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

Committee Stage

In committee.

(Continued from 19 October 2011.)

Clause 2.

Mr WILLIAMS: I move:

Page 7, after line 5—Insert:

(2) Sections 18 and 26 must be brought into operation on the same day.

The amendment is quite simple. I mentioned in the second reading that I had some concerns about the lack of haste in bringing in the third-party access regime. This simply ensures that, at the same time that the section of the bill that institutes the new licensing regime comes into operation, it obliges the minister to take certain actions to institute, or instigate, the process of moving towards third-party access, which also comes into play. As I expressed, I want that third-party access regime to happen as quickly as possible, and this is just to ensure there is no delay in proclaiming that particular section of the act.

The Hon. P. CAICA: I said last night in my winding up of the second reading that we would do an analysis as best we could of the amendments that were provided by the opposition. Of course I, as a minister, have always taken any amendment seriously; where we think it can add to clarity, we will support them in this.

It seems that the member for MacKillop has concerns that the government would perhaps delay its work on third-party access, that is, by having these provisions perhaps commence at different times. The member's proposed amendment is consistent with the government's intent that the third-party access provisions should come into effect at the same time as the rest of the legislation. However, I am more than happy to make this explicit through the making of this amendment, and the government will support the amendment.

Amendment carried; clause as amended passed.

Clause 3 passed.

Clause 4.

Mr WILLIAMS: I move:

Page 9, after line 24—Insert 'River Murray has the same meaning as in the River Murray Act 2003;'

This amendment is consequential to a further amendment. I am not sure what the government's position is on the further amendment, but the further amendment that this is consequential to establishes, as I talked about in my second reading, a third-party regime which allows our livestock producers to purchase water and have SA Water provide a delivery service. This definition is necessary to make sure that that purchased water is water purchased off the River Murray.

The Hon. P. CAICA: I assumed, quite rightly, that this amendment relates to amendments 16 and 19 in relation to water for livestock production, as was detailed last night. I think it is appropriate that we deal with that matter under clause 25 when we get to it. I am not quite sure how we do this—whether we consider it subsequently when that comes up, as opposed to dealing with that definitively now.

Mr WILLIAMS: Is it possible for us to come back to this clause later? As I am told that we can postpone this clause, I move:

That we postpone consideration of this clause and move to the next clause.

Motion carried; clause postponed.

Clause 5.

Mr WILLIAMS: I move:

Page 12, after line 17—Insert:

(3a) Parts 4 and 8 of this Act do not apply to or in relation to—

(a) a Community Waste Water Management System operated by a council, or a subsidiary of a council; or

(b) a retail service that is constituted solely by the supply of non-potable water.

(3b) In connection with subsection (3a), a council, subsidiary or person who provides a service referred to in that subsection will, subject to any provision made by the regulations, be taken to be a water industry entity for the purposes of the other Parts of this Act.

Again, I talked extensively about this yesterday in my second reading contribution. This clause comes to the crux of the debate that I put: why would we institute a rigorous licensing regime on what is, indeed, not an essential service, that is, a non-potable water supply and, indeed, a council-run community wastewater management system?

As I stated yesterday, those systems, by and large, are run in small communities, far-flung communities in a number of cases. They are actually being run by councils because, historically, the E&WS was disinterested in running and providing the service. Without councils running these services, we would have a diabolical situation. In most rural communities, we would have no organised sewerage system at all.

Again, the local government sector sees that they are providing a service to their community, a service which nobody else is interested in providing. They have done it under the Local Government Act since at least the 1960s and it works very well. The local government sector argues, and I certainly agree with them, that it is just duplicating and providing another layer of bureaucracy to their operations in providing this service to their communities. I am moving these amendments so that we exempt councils' community wastewater management services from parts 4 and 8.

Also, part 3A(b) would exempt a service which provided non-potable water—principally, I am talking about these councils that have been developing stormwater harvest, storage and re-use services. Again, the opposition thinks that it is nonsensical to regard that as an essential service, and we do not believe we should be applying the same very rigorous licensing and regulatory regime to those services. They should be treated like any other business providing a non-essential service, and be free to operate under market forces.

The Hon. P. CAICA: I understand from this, as made reasonably clear by the member for MacKillop, that he wants to exempt community wastewater systems from the requirement of this legislation. Without being disrespectful, because that is not how I am, it seems contrary to other statements made in the house yesterday which recognised the regulation in relation to essential services.

I think that most South Australians would regard community wastewater management systems as essential services. I am told the Local Government Association estimates that approximately 200,000 people (over 10 per cent of the state's population) are served by these schemes, and this number is increasing as the government will continue to support the installation of new schemes across the state.

The government and I think that some level of consumer protection is appropriate for these essential services, and, consequently, this is why we have deemed it necessary for it to be covered in this bill. Having said that, ESCOSA would take into account the nature of the entity in determining the appropriate level of regulation. Far be it from me to pre-empt what the independent regulator would do, but I can see them taking into consideration the size and scale of various operations with regard to whether or not they would provide an exemption to those entities on that particular basis.

Quite simply, this would provide those entities with the benefits of the bill without the commensurate responsibilities, if indeed they were to be exempted—as the opposition requires—without the commensurate responsibilities in the provision of an essential service.

On the issue of non-potable water, the government and I are at a loss as to the member for MacKillop's rationale for proposing this amendment. It would appear to be proposed on the basis that non-potable water does not constitute an essential service; however, this is clearly not the case. The member for MacKillop knows as well as I do that, in some rural towns, their supply from SA Water is only non-potable water. Nevertheless, it is still essential, and it still needs to be under—in my view and that of the government—a regulatory regime.

If we look at the lilac systems that exist in the north and south of this city that are being used to flush toilets, which I think this is an essential service—the ability to flush your toilet—they are using non-potable water for that particular purpose. I think that for the purpose of clarity, the government is going to continue to say that these systems ought to come under this part of the act.

Having said that, I would expect that ESCOSA would have a good at that, as the independent regulator, depending on the size and scale of that particular operations, and will take that into account when determining the status of those particular entities who are providing that particular service, which we say is an essential service.

Mr WILLIAMS: First of all, the minister suggested that we need to capture water delivery services that are non-potable services in some outback rural communities, and I mentioned a couple of places like Yunta and Terowie; I think even Hawker might be one of them. The member for Stuart raised this matter with me some weeks ago. There is a further amendment—I cannot inform the committee of the number of that at this point—which covers off on that which ensures that, without the sign off by the minister, those services provided by SA Water must be continue to be provided by SA Water. So, I think that covers off on that point that the minister raised.

With regard to the council community wastewater management systems, the reality is that the regulations covering these are currently in the Local Government Act, the Health Act and they are also subject to the EPA licensing. Those systems are already regulated under three acts of this parliament, and I continue to argue that this just provides another licensing regime for those councils.

As I informed the house yesterday, some of these schemes have as few as 11 or 12 connections to them. Notwithstanding that they are already regulated under a number of acts of this parliament and already meet stringent health and environmental controls under those acts, all we would be doing here is providing another licensing regime, another layer of red tape.

This government for years has been trying to convince the people of South Australia that it is cutting red tape. We are going to institute another layer of red tape over the local council sector which, as I said yesterday and I repeat again today, is actually providing a service that nobody else is willing to provide. If you make it too difficult for the councils and they walk away, is SA Water going to go in there and pick up these systems? I do not think so. They have never shown any interest in them previously. There is nobody else who is going to take them on. We are left with the councils doing them. They run them very cost effectively.

The costs are already regulated under the Local Government Act. They do not need ESCOSA to come and provide another layer of bureaucracy and reinvent the wheel at a cost to councils. There is nothing that will be delivered under this bill to improve the system of provision of those services by councils. There is nothing to make them more effective, more efficient, and there is no ill that needs a cure. That is why the opposition is proposing this amendment.

The Hon. P. CAICA: I thank the honourable member for his contribution but it doesn't change the government's view. He is quite right to highlight many aspects of local government. Many of the mandatory licensing conditions already reflect the state government policy on the proper management of local government infrastructure, so I would probably say then that if that is the case and it makes no difference, why would the opposition be opposing it? The only point that I would make in concluding is that the other aspects of the state government policy enshrined in other pieces of legislation are not necessarily about consumer protection. It is not about economic regulation, which is the basis of the thrust behind this particular clause.

Mr WILLIAMS: It seems that we are going to agree to disagree on this. We will see what the other place thinks of this proposal. The consumer protection issues are covered under the Local Government Act, as is the pricing mechanism, but it is already covered by state legislation. I talked about this at length in the second reading. There is a silo mentality regarding the management of water in South Australia, and the councils have been left out there to manage stormwater and, notwithstanding the rhetoric, they have had little support from this government regarding an integrated stormwater harvesting system and all the works and delivery systems associated with that. Local councils have been left to their own devices to do that.

I suspect that the government has come along and said, 'Hey, what's going on here? We have had our eye off this ball for so long that we have a network of councils out there that are going to become serious players in the water market with this non-potable water supply and we need to be able to control them.' Having taken their eye off the ball, I am not sympathetic to the position the government finds themselves in because I have been arguing this point for a number of years to a number of ministers. There has been a steady change of ministers, and none of them has accepted the reality of what has been going on out there in the real world.

Now somebody in government (probably in SA Water) has come to the realisation that, having taken their eye off this ball for so long, we now have some serious players out there in the marketplace that might interfere with SA Water's monopoly position. Well, I say to the minister, 'Bad luck.' SA Water showed no interest in it, and your government showed no interest in this matter for years, and now you want to impose a regulatory regime after the horse has bolted to ensure that you can determine what price those councils charge for their water.

You can put a heavy-handed regulatory regime over the top of them to keep them under control to stop them acting and creating a really competitive water market in this state. That is what you are implying when you talk about this bill. That is what you want to deliver. You want to deliver third-party access, you want to deliver a competitive water market, a competitive water industry, and that is how you do it. You let the market work. You do not restrain the players in the market with heavy-handed regulatory and licensing regimes, heavy-handed high cost licences and price setting to determine what sorts of prices they can charge.

You are taking away their ability to develop a water industry market in this state. You will be doing exactly the opposite to what your rhetoric on this bill has been saying for the last 12 months. So, again, the local government sector, which has been forced into this position with very little support, is outraged that they are going to be put under a very heavy regulatory system with all the associated costs and all the restrictions. That is why the opposition is proposing this amendment, and we think it is the key to getting this piece of legislation right.

The key to it is to accept that supply of essential water—in most cases, it is potable water. As the minister pointed out, and as I said, I have an amendment to cover off on those far-flung communities where, notwithstanding SA Water supplies their water, it is not potable. But those organisations that are now in the marketplace, or getting into the marketplace, and not supplying an essential service are doing nothing more than anybody else down the local street selling a product. It is not an essential service. In fact, it is nowhere near as essential as foodstuffs, but we do not have these sorts of regulatory and licensing regimes over people who are selling foodstuffs up and down the street.

This is just another product that is being sold into the market. It is not an essential service. It does not need to be regulated in the way the minister is doing it. The market would look after this very well. The dilemma that the government has made for itself is that it is going to be competitive with SA Water.

The Hon. P. CAICA: I do not agree, of course, with the views being expressed by the opposition deputy leader, but I will respect his views. The first point I make is that the member for MacKillop talks about an integrated system. Of course, to fully integrate a system—and he uses the word 'system'—is to make sure that it is underpinned by a regulatory framework that actually assists in that integration. He talks also about being heavy-handed, and I do not see this as being in any way heavy-handed. Of course, the member for MacKillop would know as well as I, that, in making decisions, ESCOSA is bound by its act. It cannot be heavy-handed. It is bound by its act.

Of course, two aspects which it is bound by and which underpins any decision that it makes has to be in the long-term interests of consumers. Secondly, ESCOSA has to consider, if you like, amongst other things, its decision in the context of economic efficiencies; so, it needs to take that into account.

Again, there may be, as I mentioned earlier, certain providers and small providers of non-potable water supplies in some areas that ESCOSA may choose to deal with as it sees fit. I certainly say and the government certainly says that, if we want to achieve the objectives that have been espoused by the member for MacKillop, the best way of doing that is supporting this bill, because that is the way the objectives of the member for MacKillop will be delivered.

Amendment negatived; clause passed.

Clause 6.

Mr WILLIAMS: I move:

Page 12, after line 17—Delete '12 sitting days' and substitute: 14 days.

Page 13—

Line 10—Delete 'laid before both houses of parliament; and substitute:

Delivered to the President of the Legislative Council and the Speaker of the House of Assembly.

Lines 27 and 28—Delete subclause (10) and substitute:

(10) The Minister must, immediately after the finalisation of the report under subsection (9), cause copies of the report to be delivered to the President of the Legislative Council and the Speaker of the House of Assembly.

After line 28—Insert:

(10a) When the President of the Legislative Council and the Speaker of the House of Assembly receive a statement or report under this section, the President and the Speaker must—

(a) immediately cause the statement or report to be published; and

(b) lay the statement or report before their respective Houses at the earliest opportunity.

(10b) If the President of the Legislative Council or the Speaker of the House of Assembly is absent at the time that a statement or report is delivered to the Parliament under this section, the Clerk of the relevant House will receive the statement or report on behalf of the President or the Speaker (as the case may be) (and the statement or report will then be taken to have been received by the President or the Speaker).

(10c) If a statement or report is received by the President of the Legislative Council or the Speaker of the House of Assembly at a time when Parliament is not sitting, the statement or report will be taken to have been published under subsection (10a) at the expiration of 1 clear day of receipt of the report.

(10d) A statement or report will, when published under subsection (10a), be taken for the purposes of any other Act or law to be a report of the Parliament published under the authority of the Legislative Council and the House of Assembly.

I am more than happy to put these amendments. The minister might not agree to that. My first amendment is simply a technical amendment to delete 12 sitting days, which is the time within which the minister will be obliged to table a report in the parliament. There are two amendments to the one clause here, and I am quite happy for them both to be put together, if the minister is happy with that. My amendment No. 4 seeks to delete 12 sitting days and substitute 14 days. The reason is that, if, for instance, a minister sometime in the future got this particular report today they would not have to table it until probably March next year, and I just think it is a nonsense.

These clauses are in a number of our statutes, and I think it is nonsense. We should actually have a time limit which recognises the fact that, quite often, the house does not sit for a couple of months over the summer period—and certainly in the winter period. Similarly, my amendment No. 5 is consequential to that, because if you have the report tabled on a sitting day, obviously it is tabled in the house.

However, my amendment No. 5 actually says that it can be delivered to the President of the Legislative Council and the Speaker of the House of Assembly, which means that the report can actually be tabled out of session of parliament. What I am saying is that we would have the report tabled in the parliament, delivered to the President and to the Speaker in a timely fashion, and the house could be apprised of the contents of the report in a timely fashion rather than waiting for months and months.

The Hon. P. CAICA: Far be it from me to be as bold as I am going to be, but, with the acquiescence of the deputy leader, on this side we would see that we deal with amendments Nos 4, 5, 6 and 7 as one because, in essence, they are dealing with the finalisation of reports. We would support those four amendments, and that is in the interests of getting out of here quickly if we possibly can. Also, they are technical in nature. I do not personally see them as necessary, I really do not, but if it gives comfort to the opposition I am happy to accept these amendments.

Amendments carried; clause as amended passed.

Clauses 7 and 8 passed.

Clause 9.

Mr WILLIAMS: I move:

Page 14, line 28—Delete

'or conferred by regulation under this Act'

This is about the functions of the technical regulator. The functions are set out in the act and the last part of clause 9 provides, 'any other function assigned to the Technical Regulator under this or any other Act or conferred by regulation under this Act.' Again, it is a technical amendment that I propose. I have many times in this place expressed my distaste at our passing legislation which gives regulatory-making powers.

I think in every instance when we can put a power in an act rather than have it by regulation we are maintaining the sovereignty of this parliament, and I think that is important because we are losing it on a daily basis. If we want the technical regulator to have a different function or another function, I do not see why the minister should not be obliged under the legislation to come back and argue the case for that in the parliament rather than just signing it off by regulation.

We all know that the oversight of regulation by the parliament is fairly limited, and it is very rare that we see regulations overturned. I think providing a new function for the technical regulator is not something that is going to be of an urgent nature that has to be done the next day. It is probably something that is considered in the light of changing technologies, so it is something that I do not think would need an instant reaction; and I do not see why the parliament should give away its right to have a proper debate on the functions that the technical regulator should hold. Thus, I propose my amendment.

The Hon. P. CAICA: Essentially, supporting this amendment would be removing the government's ability to extend the technical regulator's function by regulation. Regulations are a legitimate mechanism, and successive governments for as long as I can remember have used them and in the future will use regulations. I am somewhat intrigued as to why the member for MacKillop sees this as necessary.

What I would say is that we have, underpinning the operations of this parliament, a parliamentary committee system, one of which is the Legislative Review Committee. Certainly in my time as minister, and I expect in a time far, far away when the member for MacKillop is a minister, he may well have some of his regulations disallowed, because it has certainly happened to me. I think the committee system has a legitimate role to play in this process.

I would also say—and I will paraphrase and hope that I am not incorrect—I think the member for MacKillop said he cannot think of any things and it would be more like changes in technology, or whatever it might be, that would take a passage of time, at any rate, so there would not be that urgency. That is a very good reason to continue to have those matters dealt with by regulation, as opposed to necessarily coming back and having to amend an act through two houses of parliament. The member for MacKillop, again in a time far, far away into the future, might be confronted with another place that is somewhat less than focused on the issues that come before it than it might otherwise be.

I am happy to continue to hear the views of the member for MacKillop on why he sees this amendment as necessary. It seems to me to be philosophical as much as anything else, but the government will not support this amendment at this time. I think it needs further consideration. I am happy to continue to talk with the member for MacKillop during the time that it goes to the upper house, and my view is that it requires further consideration in the other place. I will be more than happy to continue dialogue with the member for MacKillop. Quite frankly, I do not see the sense in introducing amendments that are based on a philosophical view, as opposed to an ideological view, as opposed to a view that will enhance the operations by which this act will occur.

Mr WILLIAMS: The minister might be partly right. I do have a philosophical view on this, there is no doubt about that. My philosophical view is that the parliament should do everything it can to maintain its sovereignty. I will give an example of how regulation-making powers, in my opinion, have been abused in recent years, and I think I can say in the term of this government.

We know under the Subordinate Legislation Act that when a regulation is made there is a period of time—it is 14 sitting days—after the regulation is tabled in each house that it can be disallowed, or a motion can be proposed to disallow the regulation. That is a holding motion, and the government itself moves a holding motion on every regulation to give the Legislative Review Committee time to look at the regulation and take some evidence on it. So, there is a process there.

To allow ministers who find themselves in a situation where there is an urgent need to make a regulation, the Subordinate Legislation Act allows the minister, by declaration, to declare that it is necessary for the regulation to come into force straightaway; otherwise, it will not come into force until after the expiry of those 14 sitting days. It has become the practice, rather than the exception, for ministers of the Crown to make that declaration. It has become the practice of the executive government to make a declaration virtually every time that the regulation come into force forthwith.

That is why I make the comment; it is not just philosophical. In allowing this sort of thing to happen, and by allowing this sort of law to pass and that practice to become common usage rather than the exception in exceptional cases, this parliament is giving up its sovereign right to make law. It is handing that right, by and large, to the bureaucracy—not necessarily to the executive government but, beyond that, to the bureaucracy. That is why I oppose it. If the minister were able to convince me—and I know he is not because the facts are on my side on this one—and if he were able to stand up and say that there has been no change in the practice for the last 25 years over what I have just talked about, that is, the signing of the declaration that the regulation needs to come into force forthwith, I might have some sympathy for his position.

However, the reality is that not even the executive government has held onto its power here; it has almost become common practice for the bureaucracy to get the minister to sign that declaration on the regulations, and the parliament's sovereignty has been usurped. Notwithstanding that those regulations that have been brought into force forthwith can be subsequently disallowed, even if they are subsequently disallowed, there is a period where they are in force.

That is the parliament giving up its powers. As long as I am in this place I will make the case for the parliament retaining its powers, and I will demand that ministers—and hopefully I will be one one day and I will be demanding of my colleagues—make the case in the parliament for change rather than give ourselves powers to make it by the stroke of a pen.

The Hon. P. CAICA: I think that this particular clause as printed delivers the degree of flexibility to get things done, that need to be done. The clause that we have proposed here within the bill mimics the electricity and gas act. The proposed technical regulator, under those acts, is expected to be the technical regulator under this particular clause.

I think it is important, for the purpose of consistency across the operations of the technical regulator, that there is, through this clause that is before us, a level of appropriate consistency. It is consistent with what already happens in other areas, particularly under gas and electricity. I am advised that it mimics those. Of course, it is our expectation that it will be proposed that the technical regulator under those acts will extend to the technical regulation under this act.

Mr WILLIAMS: For the sake of the committee getting on I was not going to have anything more to say, but I will make an important point. I know that this bill is based on the gas and electricity law. I do not know how much the minister knows about the gas and electricity law, but I have been the shadow minister for energy for some time, and I have been involved in most of the recent changes to the gas and electricity law in South Australia, for which we are the lead legislator for a national system. Because of that, it is quite a different legislative regime.

We are the lead legislator for a system which imposes those laws on all of the states and territories in Australia; it is a national law. Obviously, under that scenario it is quite a bit more difficult to make changes as you go forward to things like regulations. If you could disallow them, or whatever, by individual parliaments it would become the proverbial dog's breakfast.

Notwithstanding that the principles established in the gas and electricity law have been picked up on this bill—and I accept and appreciate that—the application, the way we apply them, and the way we will move forward with this particular piece of legislation, if and when it becomes law, will be quite different from the national gas and national electricity law, because it will only apply to this jurisdiction. We do not have to be cognisant of what is happening in other jurisdictions and we do not have to go and make the case, and then have an argument, and come to a conclusion, an agreement, with all of the other jurisdictions.

The comparison with those two laws I think has to be made in that context, so that the application of this law will be single jurisdictional, whereas the application of those laws is multi-jurisdictional. I suspect, minister, if you go back and read the Hansard, I probably did make some comments about the regulatory making powers with regard to the law, but I did concede that it was a different scenario because of that multi-jurisdictional reality.

The Hon. I.F. EVANS: I agree with the minister's answer.

Amendment negatived; clause passed.

Clause 10.

Mr WILLIAMS: I move:

Page 14, lines 34 and 35—Delete subclause (2)

Amendment 9 to clause 10 deletes subclause (2). Again, subclause (2) is about the delegation of powers, and I want to explain why I propose this amendment. Recently, under another piece of legislation, I sought to get some information about who in the department had been delegated some authorities from the minister. It seemed that it was impossible to get hold of that information, and that is why I wanted to address this.

What the bill proposes is that the technical regulator may delegate a function or power conferred on the technical regulator to a person or body or to the person for the time being occupying a particular office. I do not have a problem with that. You can delegate the authority. Then subclause (2), which I am proposing we delete, provides:

A function or power delegated under this section may, if the instrument of delegation so provides, be further delegated.

So, I take it that the technical regulator can delegate one of his or her powers to some other person and then, at some stage, that person can delegate it on further, and then that person can delegate it on further and, before we know it, we are not quite sure who has the delegated authority for what.

That is the very experience that I had relatively recently, I think it was earlier this year, when I was trying to get an understanding of who had what powers. If my memory serves me well, it was under the Mining Act. It seems that the departments administering these laws seem to lose track of where these delegations are made.

That is why I am proposing that we delete that. It will not diminish the power to delegate because, further on, a delegation can be revoked. So, all it means is that, rather than that power being further delegated to somebody else, the technical regulator would revoke that delegation and then reissue it to the next person; that is all I am trying to achieve.

The next amendment I will foreshadow at this stage then provides that the technical regulator will keep a public register of all delegations made. I think that in any business, organisation or operation where you delegate an authority, there should be a public register kept. If we as a parliament give a power to the technical regulator, I think we should be able to have an understanding, at any point in time, whether that technical regulator has delegated that power to another person.

In combination, I am proposing two amendments. Firstly, instead of being able to on-delegate a particular power or authority, it has to be revoked from the first delegation and then re-delegated. To me, it is just a simple way of managing the delegations, and then it also makes it very simple for the technical regulator, in this instance, to keep a register, which should be public. We give the power to the technical regulator. I think we have a right to know—we being the parliament and the public we represent—to whom any of those functions or powers have been delegated.

The Hon. P. CAICA: I thank the member for MacKillop for his contribution, and of course it is about, in his view, through this amendment, removing the ability to sub-delegate functions of the Technical Regulator. Notwithstanding the contribution, I remain intrigued as to why he thinks the amendment is necessary. We are not going to support this amendment. The statute book is absolutely full of clauses like this. I know that you would know this to be the case, Mitch, because you have been through it in a forensic way, but clause 10 of the bill places certain conditions under sub-delegation, and that is the way by which it should be managed.

Amendment negatived.

Mr WILLIAMS: I move:

Page 15, after line 6—Insert:

(3a) The Technical Regulator must keep a public register of delegations under this section.

The minister may well say that the statute book is full of these sorts of clauses, and there is never an obligation for somebody who has an authority to delegate part of their authority to somebody else to keep a register—least of all a public register. Notwithstanding that that may be the case, I do not agree with it, and I do not think it is sensible lawmaking. I think if that has been the general case in the past, it is high time we changed it. If the parliament gives authority to any officer, and we give the authority for them to delegate that authority, I think we should be able to be made aware of it, and that is why I am moving that the Technical Regulator keep a public register of all delegations made under this clause.

The Hon. P. CAICA: We will support this amendment. Indeed, if we reflect back on the discussion of the previous clause, the government has no problem with the amendment and, by supporting the amendment, it gives a greater level of governance in relation to what the member had previously said about the previous clause. I believe the best way for it to be dealt with is through this amendment, and we support it.

Amendment carried; clause as amended passed.

Clause 11 passed.

Clause 12.

Mr WILLIAMS: I move:

Page 16, after line 4—Insert:

(2a) However, before the Technical Regulator takes steps to disclose information under subsection (2)(a), (b) or (c), the Technical Regulator must—

(a) take reasonable steps to consult with the person who gave the information; and

(b) take into account any views expressed by the person who gave the information as a result of any consultation undertaken under paragraph (a).

Again, I can tell the minister that I do recall raising this issue in the context of the national gas and electricity laws at the time we debated those. This is about the ability of the Technical Regulator to divulge information that was given to the Technical Regulator, notwithstanding that the information was given confidentially. The bill provides a range of scenarios where the Technical Regulator can, notwithstanding the confidential nature of the information they have sought and been given by industry entities, divulge that information.

I do not think that the restrictions on that in the bill are strong enough, and that is why I have proposed amendment No. 11 which would strengthen those provisions. It is simply that a new 2A would say, however, before the technical regulator take steps to disclose information under the three previous subsections, the technical regulator must (a) take reasonable steps to consult with the person who gave the information and (b) take into account any views expressed by the person who gave the information as a result of any consultation undertaken under (a).

It is quite a simple amendment, but I think it offers a little more protection to the confidentiality of information. I fully appreciate that the technical regulator, to perform their function properly, from time to time will need to access information from entities in the industry. Notwithstanding that, I think every protection should be given to the confidentiality of that information.

The Hon. P. CAICA: I hope we can deal with this amendment very quickly. I am not going to support it at this point in time. It does, in my view, require some further consideration. Again, the member for MacKillop, as opposed to the member for Davenport probably, realises that this proposed amendment actually deviates from what is custom and practice under the energy and gas act. I gave him an undertaking last night to do as much work as we could on these amendments. The advice has come back that we need to seek a little further advice, and I accept this, on the implications of that deviation from custom and practice. We will deal with it between the houses if you are satisfied with that.

The Hon. I.F. EVANS: I rise to support my colleague the member for MacKillop. I am surprised that the minister's agency with all the consultation that this bill has been through—and it has been out for consultation since the King James Bible—everyone has missed this particular point that there is no consistency between this act and the other act to which the member for MacKillop refers in relation to gas and electricity. It just seems that if you were doing this, given that it is an essential service, you would have looked at the other act and said, 'What have we got there that we need to carry across to this act?' I welcome the minister's acceptance of this particular issue. It is unfortunate that it was not picked up in the 2½ years of consultation. I welcome the member for MacKillop's amendment.


[Sitting extended beyond 17:00 on motion of Hon. P. Caica]


The Hon. P. CAICA: I think I thank the member for Davenport for his contribution. I might be wrong, because it would not be the first time, but yes he is correct. It has been through a significant amount of consultation. It was not promulgated at the same time as the King James Bible but it has been around for quite a period of time, but not properly regulated as it will be under this bill. It is the opposition member's amendment that deviates from customer practice, not what we are doing; we are trying to ensure there is some consistency. Again, like standing up at the wrong time to talk about a clause of the bill that is not under consideration, I do not think you have this one quite right.

Amendment negatived; clause passed.

Clauses 13 to 17 passed.

Clause 18.

Mr WILLIAMS: I move:

Page 17, lines 26 and 27—

Delete ',suspended or cancelled' and substitute:

or cancelled (but may be suspended by the Commission under this Act)

This amendment again gets to the crux of what this bill is about. This bill is ostensibly about modernising the regime under which we provide water services in this state. It is a water industry bill: it is not an SA Water bill. The government has been arguing that it wants to have a modern water industry and that is about having competition and market forces to ensure that we get—

The Hon. I.F. Evans interjecting:

Mr WILLIAMS: Yes, it certainly goes back to John Olsen and what we did when we corporatised SA Water. The government of the day told a lot of a lies about that; they said that we had sold it.

The Hon. I.F. Evans: No, the government of today.

Mr WILLIAMS: Yes. The opposition at the time told a lot of lies about that. They said that we had sold it, that we had sold the water. I can assure the committee that the Olsen government did not sell one tap, one pipe, one reservoir.

The Hon. I.F. Evans: That would be a question to ask the minister: who owns them?

Mr WILLIAMS: Who owns them?

The Hon. I.F. Evans: They were never sold.

Mr WILLIAMS: They were never sold. It was never the intention of that government to sell. But what that government did was to establish in South Australia a water industry, an industry which today exports out of South Australia in excess of $500 million worth of goods and services every year.

We have heard members of the government talk about the legacy of the Rann-led Labor government over the last 10 years. I do not think that it has got a patch on what was created in that eight-year period between 1993 and 2002 in South Australia. One of the really good things that that government did was actually to create a water industry in South Australia. This bill, the minister would have us believe, is about enhancing that good work that was done by the previous Liberal government.

This minister would have us believe that this is about incorporating market forces where previously we have had just this huge monopoly called SA Water. Notwithstanding the rhetoric that we hear, notwithstanding that we get from a Labor government this feeling that there has been a philosophical shift to the right, the reality is that SA Water is still going to continue as a protected species under the regime envisaged by this bill.

The bill talks about the requirement for a licence, but it also says, and I will read out subclause (3) of clause 18—Requirement for licence:

SA Water is entitled by the force of this section to hold a non-transferable licence under this Part appropriate to the services, operations or activities provided, carried on or undertaken by it from time to time.

So, everyone else that is going to be involved in this water industry has to run the gauntlet to get a licence, but SA Water gets theirs automatically. I can accept that because SA Water is in the industry. It has been there and it has been carrying out most of the functions, so I can accept that. Subclause (3) states:

In connection with the operation of subsection (2)—

That is, the automatic licence for SA Water—

(a) the Commission must issue SA Water with the appropriate licence or licences; and

(b) the Commission must comply with any requirements specified by the Minister as to the terms and conditions of a licence and rights conferred by the licence.

Not only does SA Water have to be given a licence, it has to be given a licence with all the terms and conditions as set down by the minister. That is why I suggest that SA Water seems to be continuing in its role as a protected species. Subclause (4) is a little stronger; it states:

The requirements of the Minister as to the conditions of the licence under subsection (3) must be consistent with the provisions of this act as to such conditions.

Well, that is fine. Then, subsection (5) states:

[But] to avoid any doubt, a licence under subsection (3)—

This is the licence which has to be given to SA Water—

cannot be transferred, suspended or cancelled.

One of those conditions under this act referred to in subsection (4) is under what circumstances you could suspend or cancel the licence to another entity. Everyone else in the water industry, everyone else in the water market, must have a licence. They must accept the conditions that the commission sets for them. SA Water does not: it automatically gets its licence. It gets the licence conditions that the minister says it should have. Irrespective of what it does, its licence cannot be transferred, suspended or cancelled.

I really struggle to understand how we can be assured that SA Water is going to continue to do what it should do if we have no powers to put any pressure on them, if we have no powers to suspend their licence. I am not asking to have power to transfer their licence and I am not suggesting that we have powers to cancel their licence. What I am suggesting is that, notwithstanding the protected species conditions that SA Water will enjoy over and above those enjoyed by other members of the water industry, at least the commission should have the power to suspend SA Water's licence. That, I think, would give a huge amount of comfort to our community.

The Hon. P. Caica: Do you reckon?

Mr WILLIAMS: Yes, that SA Water has to actually watch how it goes about its business. The minister scoffs, because the minister is going to say, 'Well, if SA Water's powers are suspended, the water is going to stop flowing out of the taps.' I do not think that is the case. If there is the power for the commission to suspend SA Water's licence, I think that would send a very strong message to the senior management in SA Water and the members of the board, because I do not think too many of them will survive if the licence was suspended.

I do not suspect that the water will stop flowing. I do not suspect that we are going to have death and famine across Adelaide because SA Water's licence was suspended for a short period of time. But it sends a very strong message to the people who are managing SA Water, including the board, that they have to take their role very seriously.

I would argue this: what is the point of demanding that somebody have a licence to perform a function and then saying, 'But this particular entity automatically gets their licence and that licence automatically has the conditions that they want on it,' because the minister gets to set the conditions, 'and, by the way, the commission that is administering this whole act is not allowed to put any pressure on them under their licence'? So why do they have a licence? It is nonsensical to give somebody a licence and there is no ability under that licence to say, 'You have to meet these conditions and, if you do not, we can, under very extreme circumstances, suspend your licence.'

So the opposition is proposing that we amend this, certainly not to give the commission the power to transfer or cancel the licence but to leave in there an ultimate power to suspend the licence of SA Water. I do not for a moment believe that that power will ever be used, but it sends a very strong message to the managers and board of SA Water that they have a very high level of responsibility and they have to meet it.

The Hon. P. CAICA: The government cannot support this amendment. Quite frankly, I think it is a preposterous amendment. SA Water, distinguished between other entities, is the primary water supplier in South Australia to 90 per cent of the state and its population, with a variety of water services. It has a government guarantee and a long history of providing bulk water supply services in South Australia.

SA Water's operations, of course, are the subject of additional scrutiny of the minister, the government and, indeed, this parliament. Consequently, SA Water's licence should not be suspended or cancelled, as the consequences, in my view and the government's view, would be absolutely ludicrous as the bulk supplier. People obviously need water; that is the bottom line. SA Water would still be subject to the same penalties as other water industry entities, but it is the primary water supplier to the South Australian population.

I think the member for MacKillop said, 'I am not talking about selling its licence or this, that and the other,' but he also mentioned about the board, by this clause, 'taking their job seriously', or 'taking their job more seriously'. I think that is an affront to the board and it probably shows how you feel about the SA Water Board and the way in which they run their operations. What I would say is that, by having SA Water's licence remain intact, it is actually not protecting SA Water per se, it is protecting the consumers and the users of the water—the 90 per cent of the population that are supplied by SA Water.

We are not going to support this amendment, and I make that very, very clear. With the greatest respect, I think it is preposterous and it will not achieve the key message of what the member for MacKillop is talking about, which is to make SA Water more accountable. It really is a bit of a nonsense. Of course, it is the prerogative of the opposition to deal with this in another place, but this government will certainly continue to oppose this amendment for all the proper and correct reasons.

Mr WILLIAMS: I think it is the minister who is actually creating a slight on the integrity of the board and the senior management of SA Water, that he does not believe that they are good enough to withstand having this power to suspend the licence in the act. He is the one who said, 'No, we are not going to give the commission that power because it puts at risk that they might get their licence suspended.' I am quite happy to have the power to suspend the licence in there because I have faith in the people of SA Water to get it right, but it leaves the reserve power there to make sure that that situation continues.

The other point I want to make is that, for most of the amendments that I have proposed that the minister is opposing, he has been referring to the national energy acts—the national gas and electricity law.

The Hon. P. Caica: Only twice.

Mr WILLIAMS: Yes, well, that's enough. The point I want to make is that, where there used to be a monopoly or a series of monopolies across the states, what we have created in the national gas law and the national electricity law is a competitive market. How have we done that? We have used legislation like this, we have put in place a regulatory regime, and then we have allowed other players to come in and compete within that market. That has driven real prices down.

The Hon. P. Caica: Has it?

Mr WILLIAMS: Yes, it has. It has driven real prices down. It is stupidity like covering the landscape with wind farms and carbon taxes that are driving prices up. We have created—

The Hon. I.F. Evans: We have covered the landscape with a carbon tax.

Mr WILLIAMS: Yes, we have covered the landscape with a carbon tax. It is the competition within those industries that has driven prices down. That is why I say that it is implied in this whole bill that that is what you want to do in the water industry, but you are singling out one operator and treating them completely differently. That is not what we did in the National Electricity Act and the National Gas Act.

What we have said in those acts is, 'We are going to create this situation where you can all compete on an equal footing. You can all have access to the infrastructure that is there and the distribution networks and you can compete as a retailer, you can compete as a generator—generating and selling the product (electricity in that case) into the system.' Here we are saying—well, I thought we were saying—'Let's replicate that for the water industry, so then we will get a myriad of entities coming in, competing and driving innovation, driving efficiency and, at the end of the day, driving service delivery to the customers, including driving the price down.'

That is what we should be trying to achieve here, minister. If we only give lip service to that, we are not going to achieve that outcome. If we say that we are going to replicate the national electricity act and the natural gas act, and build in the efficiencies that we have gained in those industries into the water industry, but then say, 'Sorry, we need to protect SA Water, we need to treat them differently,' you are going to get none of that competition. As a consequence, you are not going to get any of the efficiency that comes out of a competitive market in a natural way.

By treating SA Water as a completely protected species under this bill, you throw away all the things you are trying to achieve. You throw the whole lot away, and you end up just moving on, doing what we have always done, with SA Water maintaining its monopoly position in the marketplace and doing what it has always done. I do not think anybody, including yourself, accepts that SA Water is the most efficient deliverer of water supply and the most efficient deliverer of sewerage systems that we can have. I do not think anybody accepts that, because it is just not right. I am sure that we could do it a lot better, but we have had this monopolistic situation for so long that we have accepted some of the inefficiencies.

This is what this bill is about; it is about moving on from that, getting some real competition, some real innovation, and moving into the 21st century so that we can drive increased service delivery at lower prices to customers. If you want to continue to treat SA Water as a special case and a protected species, I think you throw the rest out of the window, minister. I implore you, at least between houses, to have another serious look at this. I think it is the crux to the outcome of what we are going to get out of this piece of legislation. It is sending a very strong signal to SA Water that its days as a protected species are coming to an end.

The Hon. P. CAICA: We are not going to support this. I will make a couple of points. The member for MacKillop made a point about what had occurred in the gas and electricity industry in regard to, in his words, forcing down the prices, putting competition into the marketplace, and a couple of other matters. I will just remind him at this stage that, as it relates to our continent, we do not have a national water market. However, if you really think that by including a clause that has the ability for SA Water's licences to be suspended it is actually going to be the precursor to implementing a new environment in which competition will thrive, I think that is an absolute nonsense; I said that previously.

We are not going to support that; it is not going to support competition. This government will continue to support competition. I do not know whether you have heard any of the speeches I have made around the place, but we are deadly serious about not only third-party access but also ensuring that we create an environment where we do have a competitive water industry that is made competitive through competition. We are committed to that. This clause is not going to do that, and it is preposterous for you to say that it is.

What we would be saying is what I have said before: SA Water is the primary water supplier to South Australia for 95 per cent of its population. It is already subject to additional scrutiny by the minister of the day—which one day might be you—the government and this parliament, that SA Water's licence should not be suspended or cancelled. Again, SA Water will still be subject to the same penalties as other water entities. I think the argument being run by the shadow spokesperson is illogical with respect to this particular clause. We will not be supporting it; we will be opposing it.

The Hon. I.F. EVANS: My question to the minister is: is it your argument that we do not need the amendments suggested by the member for MacKillop because SA Water is government-owned and, therefore, is subject to different scrutiny than the private providers will be under the regime you are bringing in?

The Hon. P. CAICA: I thank the honourable member for Davenport for his very, very considered question. What I am saying is yes, SA Water has a government guarantee. It has a long history of providing bulk water supplies. It will continue to do that in the future, notwithstanding the fact that SA Water, in my view, needs to expand its level of operations—and I have talked about this previously—in regard to, amongst other things, venturing into partnership arrangements that will in turn assist in the development of a marketplace here.

I agree with what the member for MacKillop said about a role that SA Water can have in a future marketplace. I have had an enormous amount of discussions with not only the board but others about that particular matter because it will continue to be a main player, and the main player, in the provision of potable water supplies in this state. In fact, in its own right, it will be a mechanism by which future competition and promotion of competition will occur.

What I would say in response to the member's question is that SA Water will continue in the future to be the government-owned entity, with the government having the responsibility of making sure, where there is market failure, that it will be the provider of secure, reliable potable water supplies and wastewater to the people of South Australia.

The Hon. I.F. EVANS: Just so I am clear, it gets a government guarantee because it is government-owned and different to the private providers; is that right?

The Hon. P. CAICA: Quite simply, as the member for MacKillop talked about earlier, this is not about protecting SA Water: it is about protecting—

The Hon. I.F. Evans: I didn't say that.

The Hon. P. CAICA: No. I am answering the question as I see fit.

The Hon. I.F. Evans interjecting:

The Hon. P. CAICA: Well, it is different from other providers in that it is government owned. Now, whether or not it will remain government owned into the future, in regard to what the position of the opposition might be in regard to SA Water—when, eventually, it regains office—I would certainly say that, from this government's perspective, as long as we are in government, we are going to ensure that SA Water remains in government's hands.

It will continue to be, as it is today, the primary water supplier throughout South Australia and to its population and, of course, where the marketplace is because, from time to time, the marketplace fails. Of course, it will be SA Water, through the government, or the government through SA Water, that can fill that breach when, in the future, a marketplace or a section of the marketplace will fail.

Mr WILLIAMS: I am now at a loss as to what this bill is about, minister. I thought it was about establishing a regime where we could see other players enter, but you have just told the committee that you see SA Water basically remain in its role as being at least the dominant player.

The Hon. P. Caica: Well, don't you think it will be? Don't you think it will be in the foreseeable future?

Mr WILLIAMS: Well, the reality is that we are not going to see any of the benefits that should flow from marketplace competition, that we have seen in other industries. The minister keeps talking about market failure and the importance of retaining these special powers for special provisions to protect SA Water, to protect us against market failure.

Water is not the only essential service. It is not the only essential commodity that we need to sustain our lifestyle in South Australia. There are a whole range of them. I have always argued that food is probably just as important as water. We do not have a regulatory system which manages our food supply, yet food is always there. I have yet to go down the street to the local supermarket and see the shelves bare, but we have no regulatory system to make sure that the shelves are stocked every day. We have been through this exact thing with our electricity. The lights just do not go out.

Minister, can you point to point to what could be described as an essential service—I would rather term it 'a very important service'—where we see that market failure of a very important service, or the delivery of a very important commodity for the sustenance of life or our lifestyle, has occurred? It just does not happen.

The Hon. P. CAICA: I thank the honourable member for his question. We are going to oppose this clause, because it will not achieve what the member for MacKillop says will be achieved by accepting this amendment. Quite simply, ESCOSA in its own right as part of the independent regulator is going to be one of the mechanisms that will promote competition. You are starting to remind me of Grandpa Simpson. I don't know whether or not you have watched The Simpsons, but what I am saying is—

Mr Pederick: You can't buy Duff beer.

The Hon. P. CAICA: Well you could, but they took it off the market. What I would say, Mitch, is that I still can't—

The ACTING CHAIR (Mr Piccolo): Member for MacKillop.

The Hon. P. CAICA: The member for MacKillop; thank you for very much, Mr Acting Chair, for correcting me. I cannot see the sense in it, Mitch—I mean, member for MacKillop. You are going to have to work harder on me beyond what you have said today in here for me to think of any reasonable purpose for subjecting SA Water to a suspension or cancellation.

Mr Williams: I'm not suggesting a cancellation, just suspension.

The Hon. P. CAICA: Notwithstanding that, I cannot see any benefit that is going to accrue through this. Yes, I would continue to say that we want a vibrant and competitive water market into the future, and I will say, if you do not believe that SA Water will continue to be one, because it will be a prominent player and, as a state-owned entity, I want it to be a prominent player in a competitive marketplace, and I want to be part of a process that drives that competitive marketplace, but that is not going to occur through supporting this amendment.

I oppose this for the reasons I have mentioned. I do not think that we need to go on any further with this clause. Without being disrespectful, I look forward to a more logical argument when it gets to the upper house as to the importance of this particular clause.

Amendment negatived.

Mr WILLIAMS: I move:

Page 17, after line 27—Insert:

(6) In connection with the operation of this section—

(a) the Minister must establish a set of community service obligations that require SA Water to continue to provide services within those areas of the State in which services are provided immediately before the commencement of subsection (2) unless the Minister grants an approval for the discontinuance of any such service; and

(b) if the Minister grants an approval under paragraph (a), the Minister must immediately prepare a report in relation to the matter and cause copies of the report to be laid before both Houses of Parliament within 6 sitting days after the approval is given.

I have been asked by the member for Stuart to address the issue that, as the minister pointed out earlier in the debate, there are a number of communities in the far north which rely on a water supply from SA Water and, in a lot of cases, it is a non-potable water supply. It is essential to those communities, and this simply obliges SA Water to continue to provide the community service obligations in those communities: to provide water to the communities to which it currently provides. It gives the opportunity for SA Water to cease those supplies if the minister of the day grants approval.

It basically says that SA water is obliged, and the minister has just made the case that he wants to see SA Water continue to do what it does, and in this instance I agree with him. This would just put it into the legislation that, if SA Water wished to cease its operations in any of those particularly far-flung and isolated communities, it would basically need the approval of the minister of the day. In addition, the minister would have to table a report on that in the parliament.

The Hon. P. CAICA: I am not opposed to the sentiments expressed by the member for MacKillop, but I can only assume that this clause has been moved on the basis that, under a fully competitive marketplace, the market might fail in these areas to be able to provide water to these areas. I do share the view of the member for MacKillop that there should be safeguards in place to ensure continuity of supply for existing consumers and I, for the life of me, cannot even see under a competitive situation in the marketplace where some of the entrants into that marketplace will necessarily be supplying water in some of the areas that SA Water do.

The principle and the sentiment in this proposed amendment seem to be okay; however, the way it is expressed and where it is suggested to be placed in the bill from the government's perspective does not seem quite right; therefore, we are prepared to further consider this amendment. The government is not going to support it at this time but, having said that about the wording and where it might sit within the bill, we are happy to have a look at that between now and another place.

Amendment negatived; clause passed.

Clauses 19 to 23 passed.

Clause 24.

Mr WILLIAMS: I move:

Page 19, line 32—

After 'prescribed costs' insert:

after taking into account advice contained in a written report furnished to the Treasurer by the Commission for the purposes of this subsection.

I have some questions on the clause as it stands, in the first instance. This is about the fees charged for the holding of a water licence. I think again that this is a fairly important part of the bill. First of all, minister, subclause (3) on the annual licence fee for a licence is the fee fixed from time to time by the Treasurer in respect of that licence. That is an amount that the Treasurer considers to be a reasonable contribution towards prescribed costs. It goes on to give a definition of prescribed costs.

I will use the terminology that is used under those other acts that we keep talking about, the Gas Act and the Electricity Act. The annual licence fee would be treated as a pass through cost—that is, whatever the licence is that ESCOSA is considering in its price setting mechanism (what price it might set for water), the licence fee would form part of the information that ESCOSA would use and apply. In fact, if the licence fee went up by a certain amount, that certain amount would automatically be passed through into the revenues via a price adjustment.

The Hon. P. CAICA: I thank the honourable member for his question. This particular clause is about licence fees and returns and, as I understand it, a person is not entitled to the issue or renewal of a licence unless the person first pays the commissioner the annual licence fee or the first instalment thereof. Application fees will be fixed by the Treasurer in the amount appropriate to meet the reasonable costs of economic regulation in the industry.

The licence fee revenue will not be applied to general revenue. Revenue from fees can only be used to cover costs associated with administering the Essential Services Commission Act (so there is the relationship); developing policies relating to the water industry—which is what we want, we want a marketplace but we think that marketplace ought to be underpinned by a policy developed by government—policies that ultimately will be enshrined by this particular parliament; and then other costs that are prescribed by regulation. I hope that answered the question; if not, I will have another crack at it.

Mr WILLIAMS: No, it did not and I will give you an opportunity to have another crack. There are a number of things under the national gas act and the national electricity act that we call pass-through events. If a certain thing happens such as a licence fee increase, the value of that increase is passed straight through, pretty well automatically, by ESCOSA or the regulator in that case, onto the prices charged.

I will give you an example, minister: in the feed-in tariff scheme there are costs associated with that with regard to electricity, because ETSA collects the money and passes it through to the retailers. There are costs associated with this and that is passed directly through, the money that ETSA is obliged to pass through is at a cost to them, and it gets automatically put on to the price that consumers pay for electricity. That is what we call a pass-through event and it is managed by the regulator. I am assuming that the licence fees will be treated in the same way, and that is my question. Again, there are questions on the prescribed costs which is defined in sub-para 7 including:

The cost of administration of the act, the cost of the administration of the Essential Services Commission Act relating to the water industry, any costs associated with the development by the state government of policies relating to the water industry and other costs prescribed by regulation.

It seems to me that this will give the government of the day the power to impose licence fees on water entities—pretty well to run the department of water because the department of water will be administering the act, and the department of water will be developing policies relating to the water industry. That is a pretty broad range of costs that can be attributed and will need to be covered by the licensing. Again, minister, there is one of my favourites 'other costs prescribed by regulation'. We can attribute a whole heap of costs to be picked up by licence fees, simply by regulation at some time in the future.

Minister, first of all to my earlier question about the pass-through event, but also how much do you envisage raising from these licences? Are we talking $100,000? Are we talking $1 million? Are we talking $10 million? Are we talking $50 million? The costs associated with the development by the state government of policies relating to the water industry could run to tens of millions of dollars. The cost of administering this act will not be insubstantial.

Can I say, minister, that this is one of the reasons why I argued—and I can assure you that we will be making this case very strongly in the other place—those local councils that are harvesting stormwater (and what you and your government have treated as a liability for years) and turning it into an asset do not want to be part of this regime. It seems to me that you are going to strap millions of dollars of licence fees on the likes of the Salisbury council and the good work that has been done by Colin Pitman and his staff out there.

You are going to use this clause (clause 24) and this licensing regime to keep those councils and the good work they have done under control. This is a very important clause, and I think that, minister, you need to give the committee a full indication of exactly what you will be doing with regard to licence fees. I think that the committee needs to know of what order will be the money that you will be raising and exactly what purpose you will be putting that to.

The Hon. P. CAICA: Unlike the member for MacKillop, at the very least, I am more confused now than I ever was, but I am struggling with some of the assertions that have been made by him.

Mr Williams interjecting:

The Hon. P. CAICA: Look, quite simply, the licensing fees, which are caught up within clause 24 and which are the subject of this amendment, will be a legitimate cost attributed to the operations of that licence under the act. The question, I think, was about a pass-through concept, was it—pass-through costs? My understanding is that it will be similar to what happens within the gas and electricity industry. Certainly, different levels of licensing will occur depending on the type of entity.

Mr Williams interjecting:

The Hon. P. CAICA: It is impossible for me to say what that will be but, if we go through other entities that exist (given your wont to compare to gas and electricity and my wont to do the same earlier in the piece), I would assume that, as a rule of thumb, the larger entities will pay a larger amount for their licence, but it is impossible for me to say at this point what level of cost will be attributed and collected through this licensing regime.

It provides for the facility to be able to charge a cost against the issuing of a licence in the manner and the purposes for which I described earlier and about which you said did not really answer the question in the first instance. I think that we are back to where we started, and I certainly hope that I have answered it.

Mr WILLIAMS: I will not say that I am surprised, but I am certainly disappointed. Here we have the government proposing a new fee. We have a new bill, a new regime and a licensing regime, which we do not currently have for water entities, and we are going to pick up a whole range of businesses. We have set this huge definition to capture a whole range of businesses. A lot of them, as I have pointed out, have been established by local councils which have had the task to manage stormwater and which have turned what has been a task to control what has always been regarded as a liability (that is, managing stormwater) and turn that into an asset.

And, as soon as the government sees that some councils out there have done some really innovative work over recent years (much, much more innovative than the government has been over recent years when we have had pressure on our water supply systems; these councils have done some fantastic work), what has the government done? What is the government proposing to do now? The government is saying, 'Hang on; these people are out there doing something which we were totally incapable of doing. They have turned a liability into an asset.' What is the government's response to that? 'How can we tax it? How can we get some money out of them?'

These local councils, with very little support from their state government, have created a successful business venture, and the government, for no sound reason, wants to licence them and regulate them and make out that it is an essential service and therefore it needs to be regulated simply so they can then impose a licence fee on them and rake off millions of dollars, if not tens of millions of dollars, to cover the cost of running the department—'to cover the costs associated with the development by the state government of policies relating to the water industry'.

The water industry consists of these local councils and their stormwater harvesting schemes, largely—outside of SA Water—who have had no assistance from this state government. They have had no assistance in policy development and have been out there doing the hard yards by themselves. Now this government wants to impose a licensing regime on them simply so that they can then charge them an exorbitant licence fee to rake off millions of dollars from local councils and the good work they have done to cover the cost of running the Department for Water. That is what this is about.

I asked the minister a few moments ago if he can indicate to the committee whether we are talking about tens of thousands of dollars, or hundreds of thousands of dollars, or tens of millions. The response I got from the minister was, 'I can't at this stage answer that question.' I simply do not believe that response. I simply do not believe that the minister has come into this place and has no understanding of how much money his government expects to raise from this measure. I simply do not believe it.

If that is the case, I suggest, minister, you take away the bill and go and do a lot more work, because I do not think it is fair of you to come into this parliament and ask this parliament to pass a bill which is establishing a new tax regime—because that is what this is. It is called a licence fee, but it is raising taxes from the community via our local councils who have been innovative, to put tens of millions of dollars into the running of the minister's department. Minister, I think you need to make the case for what you have done and what your government has done to help the likes of Colin Pitman and the Salisbury council and the work they have been doing out there.

They have done the hard yards for 20 years out there and created a business opportunity. They have created a market, with little or no help from your government, and now all you want to do is have the parliament believe that they need to be regulated. You want to have the parliament believe that they should be licensed to do that. Colin Pitman and the Salisbury council have been doing it for 20 years and suddenly you say they need to be licensed. We get to this clause, and this is why they need to be licensed: so that you can charge them a licence fee to cover the cost of running your department.

Minister, if you could make the argument that these councils only achieved this business opportunity because of something that your government and department did, it might be a reasonable thing to ask, but the reality is that you and your government have done nothing. You have done nothing. These councils have been out there and done it themselves and they do not need to be licensed, and they certainly do not need to contribute tens of—

The Hon. P. Caica interjecting:

Mr WILLIAMS: I gave you the opportunity a moment ago, minister, to give the committee an indication. Are we talking tens of thousands of dollars or tens of millions of dollars? And your response was, 'I can't answer that question.'

The ACTING CHAIR (Mr Piccolo): Member for MacKillop, you do not have an amendment on the floor at the moment, so unless you put one forward we will move to the next item.

Mr WILLIAMS: I have—

The ACTING CHAIR (Mr Piccolo): No, you have asked questions. You have not moved the amendment yet.

Mr WILLIAMS: No, and I don't have to move an amendment if I don't want to.

The ACTING CHAIR (Mr Piccolo): You don't want to move it?

Mr WILLIAMS: I am going to move the amendment. But, Mr Chairman—

The ACTING CHAIR (Mr Piccolo): You have had your three questions.

Mr WILLIAMS: I am still on my feet, Mr Chairman, and I can speak for up to 15 minutes if I so choose. That is in the standing orders.

Members interjecting:

Mr WILLIAMS: I don't think so.

Ms Thompson interjecting:

The ACTING CHAIR (Mr Piccolo): Member for Reynell, I am quite capable, thank you.

Mr WILLIAMS: I am sorry, Mr Chairman. The member for Reynell has been here for as long as I have and I thought she would have realised that, in committee, any member can speak for up to 15 minutes on each of those three occasions. I thought the member for Reynell may have known. I have put to the minister a very simple question: how much money does he expect to raise from this licensing regime, and he has chosen not to give me an answer to that, but that question remains and the minister might choose to answer it. In the meantime, I move my amendment (No. 14):

Page 19, line 32—After 'prescribed costs' insert:

after taking into account advice contained in a written report furnished to the Treasurer by the Commission for the purposes of this subsection.

This inserts in line 32—

The Hon. P. Caica: Is this one of those amendments that was given to you by someone else that you were taking further instructions on last night?

Mr WILLIAMS: It is all right minister.

The Hon. P. Caica: You are the one that is politicising it.

Mr WILLIAMS: Minister, if you could answer my questions it would make life a lot easier for all of us. With regard to the annual licence fee, subclause (3) says:

The annual licence fee for a licence is the fee fixed from time to time by the Treasurer in respect of that licence as an amount that the Treasurer considers to be a reasonable contribution towards prescribed costs.

I am proposing that, after the end of what I have just quoted from the bill, we insert the further words which state:

after taking into account advice contained in a written report furnished to the Treasurer by the Commission for the purposes of this subsection.

I do not believe that the Treasurer and/or Treasury department necessarily have the expertise to make an assessment that this particular clause calls for them to do. I think the commission could provide some expert advice to the Treasurer in a report, to make a considered determination.

The Hon. P. CAICA: I am very disappointed that the member for MacKillop has decided to politicise this, at clause 14 or 15. As I said, I cannot give an accurate answer as to what fees would be collected. Of course, what we want is a market place to be created. We want more people to be attracted to the marketplace and we want the ability to issue more licences. I think we are at one that, but it has been politicised.

What I would say is that we are going to support amendment No. 14 put forward by the opposition and we do not think there is a problem with that. Where there is a problem is the fact that the member for MacKillop deviated from what ought to have been a proper contribution to politicise, in this instance, something that—if he had bothered to take the time—we were going to support without that politicisation. We still continue to support it despite that politicisation.

Amendment carried.


[Sitting extended beyond 18:00 on motion of Hon. P. Caica]


Mr WILLIAMS: I move:

Page 19, after line 32—Insert:

(3a) The Treasurer must, within 3 sitting days after the receipt of a report under subsection (3), cause copies of the report to be laid before both Houses of Parliament.

I am assuming that, having supporting my previous amendment, the government is going to support this. You are not going to support this one?

The Hon. P. CAICA: No, and I will explain why—

Mr WILLIAMS: In that case, I will explain the amendment. Having had the government just accept the previous amendment, that the Treasurer would fix the annual licence fee after taking into account advice contained in a written report furnished to the Treasurer by the commission for the purpose of this subsection, I am now moving to insert a new subclause (3a) which provides:

The Treasurer must, within 3 sitting days after the receipt of a report under subsection (3)—

which I have just referred to—

cause copies of the report to be laid before both Houses of Parliament.

Again, we still find ourselves in this situation where I did not ask the minister to give me a precise breakdown of what everybody's licence fee was going to be. From recollection, my question was about how much the minister expects to raise through this licensing regime. The minister must have some idea what the cost of administration of this act is likely to be. He must have taken some advice and have some idea of what the cost to the Essential Services Commission might be in the roles that it is going to have under this act.

He surely has some idea of what the costs associated with the development by the state government of policies relating to the water industry might be. I am absolutely amazed if he does not have some idea, and when I say 'some idea' I was asking a ballpark question. Are we talking tens of thousands of dollars, are we talking hundred of thousands of dollars, are we talking millions of dollars, tens of millions of dollars? That is what I asked. I did not want a breakdown, such as 'So-and-so's licence fee is going to be this much.' I just want to know: is it envisaged that the licensing regime is going to raise $1 million, $20 million, $50 million?

The minister is asking the parliament to give him powers to raise this money, and he is not giving us any indication whatsoever of what the amount of money might be. That is why—

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: It is not my fault, Tom. It is not my fault.

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: What they are doing over there is not my fault.

The Hon. A. Koutsantonis: Really?

Mr WILLIAMS: No. That is why I am proposing that the report that the Treasurer gets actually is published. I think that is a part of a very, very low level of accountability. The Treasurer gets a report which gives him advice about what some of these costs are going to be, gives him some advice about where he should set the licensing—

Members interjecting:

The ACTING CHAIR (Mr Piccolo): Excuse me, I just cannot hear you speak. Can people who want to talk either take their seats or go out of the chamber.

Mr WILLIAMS: I can speak up, Mr Chair.

The ACTING CHAIR (Mr Piccolo): No, I do not need you to speak up; the other people can shut up. Member for MacKillop, continue.

Mr WILLIAMS: I am glad that the government has accepted my amendment that the Treasurer does get and takes into consideration a report from the commissioner. Having accepted that, I was hoping that the government would also accept that it was fair and reasonable that that report be published and made available for the general public to have an understanding because, at the end of the day, they are paying for it.

The minister has established that there is going to be a flowthrough event. It will go on their water bills. They will be paying for it, and I think they have every right to have an understanding of why the Treasurer sets the fee.

The Hon. P. CAICA: Mr Chair, there is a lot of confusion going on here at the moment, and that is not a reflection on the way in which you are chairing this committee.

The ACTING CHAIR (Mr Piccolo): But you will mention it anyway.

The Hon. P. CAICA: I am talking about others who are seeming to take over the floor and—

The ACTING CHAIR (Mr Piccolo): Minister, can you just address the comments, please?

The Hon. P. CAICA: Beg your pardon?

The ACTING CHAIR (Mr Piccolo): Can you just address the comments by the member for MacKillop?

The Hon. P. CAICA: Yes, I am. It is just that I am having a bit of difficulty concentrating, that was all. I will get right back to it, and I thank you for that advice. I think the member for MacKillop has revisited the clause that we had already supported, yet again, to ask the same question that he asked before. I cannot be definitive on what will be the individual licence. I am presuming that the biggest player in the scheme of things will be SA Water but, again, I cannot do that.

I know that the member for MacKillop does a forensic analysis of everything that he does within parliament, so he would be aware that the forward estimates within the budget papers last year gave ballpark figures, as I understood them to be, and they already exist. The Department for Water would be around $250,000, ESCOSA would be around $1.5 million, and Department of Treasury and Finance about $200,000—again, ballpark figures in the context of forward estimates.

Again I say I cannot be definitive, and I do not expect that you are going to get up here and bang the table and say, 'I want to know,' because what you clearly did before was try to politicise this, when this information was already available and you could have been aware of it anyway.

Mr WILLIAMS: I thank the minister for most of his answer. In all fairness, I do not think I can be accused of politicising something when I come in here and ask how much the minister expects to raise through a new impost on the people of South Australia—

The Hon. P. Caica: Read your speech.

Mr WILLIAMS: Yes, I asked you—

The Hon. P. Caica interjecting:

The ACTING CHAIR (Mr Piccolo): Minister, thank you. You can be accused; whether it is true or not is a different question, but you can be accused.

Mr WILLIAMS: Yes, but I do not accept the premise of the minister's statement that I was politicising it. I think it is a very genuine position for any member of this place to ask a question about a new impost which is going to be put onto the people of this state. I think I would be derelict in my duty if I did not ask that question, just as I thought the minister would have been derelict in his duty if he did not answer it.

So, minister, I take it that the numbers you just gave—and I will have to get them out of the Hansard, but we are talking a couple of million dollars in total revenue from this licensing regime. I thank the minister for clarifying that matter.

The Hon. P. CAICA: With respect, and I will take your advice here, but has the member for MacKillop moved amendment 15?

The ACTING CHAIR (Mr Piccolo): We are about to vote on it.

The Hon. P. CAICA: Given the fact that he has made some more comments, I will indicate that we are not going to support this particular amendment, because the timeline for tabling the report within three days of receiving it, as he has inserted there, on occasion does not allow—and you will realise this when you become a cabinet minister, and one day you might even be treasurer—for cabinet and other processes to be undertaken.

The Treasurer might receive the report, and—as you will realise yourself when you are in cabinet—there are things that will need to be brought to cabinet and will, quite rightly, want to be considered by cabinet. What we are saying is that, in our view, 12 sitting days is more reasonable and in line with similar requirements across other legislation. So for that reason we will not be supporting this amendment in its current form.

Amendment negatived; clause as amended passed.

Clause 25.

Mr WILLIAMS: I move:

Page 21, after line 29—Insert:

and

(q) requiring the water industry entity to deliver water to any primary producer for purposes associated with livestock production in the circumstances prescribed by subsection (7)(a) at a price determined by the Commission after taking into account the requirements prescribed by subsection (7)(b).

This inserts a new licensing—

Members interjecting:

The ACTING CHAIR (Mr Piccolo): Excuse me, member for MacKillop, can your colleagues perhaps quieten down because I cannot hear you speak? If they don't show respect for you, at least I will.

Mr WILLIAMS: Thank you, Mr Acting Chairman. This inserts a new paragraph (q) under licensing conditions. I talked about this extensively in the second reading debate. There is a consequential amendment (No. 2) which we have deferred until after consideration of this amendment. I will read the amendment, which is a licensing condition:

requiring the water industry entity to deliver water to any primary producer for purposes associated with livestock production in the circumstances prescribed by subsection (7)(a) at a price determined by the Commission after taking into account the requirements prescribed by subsection (7)(b).

There will be a new subsection (7) later. This consequential to amendment No. 19.

The ACTING CHAIR (Mr Piccolo): Is 19 consequential to 16 or 16 consequential to 19?

Mr WILLIAMS: Six of one, half a dozen of the other.

The Hon. P. Caica interjecting:

Mr WILLIAMS: Yes, I have just mentioned that. There were a number of amendments—

The ACTING CHAIR (Mr Piccolo): I am aware of that.

Mr WILLIAMS: I think if we make a decision on this one, minister, it will indicate whether or not the government is going to support the scheme that I am proposing, and it might help us get through the others more quickly.

What the opposition is proposing—and I talked about this in my second reading—is that a lot of farmers in South Australia rely on River Murray water delivered through the pipe network that is throughout rural South Australia, not just for their domestic water supply but probably more particularly in most instances for stock water.

We have a pipeline which runs into my electorate from Tailem Bend all the way to Keith, there is a branch off of that that runs out to Meningie, so it covers all of that region down along the Dukes Highway. Most of the livestock in that area—and there is a significant amount of livestock in that area—rely on that pipeline to deliver water for drinking purposes. We have the same thing right through the Lower North, Mid North, Upper North, all of Yorke Peninsula, and now all of the Eyre Peninsula is connected to the River Murray, too.

We are getting a lot of inquiries from constituents in those areas right across rural South Australia about the cost of water and where it has gone in the last few years under this government. The minister was unable to answer a question this week in question time about the fact that, by 1 June next year, the cost of water will have trebled under this government, and that is creating an almost impossible situation for farmers to run livestock.

The reality is that I have constituents in my electorate who are now paying well in excess of $100,000 a year just to provide water for their livestock, and that is impacting on the viability of their producing livestock. This is a very serious matter. It could have very serious implications for a large part of the state's economy. We have been hearing a bit of nonsense about how the state's economy has been diversified.

Still in South Australia some very significant contributors to the state's economy are the livestock industries. The sheep industry provides wool, which is still a significant industry, and sheep meat; then, obviously, the beef industry provides quite a bit into the state's economy. They are quite significant contributors. We run the risk of destroying those industries in large parts of the state if we continue to impose these water costs and water cost increases on livestock water. What I have endeavoured to do here is to provide a completely different product to overcome this problem. The product would be a delivery service. I seek leave to continue my remarks.

Progress reported; committee to sit again.

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