I talked about earlier, when the opposition came out with this great idea to utilise this great water source, the government decided for no other than political reasons that it would object to it, that it would undermine—attempt to undermine even the science behind it—this idea because the opposition had thought of it.

Again, South Australia is much worse off today than it would have been if the government had accepted that other people (people other than itself) could come up with great ideas from time to time, because it is a great idea. It does open up a huge water resource. However, through that intransigence, to put it nicely—bloody mindedness to put it truthfully—we now have the situation where the people who are developing those stormwater recovery and reuse schemes have been forced to develop schemes to use that water for no other than irrigation purposes.

It could be argued that that is a reasonable thing to do with that water. It mitigates any risk whatsoever. It cuts out some of the cost of going through the final policy and process, so it saves money and eliminates risk. What it does is it forces another large cost on the community because, to utilise that water, you have to replumb Adelaide.

About two years ago (I think it was in September 2009) one of the previous ministers admitted that to dual pipe Adelaide to provide for a non-potable water delivery system throughout metropolitan Adelaide would come at a cost of about $6 million at least. That is a huge cost and one that the state simply cannot afford.

Notwithstanding that, the government has put us into a policy position where those who are capturing stormwater, putting it through the processes I have described and then reusing it are forced to put in at least a limited distribution system to use that water and, because that system is limited, it limits greatly the amount of water that can be captured and reused.

I might talk about the publication known as Water for Goodat more length in a little while, but one of the things which I have found useful about that publication is that it brings together a lot of information, information which has by and large been spread throughout other publications and sources. One of the things that really fascinates me about it, which flies in the face of the government's argument about reusing stormwater, is that it tells us that the quantity of water used in metropolitan Adelaide to water all of our public spaces, all of our public gardens and all of our public sporting fields and arenas is about 15 gigalitres per year.

The government has a policy that by the end of 2013 there will be 13 gigalitres of recycled stormwater used across metropolitan Adelaide. Bearing in mind that the Glenelg to Adelaide parklands treated waste water pipeline has a capacity of, I think, 2.8 gigalitres and will supply water to the parklands and a number of other sporting and playing fields close to the Parklands around the city, we can assume that there should be potential for at least a couple of those 15 gigalitres to be replaced by water there.

We have capacity for about another 13 gigalitres across metropolitan Adelaide, which is the government's target by 2013. To achieve that, it seems to me that you have to build a second delivery pipe system to every public park and public playing field across greater metropolitan Adelaide. I am just putting together some information that is in Water for Good. To me, the cost of doing that would be substantial. I suspect it will be much more than that final policy and then putting that fit-for-purpose, fit-for-human consumption potable water into the existing pipe network.

The moment you have a policy and achieve that end, there is no limit to the volume of water that you can put through those systems and utilise. At the moment, the upper limit that we can reach, I would argue, is probably about 13 gigalitres, although the government says that they are going to get to 20 gigalitres and then they are going to get to 40 gigalitres. The reality is that nothing can stop you from capturing that water and there is nothing stopping you from storing that water in the aquifers. There is no ability to use it.

We have a substantial amount of money, mainly commonwealth money and local government money. Whilst they have been out there beating their chest as they do regularly and claim credit for other people's hard work and other people's expenditure, the state government has put only small amounts of money into these stormwater recycling schemes. We have seen a substantial amount of money invested, but the reality is—and I am sure I am on pretty solid ground here—that even the Salisbury council has been at the cutting edge of these schemes. They got there because they had two things facing them: they had a stormwater problem and they had the biggest single water user in metropolitan Adelaide in the council. They put those two issues together and came up with the solution of harvesting stormwater and selling it to the Michell's scouring plant.

It is my understanding that even today the Salisbury city council has the ability to capture, treat and store much more water than it can actually utilise, and that just highlights the problem that the policy failure has delivered to us in this area. Again, the bill before us does absolutely nothing to address this issue. In fact, the bill before us, in my opinion, will mitigate strongly against getting that policy of making proper use out of that asset, and that is stormwater which we currently run to the sea. It mitigates against us making good use of that water. It does that because the bill before us does not appear to distinguish between potable and non-potable water. I will come back to that when I get to talk more directly to the clauses in the bill. The minister in his second reading explanation made this comment:

This is an industry in which increasing numbers of players will have the opportunity to drive more efficient and innovative service delivery for the long-term benefit of South Australian consumers.

This gets to the very point that I am making. We do have opportunities in South Australia to achieve that very end, but I do not think this bill helps at all. There is no policy setting in South Australia at this stage to give an incentive for people to come up with novel ideas and to put those novel ideas into practice. This bill, in its current form, does not address that.

One thing I will say about the bill is that it has been out for a fair while. I think it was late last year that the consultation draft went out and submissions were called for. I will read from some of the submissions in a little while, but there have been some objections to the way the consultation was undertaken.

I can say the bill has been out there for a fair while, but I am not too sure that the government took much notice of the submissions that were made. There were 36 submissions made. The minister has claimed in his speech that he sought further consultation. He, in fact, says, 'This allowed for further consultation with experts such as Professor Mike Young and Chief Scientist Don Bursill.' I must admit that I did not see a submission from Mike Young. I am not sure what consultation was carried out with Professor Mike Young—somebody whom I have a great deal of respect for—but I have not seen his amongst the 36 submissions that are on the website.

One of the things that, I think, is very regularly commented on in the submissions that have been made is the call for third-party access. The bill basically puts third-party access right back on the backburner. When I say it puts it there, under this government it has always been there. The minister actually claims that we have brought it a bit closer to the front. The reality is that everybody in the water industry believes that, if you want to drive innovation, if you want to drive novel ideas, if you want to drive a lowering of cost to consumers, third-party access is one of those things that will help you drive all of that.

The minister claims that the bill will make a difference and get us moving. The reality is that the bill does not do that in any meaningful way. It sets up a regime where the minister, under the bill, has a period of time—I think, one month after the enactment of the bill—to put a report in and then that will start a process. I suspect that real third-party access is still some time off under this government.

Talking to people in the industry and citing the case in New South Wales, which has ostensibly had third-party access for some considerable time, I am told that, even though the legislation in New South Wales does provide for third-party access, in practice it is not possible.

The Hon. P. Caica interjecting:

Mr WILLIAMS: No, we don't. The minister says, 'We don't want that.' I certainly do not believe we do want that. Indeed, we want real third-party access. Not only is the time due for third-party access, it is overdue and well overdue.

I particularly cite the case on the West Coast where the former member for Flinders, Liz Penfold, argued for years that, if private enterprise could get access to SA Water's delivery pipes, there would be at least one desalination plant—a private enterprise paid for and run desalination plant on the West Coast, probably near Ceduna, providing high quality water into communities where, not only do we have very poor quality water, the quantity of water available has been quite questionable over the years as well.

In fact, we have had one place—Streaky Bay, I think—where there have been, for a long time, significant restrictions on development. That is more about the pipes, but there are also limitations on the amount of water that is available over there. If we had got on with this policy of third-party access we could have had a regime operating some time ago, and we could have seen how it would work on the West Coast. It is an area of the state where the time has come and gone, and the provision of high quality, reliable water for those communities should have already happened.

I have covered this to some significant extent, but the minister goes on to talk about the independent economic regulator. I have already covered that; there is not much independence when the independent regulator (which, in this case, is ESCOSA) will be forced to do just what the pricing order coming from Treasury has determined has determined that it will do. Notwithstanding, as the minister says, that 'ESCOSA will be empowered to make the final price determination on retail prices for water and sewerage services', it will be absolutely constrained by the pricing order.

Interestingly, I asked the department officers about the fact the act under which the Essential Service Commission is established provides that the Essential Services Commission must work with certain parameters, and one of those parameters is to set prices which reflect the lowest cost and efficient delivery of service. That is completely at odds as to the way we currently set sewerage rates in South Australia.

There is no connection between the rates at which households and businesses pay for sewerage services in South Australia, and the service that is delivered. The price they pay is directly related to the value of their property; it is as simple as that. For the life of me, I fail to understand how ESCOSA is going to meets its obligations under its act at the same time as try to deliver something under this act.

The advice I received from the departmental officers when I put this oddity—at least in my mind—to them was that no, in the first instance, they will work within the pricing order and will then have ESCOSA undertake a full review into water and sewerage pricing in South Australia. There is nothing in the act about that.

I would have thought that, before the minister brought this bill to the house, he might have come to some determinations about that, and may have even had ESCOSA (if ESCOSA is the body to do so) or his own department to do some work on that particular matter before we got to where we are now. We are debating a supposedly independent pricing regime, when we clearly know that it is not an independent pricing regime, which makes it a bit difficult.

One of the other things that the bill will do is—and I love this idea—take away the technical regulation from South Australia water. I have long thought that there is a huge conflict when SA Water is the technical regulator of the plumbing industry. I think the plumbing industry is delighted to see that that will be taken away from them. I have some concerns as to whether establishing a new technical regulator is the best way to go.

The question that has been put to me is: why are we reinventing the wheel in South Australia by setting up a new technical regulator regime, when most of the codes of practice are already well written, and the Water Industry Association sponsors a full sweep of codes of practice? Maybe we should be looking much further forward and asking, 'Why don't we get on board with the other jurisdictions across Australia and establish an organisation such as the Water Industry Association to provide all of the—not necessarily enforcement, but certainly the codes of practice and the technical standards that required in the water industry?' It seems that no, we are not going to do that; we are going to reinvent the wheel here in South Australia and set up another bureaucracy to manage that.

The minister talked about water industry entities being able to participate in an ombudsman scheme, and the opposition supports that. We just hope that the existing energy ombudsman—whom it appears will take on the role—is properly resourced to take on this additional role. As a local member, I know that I have myself used the offices of the energy ombudsman to sort out problems for a number of my constituents over the years, and my experience has been that the energy ombudsman has been a very efficient and effective way of solving problems which otherwise seem unsolvable. I presume the same would happen with the water industry.

I was also pleased to hear, in the minister's contribution, that, under the licensing conditions, the bill provides concession schemes—probably not dissimilar to what we already have—to be approved and funded by the minister, and an exemption scheme, again to be approved and funded by the minister. I am pleased to see that; I had some fear that the minister may take a leaf out of his colleague the former minister for energy's book on the feed-in tariff scheme that we now find in the electricity industry, where we have a cross-subsidy. We have a scheme that is funded directly by other consumers, and we have seen the ridiculous outcome that we have achieved through that.

In his second reading speech the minister also talked about protection for low income earners and regional consumers. I presume the intent is to do this by regulation; I do not see anything in the bill that would protect low-income earners and regional consumers. I put on the record here and now that I do not like leaving these things to regulation; it leaves it to be at the behest of the government or the minister of the day. When we are putting legislation through this house and are contemplating these sorts of things, I think it should be in the legislation, but I will come back to that shortly. The minister concluded by talking about the review of the pricing structures for water and sewerage, and I have already covered that area.

So although I think that the sentiments the minister put in his second reading speech sound good, I am somewhat concerned about the ability of this piece of legislation to deliver that, and I am somewhat concerned that, notwithstanding that we will see a new piece of legislation, we will not see much significant change.

I want to read into the Hansard comments made by some people who did put submissions into the consultative draft, and I think this is a little bit telling. One submission, from the Provincial Cities Association of South Australia, said:

The Association has made a submission to the Department…in relation to the proposed legislation and a copy of the submission is attached for your information and attention. Based on the lack of information and responses received by the association over the past two to three years from the minister, the Hon. Karlene Maywald, Water for Good organisation and SA Water, the association has little faith in the Department of Water and the government, considering our concerns, particularly as they relate to 'infrastructure definition' and 'regional demand and supply statements.'

That is the regional cities association, which consists of Mount Gambier, Murray Bridge, Port Pirie, Port Augusta, Whyalla and Port Lincoln local councils. This letter is a bit dated now—it is dated April this year—but they raise some serious concerns about the lack of two-way consultation. They raise—and this has been raised generally with me by local government—very seriously the need to license councils who are operating common effluent drainage schemes. I think these days they are called council waste water management schemes. The Local Government Association has raised a similar issue with me. They have some concerns over easements. They state:

Many of the common effluent disposal schemes which were installed in the 1960s to early 1990s were undertaken under the auspice of the state Department of Health, without formal property easements being reached on Certificates of Title.

The association requests that the proposed Water Industry Bill include reference for the operation of these schemes have access to the properties involved at all times to address any problems associated with the operation of the scheme...

It goes on. They have raised that very issue. The same issue has been raised by the Local Government Association. They have raised a number of issues—community waste water management schemes. They state:

Most townships in regional South Australia are provided with waste water services by local government through various forms of CWMS—

that is council waste water management scheme—

It is submitted that councils did not 'choose' to become involved in the provision of wastewater services as historically this was the role of the South Australian Engineering and Water Supply Department...and subsequently SA Water under the Sewage Act 1929. In particular, section 18 of that act provided for any area of the state to be proclaimed as a 'drainage area' which empowered E&WS/SA Water to construct, manage and rate traditional deep drainage sewerage systems. In practice, however, the proclamation of 'drainage areas' was historically limited to the Adelaide metropolitan area and major provincial cities.

So, the Local Government Association are arguing that councils have been left with this significant role. It goes on to say:

It is understood that the original policy concern of the state government was based around public health considerations due to failing septic tanks and/or unfavourable drainage conditions. The Local Government Act 1934 was amended to provide councils with the necessary powers to construct and charge for these schemes.

Now they are saying that the 39 councils manage more than 170 separate CWMS schemes across the state. They go on to say:

...the provision of CWMS was a public service provided by a council when the state government's water utility was unwilling to do so, presumably on the basis of scale and economic considerations.

Their submission goes on to talk about the charges for these services. It states:

...councils are forbidden from charging fees greater than the whole of life cost for providing the service, so it is submitted that CWMS 'prices' (or at least maximum 'prices') are already subject to regulation.

They go on to make the argument that they do not think that it would be fair and reasonable for those councils' CWMS schemes to be caught up in this legislation, the regulations for licensing and regulatory aspects of this legislation. They then go on to talk about stormwater management schemes, and I have already talked a little bit about that, but they cite a number of metropolitan councils, as follows:

It should be noted that the State Government's water security plan, 'Water for Good', sets ambitious targets for the harvesting and recycling of stormwater in the Greater Adelaide and regional areas. The vast majority of stormwater harvesting is undertaken by Councils and it would be perverse policy outcome if Councils were confronted with a regulatory regime which created disincentives for harvesting, recycling and sale of stormwater resources.

I think that parallels what I was saying about stormwater policy settings that we have seen in South Australia in recent years. It goes on under the heading of 'Other Water Services':

The vast majority of SA councils are not involved in the provision of potable water supply but there are some exceptions including the District Council of Coober Pedy and Roxby Downs Municipal Council that manage 'town water' and sewage supplies. The District Council of Ceduna also on-sells potable water to small communities west of Ceduna.

It says that it is suggested that these be considered as 'special cases' on their merits.

Other councils are involved in what might be best described as 'supplementary supply' of potable water for isolated communities where the normal SA Water potable supply service is not adequate or not available. These small scale schemes are developed in response to community need and it is submitted that they be exempt under the Bill.

Their submission also talks about managing water infrastructure and they state, after setting out their case, that councils had sought to obtain legal clarification of councils powers, stating:

The provisions of Part 5 of the Bill present the opportunity for this anomaly to be corrected without the potential difficulties of introducing a piece of 'special purpose' legislation.

There are some aspects of the bill, part 5 in particular, that would aid their work in providing CWMS, stormwater and, in some cases, potable water supply in some limited councils. They also raise the issue of technical regulation, as follows:

In regional areas, Council Environmental Health Officers (EHOs) are currently delegated to inspect and approve on-site wastewater systems under the Public and Environmental Health (Waste Control) Regulations 2010. Concern has been expressed that multiple approvals may be required under the Bill and the health regulations and/or removal of the delegation (of these officers) which would reduce the viability of these specialist positions in regional Councils.

The Local Government Association has raised a number of issues about the bill and how it might impact on its member councils because they are significant players in the provision of water services.

For the information of the house, I have a table which lists council wastewater schemes (I am not sure if it is all of them) and I can say that some of the schemes are quite substantial. For instance, the Mount Barker/Littlehampton scheme has over 4,000 connections, and then we get down to much smaller schemes such as Seven Mile shacks which has 11 connections. There is a whole range from many thousands of connections in sizeable country communities down to very small schemes where there is only a handful. There are plenty that have less than 100 and there a quite a few that have less than 50 connections. Of those small ones, a lot of them are in tourist areas, and quite a significant number of them are not necessarily in tourist areas but in areas where people live permanently, but only in very small communities.

The Local Government Association is making the point that it believes that, by and large, the regulatory framework as envisaged by this piece of legislation would be quite overpowering on councils, particularly on smaller councils.

It is an interesting submission from the South Australian branch of the Australian Industry Group, which is one of the submissions which really push the idea of third party access. I quote:

The Australian Industry Group supports the provision of water moving away from the current monopoly situation with third party suppliers being envisaged in the structure of the bill. We do, however, believe that the implementation of a third party access regime could be more definitely articulated.

That is exactly what I was saying a few minutes ago. It goes on:

For us it follows that the provision of a staple necessity, such as potable and other (high quality) water supply should be transparently and independently regulated and that the Essential Services Commission of South Australia is the appropriate body to assume that role and provide the price setting regulatory and licensing capability for the water sector into the future, and it seems appropriate that participants in this critical market be subject to rigorous licensing and regulatory regimes.

I read that particular quote out because one of the things that has certainly come to my attention as I have been talking to people in the industry about this piece of legislation is that it seems odd that we would apply the same regulatory regime—which, I think, most people agree is appropriate, as the Australian Industry Group says—to a critical market, that is, the supply of potable water.

Most people I have spoken to seem to think it odd that you would apply the same licensing and regulatory regime to non-potable water. I fully appreciate and understand that the bill specifically exempts irrigation trusts on the River Murray—and I think some irrigation schemes off the River Murray, and there are a number of those, obviously, in South Australia where water is supplied by pipeline to a number of users, and I understand that they will be exempt.

It seems to me odd that, for instance, organisations such as the Salisbury council would find itself bound up by the licensing and regulatory regime as envisaged under this act. Again, I appreciate that the act contemplates that the minister may, via regulation, provide exemptions. We have no information as to what is envisaged in that area.

I have great sympathy for non-potable water supplies being not part of this regime at all. I have had a range of amendments to the bill drafted, and one of them more than touches on that. One certainly addresses that, and, again, I will come to that shortly.

I have another specific submission here from the group of councils that are particularly interested in stormwater harvesting, recycling and reuse. I think that one of the key points made in this submission is that:

The councils submit that they should be entitled to the rights and powers of water entities in relation to all of their water infrastructure, but, to the extent that their infrastructure is not related to a retail activity, they should not be obliged to comply with licence conditions or the technical regulations.

Those councils that are firmly in that space question also why you would put the heavy hand of regulation over what is, indeed, a non-essential service. This is an interesting one. The SA Water Customer Council submission states:

At this stage some SA Water Customer Council members do not have confidence in the autonomy of ESCOSA to set prices. The council understands the regulator is required to consider government policy when setting prices. However, we have been advised that the regulator may deem that customers should not pay for government policy and require a community service obligation be made by the government.

It goes on:

The council would like clarified who will establish priorities for pricing. In particular, how will ESCOSA identify and prioritise issues of interest and value to water customers?

I think that goes pretty close to what I was saying earlier about Treasury directing ESCOSA via the pricing order. That parallels what the SA Water Customer Council has submitted to the consultative draft.

Barossa Infrastructure Ltd put in a submission, and I am not sure whether it would be exempt under the act or would have to rely on the minister of the day to provide an exemption through a regulation. The last submission that I want to quote from is that of Blue Sky Water Partners, and they point out:

Re the Water Industry Bill 2010.

Our company manages investments in water entitlements across Australia's surface and groundwater systems for long-term private and institutional investors. We sell the annual allocations derived from such water entitlements typically to irrigated agricultural producers. We do not use the water ourselves.

In principle, we support the thrust and terms of the bill and look forward to the development of section 27, Third Party Access Regime. We expect to be one of those customers that will seek access to bulk water supply infrastructure.

Again, that raises the issues that I talked about earlier concerning third-party access. As I said, I think in general there is a pretty common theme in the submissions about third-party access.

The water industry in South Australia is a fairly complex beast. We basically have a giant of an organisation that holds a monopoly, that is, SA Water. It provides potable reticulated water across much of South Australia. Certainly, its big market is in metropolitan Adelaide but in rural and regional areas it supplies most communities of any significance with a reticulated potable water supply. As I said earlier, I think it supplies non-potable water particularly to outback communities (places such as Yunta and Terowie). It also supplies sewerage services across the major communities in South Australia and, obviously, in metropolitan Adelaide. It is the giant—

The Hon. P. Caica: Wastewater. They provide wastewater to McLaren Vale.

Mr WILLIAMS: The minister rightly points out that it also supplies wastewater from its wastewater treatment plants both to the north and south of Adelaide. The scheme at Christies Beach provides the Willunga Basin Water Company via a pipeline down to the Willunga Basin that transfers treated wastewater from Christies Beach; and also at Bolivar there is a similar sort of scheme out to Virginia.

I am glad the minister reminded me of that. The Virginia pipeline system was set up when we were in government and we thought it was important that the water was utilised rather than being dumped into the sea—a fair bit of it still gets dumped into the sea. We deliberately set a very low price on that water and an amazing amount of that water does get utilised.

It overcame a couple of problems, not the least being what was seen as overuse of the groundwater in the Virginia area and a risk to the groundwater basin out there. That risk has been ameliorated because of that scheme, and the scheme has been successful on a number of fronts but largely because of the price set. I juxtapose that with the Glenelg to Adelaide Parklands waste water pipe, where the price of water has been set at, I think, 75 per cent of the potable water price. We have seen a very small level of uptake of water from that scheme.

Notwithstanding that the vast majority of the cost of that scheme was provided by the commonwealth government—I think it was about a $72.5 million scheme—the government of South Australia still chose to set the price of that water at 75 per cent of potable water. As a consequence, there is a huge amount of capacity in that scheme, in that pipeline, which is just not being utilised.

Why would an end user go to the cost of putting in their own infrastructure? That is what you have to do: you have to put in your own separate infrastructure on your property to deliver water around your property and to utilise that water because it is non-potable water. You have to make sure that you keep it separate from the potable water supply, and that all comes at a significant cost. There is a significant connection fee, and it takes you a fair while to pay back those costs of connecting.

It is really interesting to see the difference between the take-up of those two schemes: the Bolívar scheme, which delivered water at a very low cost to irrigators in the north, compared with what is known as the GAP, or the Glenelg-Adelaide Parklands scheme. The difference is largely about cost, and that is largely public policy. What we do see from the Glenelg Wastewater Treatment Plant is that most of the treated wastewater produced is just dumped into the sea, as it always has been, and that, again, contributes to those problems I referred to earlier in the day. So, that is SA Water.

We also have councils. I have talked about councils and where they fit in to the scheme. We have councils certainly in metropolitan Adelaide who are getting a toehold into the supply of non-potable water, particularly for parks and gardens. Some councils are starting to get to the point where they are wanting to deliver water to householders for non-drinking use. We have the council wastewater management schemes about which I will talk fairly extensively.

The other big issue for councils, of course, is that they are responsible for stormwater management. This comes right back to where I talked much earlier about the silo mentality towards the management of water here in South Australia, where we have councils responsible for stormwater management and SA Water responsible for bulk potable water supply, and there seems to be no way of meshing the two together. As a consequence, we fail to make the best use of our resources.

We come to the bill. I have talked a bit about the bill and what it might do. I just want to talk about a couple of things that the bill does not do and things that I want to address—

The Hon. P. Caica interjecting:

Mr WILLIAMS: There are more things that the bill does not do. The bill does not set out how non-potable water entities—for want of a better term—will be treated. I would like to think that they would be exempt at the minister's discretion but, because no undertaking has been given, I will be moving amendments to exempt non-potable water supply. I see no reason and no rationale for treating non-potable water supply in the same way as potable water supply, and I see no rationale for treating non-potable water supply as an essential service.

It is just another commodity like any other commodity. It has nothing to do with your health needs, it has nothing to do with essential drinking water supplies, nothing to do with health needs for bathing and washing and toilet flushing. I think they are essential services and there is a good argument for having a very tight regulatory regime around those essential services. But to have non-potable supply treated the same way, I think, is nonsense.

I think it is nonsense to treat council wastewater management schemes in a heavy-handed regulatory manner, and I will be moving amendments to exempt them under the legislation. I would like to think that the minister will say when he sums up that, yes, we always intended to exempt them but we do not think that we need to apply all of this heavy-handed regulatory regime to them. In fact, what I propose to do in that area is to exempt all but essential services water entities under the act from part 4 and part 8 of the act. We will come to that in the third reading anyway. It is part 4, the licensing and then the enforcement sections of the act, and I do not think there is any rationale in applying those to non-essential services. I will be moving that way via amendment.

I will be filing a significant number of amendments later in the day; I am still consulting with some local government people. One of the things that I want to talk about very briefly now, before I conclude my remarks—and the minister may or may not be aware of this. I know that he is aware that SA Water not only supplies potable water for domestic uses, but in rural South Australia it supplies drinking water for livestock over vast areas of South Australia—all the way from Keith in the north of my electorate to Ceduna on the far west coast.

The farming community have been contacting my colleagues and me about what has happened with water price rises in recent years and they question how they are going to be able to continue to run livestock on their farming properties. This impacts on vast areas of land of South Australia, on most of the settled areas. What we could see if we get this policy wrong (and do nothing about getting the policy right) is vast areas of South Australia de-stocked. It will be no longer viable to run livestock. I have constituents in my electorate around Meningie who are paying well over $100,000 a year for water for livestock.

The government has indicated that the water price will rise dramatically again next year as it did this year, and this is getting to the point where it is no longer viable for some of that land to carry livestock simply because they cannot afford to provide the water for the stock to drink. One of the things I will be proposing—and I hope the government will give very serious consideration to it—is a third-party access regime, a special one. It would provide a regime whereby, and I know it will be fast tracking third party access, landholders—

The Hon. P. Caica: You're right, mate, keep going.

Mr WILLIAMS: I want you to hear this, Paul.

The Hon. P. Caica: I am listening to you. You were up to potable water supplies being used for stock and domestic. The policy, in your view, is not right—

Mr WILLIAMS: I want to be able to provide a reasonable cost of water for livestock.

The Hon. P. Caica: —and then you were going to go on to a solution to that.

Mr WILLIAMS: Yes, and providing reasonably priced water for livestock production. The way, I think, we can do that is to provide a completely different product to what is provided by SA Water now. I will argue that it can be done via a special third-party access regime whereby farmers, individually or they could get together and actually purchase a water licence on the market, in the river, and then have SA Water provide a delivery service. So, they would actually own the water.

The reason I have put this proposition is that it is a completely different product. It is just a delivery service. I have talked to a lot of farmers about how we might overcome this and they are suggesting to me, 'Oh, we could just provide them with a separate price.'

The Hon. P. Caica interjecting:

Mr WILLIAMS: Well, I'm going to propose it, yes.

The Hon. P. Caica interjecting:

Mr WILLIAMS: Yes, I am foreshadowing that this is an amendment that I will be proposing. The minister may not be aware, but this issue for livestock producers is getting pretty dire and it is fairly urgent that we do something. It is not something that, I think, can wait for the minister to do his review into third-party access. I do not think it is something that can wait for another couple of years. I think it is something we need to address forthwith. So, I will certainly be proposing that SA Water provide this service, and so I will be sponsoring amendments to that effect. There are a number of other amendments. I am not going to go through them all here. There is a significant number of them and, as I said, I am still—

The Hon. P. Caica: You should give us an idea.

Mr WILLIAMS: When I have finished speaking, I have to make a phone call to the LGA—

The Hon. P. Caica interjecting:

Mr WILLIAMS: Well, we are still negotiating on a couple of points, then I am pretty well ready to file the amendments, Paul, and you will be able to have your people look at all of them. I am hoping you will support them all. They are all very sensible.

I have probably taken a little bit longer than I initially intended but that is not unusual for me, apparently. I think the bill has potential. I do not think it is the sort of regime we should be applying to non-potable water supply. That is one of the key points. But there are a number of minor issues that I want to raise in the bill which I think will improve the bill markedly and make it much more user-friendly. As I said, I will hopefully be able to file those amendments very shortly. You wanted to get on with this this evening?

The Hon. P. Caica: Tonight, yes.

Mr WILLIAMS: Okay. So, I am hoping that, with the dinner break, at least the minister can have an opportunity to have a look at those amendments and take some advice on them. I would certainly hope that the government takes the amendments seriously, like the one I have just talked about, about an access regime, basically to guarantee the continuation of livestock production in South Australia, because that is a significant part of the state's economy. In fact, I think livestock production, both through wool and meat, provides a significant portion of the gross state product.

The bill, obviously, repeals those current acts which give the powers to allow our water systems to work and to operate their infrastructure. This bill will replace that. I think it is time that we streamline some of the older legislation. I support that, but, as I said, I will be moving a range of amendments which I think will give those people in the industry a much better understanding of what is in and what is out, and they will not have to be reliant on making further submissions and getting regulations to define what is in and what is out.

There a number of other minor issues which I think will make the bill much more user-friendly, and I look forward to the committee debate on those individual matters. I will conclude my comments there, without making the comment I was going to, and I suspect that some of my colleagues will have a few comments to make as well.

Mr WHETSTONE (Chaffey) (17:10): I would also like to have some input into this Water Industry Bill, and I am sure the minister has been all ears for the last couple of hours, by the sounds of things, but I would like to make a short contribution. Regarding the state water demand and supply statements, I note that the bill makes mention of the extent of the security and reliability of the state's water supplies in the preparation of this statement but does not specifically mention water quality. I would like this statement to specifically refer to the quality of the water supplied particularly to small regional communities. I think the poor quality of water delivered to some of these communities needs some urgent attention.

I have met with the minister and his staff on, I think, two occasions, to discuss one particular issue, and that is the Ajax Achilles area at Lock 4 in the Riverland. I have met with the minister on a number of times relating to the water quality issues there and we noted that a white ibis rookery has been the hindrance for some reform in that backwater. I think the minister should acknowledge that there needs to be some reform up there.

I think there are two solutions, and it is quite simple. Treated water goes past that community. Twenty households live in that small community near Lock 4, and those households are sucking out of the Ajax Achilles. The water quality there at most times is totally unacceptable, and I think, to date, the minister has acknowledged that the pipe that passes nearby is out of the question.

It is a very expensive proposition to put in new piping and to pipe water to that small community, but the excuse I have been given as to why no earthworks will be performed in that area is the white ibis rookery. Whether it is a breeding colony or a large family of white ibis, to me it beggar beliefs that we are going to put birdlife ahead of potentially risking human life when it comes to the quality of water.

This has been happening for some time now. We have just had a high flow event—not a flood event—that the minister could have used to clean up the water quality in the Ajax Achilles, but he resisted any form of reform, and those people are still sucking black water out of that backwater. The water has been tested on a number of occasions, and I have been informed today that they have just completed another water test and the E. coli levels are increasing. They did not decrease over the high flow, they are increasing, and that is due to the lack of flow through that wetland.

In the meetings I have had with the minister and his department over this issue, it has been put on the backburner once to often, and it now needs to be addressed. The inlet and the outlet have been cleaned out once before and it improved the water quality; it needs to be done again. I think that using the bird life, using the rookery, using a breeding colony as an excuse is really putting that issue in the too hard basket and not actually dealing with what needs to be dealt with.

Looking around the region, it is great to see that we have five filtration plants that have been put in there between, I think, 1998 and 1999 and the early 2000s, with Renmark, Berri, Loxton, Cobdogla, Barmera and Waikerie. It really is about extending quality of water to these communities. I do not think people are asking too much. I have been over there, and people run water into their sinks and baths and you cannot stand the smell, not to mention that the water is absolutely black and putrid.

I would like to note that the irrigation trusts are not part of this industry bill amendment but, again, people in those communities, who have water supplied to them through irrigation infrastructure, also experience the black water events. I think that was fairly well noted in the media this year, when the black water event came down the river. We had the deoxygenated water; it smelt particularly bad and had a very bad colour. These people are living a life of danger, dealing with water that potentially has high bacteria, high E. coli levels, yet the small community over at Ajax Achilles has just been told, 'No, we are not prepared to do anything; we are not prepared to help. If you want water you have to pay for it yourself.'

Again, I think the minister and his department will be receiving a phone call from my office to perhaps further this. I am not looking to do anything more than find a solution for these people before there is, I guess you could say, a poison event, or an event of great disadvantage to a small community that could have been prevented by the simple cleaning out of both the inlet and outlet of the Ajax Achilles wetland.

The member for MacKillop touched on many issues in his lengthy contribution on this, I would like to particularly touch on the desal plant. Obviously that is one issue that has been an absolute nightmare for the incoming water minister. It was an initiative that was brought to the fore by the previous water minister, the same government. In its wisdom it agreed to put in a 50 gigalitre desal plant down at the old Port Stanvac site. I commend it for that; I thought that a 50 gigalitre desal plant was a great initiative. It was something that the state needed, and it was sold to the people of South Australia that the 50 gigalitre desal plant would take the pressure off the Murray, the reliance off the Murray.

As it has turned out, the trickery, through the craftsmanship of releasing something like this plan, was that it took no reliance off the river whatsoever. In doing that, it increased the 50 gigalitre plant to 100 gigalitres. The angst it created to every South Australian is just a head-shaker, it really is.

As I said, I commended a 50 gigalitre desal plant. Diversity of water supply into South Australia is what we are about, because it really is about looking at every way, every measure to put that diversity into the water supply. People had taken the water supply for granted for many years; they would turn on their tap and there was water there. They watered their gardens, and they were nice and lush and green. Irrigators had plenty of water to water their crops, to keep their businesses alive, and all of a sudden we have restrictions. We have water shortages, we have the threat that, with predictive water use through one particular year, there was not enough water in storage to accommodate the loss of water down the river system, but also the need for water for metropolitan and country towns of South Australia.

As I would like to put it, it was political, yes. I noticed the minister shook his head when the member for MacKillop mentioned that it was just a political exercise. It was a political exercise, yes, but it was policy on the run. It was policy that was developed on the run. The 50 gigalitre plant was put in place as that diversification mechanism, but the 100 gigalitre plant was almost like two scoops of ice cream rather than one. It was just something that was put there and they thought, 'Well, we'll go for the 100, and we will ensure that if Adelaide and the country towns need about 100 gigalitres a year, there's our water supply.'

Why did the blinkers come on all of a sudden? We looked at stormwater and re-use. 'No, we can't have stormwater re-use because that's not reliable, clean water.' Well, let me tell you that river water is stormwater. Every bit of water that is in that river is stormwater; it's run-off. Every bit of water that goes into the creek is stormwater; it's run-off, and it flows into the main channel. So, again, the denial of stormwater in the early days was simply something that cost every taxpayer in South Australia, because we had the increase from 50 to 100 gigalitres in the desal plant. And now the government has finally recognised that stormwater is something that needs to be recognised. It is a resource that, if managed and cleaned, can be used.

I would like to think that it could be used for drinking water. Perhaps it is considered a little risky to think that we will just reclaim stormwater, clean it, put it in our aquifers, or put it into storage, or put it into pipes, and put it in front of people so that they can make their choice as to whether they would consume that polished stormwater. Everyone here drinks river water. They drink treated river water, and the perception is that it is safe, it is clean, and there is no problem with it. What is the problem with polished stormwater? That is one of the pretty good questions that no one seems to answer. It is just a fear—

The Hon. M.J. Atkinson: Road water, diesel water?

Mr WHETSTONE: Yes; what's river water? Where does the river water come from? What runs into the river? The roads, the gutters, every little bit of catchment along the river comes from the roads into the river system, the main channel. Yes, it's stormwater. That's exactly right. Let me tell you—

Members interjecting:

The ACTING SPEAKER (Hon. M.J. Wright): Order!

Members interjecting:

Mr WHETSTONE: Well, you've come late to the talk, so you really need to have a bit of a listen. Every bit of water, whether it's run-off water off your roof—that's stormwater too. It is just that it does not run down the road before people get to capture it. That's exactly right. Getting back to the crux of the issue, again we look at the desal plant and the interconnection of the pipes. The $2.2 billion is really something that could have been avoided by leaving the 50 gigalitre desal plant and putting more resources, more expertise, into using that stormwater, using the reused grey water. There are applications for that water wherever you look. If people are scared to drink polished, reused water, polished stormwater—

The Hon. M.J. Atkinson: 'Polished'?

Mr WHETSTONE: That's what you drink every day, member for Croydon—polished water. Every South Australian is paying the price for the extended desal plant—every South Australian.

The Hon. K.O. Foley: Save the Murray.

Mr WHETSTONE: That's exactly right; but what reliance are we taking off the River Murray with this desal plant? Were not taking any reliance off the River Murray. All we are doing is putting in a desal plant that every South Australian is paying for just in case. The 50 gigalitre desal plant was a fantastic idea; I supported it 100 per cent. It is the extra 50 gigalitres that every taxpayer is going to have to pay for. Now they are paying for the 100 gigalitre desal plant and they are paying for stormwater capture and polished stormwater, for what?

The Hon. K.O. Foley: You didn't govern during a drought, mate. It's a risk mitigation strategy.

Mr WHETSTONE: It is diversity—that is what we need to be looking at. Every South Australian is paying for a desal plant that takes no reliance off the River Murray.

The Hon. M.J. Atkinson interjecting:

The ACTING SPEAKER (Hon. M.J. Wright): Order!

Mr WHETSTONE: Again we are talking about trying to diversify Adelaide's, or South Australia's, water supply and people are in denial that the proper package could have been the 50 gigalitre desal plant and putting those extra resources into capturing the stormwater that is running out to sea, and capturing the stormwater that perhaps runs into the river.

The Hon. K.O. Foley: It is more expensive.

Mr WHETSTONE: Who is paying the price today? Every South Australian taxpayer is paying exorbitant amounts of money for their water.

The Hon. M.J. Atkinson: The Sultan of Brunei.

The ACTING SPEAKER: Order!

Mr WHETSTONE: Again, I would like to get back to exactly why the 50 gigalitre proposal for the desal plant was a much better proposal than the 100 gigalitre plant. Again, we look at what it is costing the South Australian taxpayers. Would we have had to put the dual system in if we had stayed with the 50 gigalitre plant? Would we have had to put that extra cost? The saline is running out into the gulf and science tells us that it is going to be okay, but then all of a sudden we have the proposed BHP desal plant running into another gulf, and science is going to tell us that that will be okay too. So we will have two desal plants running into two gulfs and science is saying that everything will be okay. It is a bit like science said that it will take 10 to 20 years to fix up the Murray-Darling Basin down at the Lower Lakes. It took four months to fix up the Lower Lakes.

The Hon. P. Caica interjecting:

Mr WHETSTONE: If you had moved and pulled those bunds out any earlier, it might have been a lot better off, I can assure you. It is all about politics. It is all about the lack of will to reform.

An honourable member interjecting:

Mr WHETSTONE: Yes it is. It is absolutely the lack of reform. As I see it today, the only scapegoat that the government has are the irrigators, because the irrigators give up the water for everyone else to have what they need.

The Hon. P. Caica interjecting:

Mr WHETSTONE: I can assure you it is not rubbish; it is absolutely true. Being an irrigator I have felt it right where it hurts, and the decisions of government—

The Hon. M.J. Atkinson interjecting:

The ACTING SPEAKER: Order!

Mr WHETSTONE: —being able to carry over, I am sure it is, 150 gigalitres of urban water. Where did that come from and what is that being used for? As I understand it, I think it is going onto the water market. Who is getting the benefit from that? It is another cash cow by this government. It is absolutely outrageous to think that—

The Hon. M.J. Atkinson: Everything is 'outrageous'.

Mr WHETSTONE: Well, you're the government—

The Hon. M.J. Atkinson interjecting:

Mr WHETSTONE: If I could just move along. I have spoken on the Ajax Achilles; we have spoken on the very, very touchy issue of the desal plant, that the member for Croydon seems to have a lot of knowledge about, particularly on stormwater and run-off.

The Hon. M.J. Atkinson interjecting:

The ACTING SPEAKER: Order, member for Croydon!

Mr WHETSTONE: So, again, we look at the saline product going into one gulf and then, all of a sudden, it will be going into both gulfs, and science will say that everything will be okay. That is one of the initiatives around the Water for Good water policy. Let me assure you, coming from the regions, it is not Water for Good, it is water for Adelaide; that's what it is. Every South Australian is paying for water for Adelaide.

The Hon. M.J. Atkinson: Oh, terrible—water for Adelaide.

Mr WHETSTONE: That's exactly right. Where are the incentives for every water user in this state to use less water? We are getting increased bills, higher costs and for what? We need incentives. We see small incentives to put drip irrigation into gardens. We see incentives to put in a partial rainwater tank. Where are the real incentives for people to keep streets clean so that it is cheaper to polish the stormwater, so that that water can be reused at a greatly reduced cost? Where is the initiative?

As I have one minute to go, I would like to touch on the Ombudsman opening up the water industry to competition. I think that SA Water has been proving that it is an outstanding cash cow for this state, and we must show that competition in the water industry will benefit all consumers and all taxpayers of South Australia.

We have the Save the River Murray levy. There needs to be greater transparency and accountability required for the collection of this money. Where is that money being spent? Where are the Save the River Murray levy contributions going? We look at levee banks up in the Riverland that are being disowned because, 'It's not my responsibility' or 'I'm not going to pay for it.' What is going on? Save the River Murray levy—they are the sort of contributions that should be underpinned by that fund.

Debate adjourned on motion of Mr Sibbons.

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