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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 20 October 2011.)

Clause 25.

The ACTING CHAIR (Ms Thompson): I understand that we are at clause 25, and we have dealt with amendment No. 15. Member for MacKillop, I understand that—and correct me if this understanding is not in accordance with your recollection—you were about to move amendment No. 16, which relates to clause 25?

Mr WILLIAMS: Indeed, Madam Acting Chair. I had in fact moved it. I was speaking to it and I sought leave to continue my remarks. I am now ready to continue my remarks. With the indulgence of the committee, I think that I will just recap a little on those remarks just to remind members what amendment No. 16 is all about. The amendment seeks to insert a new paragraph (q) under clause 25(1)—Licensing conditions. New paragraph (q) provides:

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).

As I was saying, we have found ourselves with rapidly escalating water prices in South Australia, and probably the majority of farmers across the state who rely on reticulated water—not just for domestic purposes but also for livestock water—are finding that it is becoming unviable to run livestock.

For the benefit of members of the house who are not intimately familiar with rural South Australia, there is a pipeline that extends from the River Murray to the east as far as Keith in the north of my electorate which services all those communities down along the Dukes Highway, with branch lines coming off that pipeline. There is a major branch that goes down to Meningie on Lake Albert. We have more recently put pipelines across the Narrung Peninsula between Lake Albert and the Coorong to reticulate water specifically in that area because the Lake Albert waters have not recovered from the drought and they are still far too saline to be used even for stock drinking water, let alone irrigation. That particular area of the state is still suffering as though the drought were continuing.

Then we have all the communities along the river and pipelines running off the river all the way from Renmark and the north all the way down the length of the river. We have pipelines delivering water pretty well from Meningie and Keith in the east all through the northern Mallee and then on the western side of the river through the Strathalbyn area right down to Goolwa, across the ranges and all of the Mid North, Upper North, Yorke Peninsula and right across Eyre Peninsula.

Mr Venning: And the Barossa.

Mr WILLIAMS: The member for Schubert says, 'And the Barossa.' I am sorry I missed out on the Barossa. Basically, all of rural South Australia, apart from Kangaroo Island, a few parts of the Fleurieu Peninsula and the Mid and Lower South-East, are serviced by—congratulations on your appointment by the house, Mr Chairman of Committees.

The CHAIR: Thank you.

Mr WILLIAMS: It was a hard-fought battle. I thought we were going to get Atko; but we are very happy.

Members interjecting:

Mr WILLIAMS: It is difficult when I am so overjoyed. I can barely contain myself. I was just saying that the vast majority of the farmlands in the settled areas of South Australia are serviced by reticulated water supply operated by SA Water and that provides stock drinking water to probably the vast majority of the livestock in South Australia. The reality is it is becoming unviable to continue to pay those prices. I said when we were last speaking on this matter on 20 October that I have constituents who are spending over $100,000 a year on water for livestock. One constituent contacted me quite recently and they were over $140,000. They are saying that there is no profitability left in running beef cattle.

It is not just the livestock producers who are being severely impacted by this. If this continues, if we do not find some remedy to lower the cost of water for livestock production, we will lose an industry. We will lose several industries. We are talking about both sheep and cattle. Some minor animals are also involved no doubt to a lesser extent, but principally sheep and cattle industries provide wool and meat, and we have a significant meat processing industry in South Australia as well. I was at the Advantage SA awards dinner a few nights ago and T&R Pastoral received an award.

Mr Pederick: Hear! Hear!

Mr WILLIAMS: T&R Pastoral is in my colleague the member for Hammond's electorate at Murray Bridge; a major abattoir, handling both sheep and cattle, employing—

Mr Pederick: Fifteen hundred people.

Mr WILLIAMS: That business employs 1,500 people. If no livestock are run on the farms across South Australia that business cannot survive. In my electorate I have Teys Brothers beef abattoir at Naracoorte, which employs 350 to 400 people, and Tatiara Meat Company at Bordertown, a lamb meatworks where another almost 500 people are employed. We are talking significant employment which could be impacted if we cannot do something to reduce the cost of water for livestock.

That is what this amendment is about. It is about providing a separate product. It is a separate product, and the product this would oblige SA Water to provide to the farming community is that of a transport operator.

The scheme that I have devised, of which this clause is an integral part, is that SA Water would be obliged to transport water for livestock operators who actually own the water themselves. So, they would have to go into the water market on the River Murray, either as a temporary trader or by buying a permanent water allocation, and have SA Water deliver that water through the existing infrastructure to their properties.

The only difference would be the way that the billing would occur, because they would be delivering water already owned by the producer rather than water that was owned through a licence of SA Water. SA Water would just provide the transport of that water. It would not require any more water to be transported. SA Water is already delivering water for these livestock producers; that would not change. It is just the ownership of the water that would change. Thereby, we could offer a different product to these livestock producers and, thereby, we could reduce costs.

Since October 20, when I was last talking to this particular amendment, I have had another conversation with a country community, or certainly the secretary of the local football club in the country community, who are having a similar problem watering their football/cricket oval. It is at Crystal Brook, in the member for Schubert's electorate.

Mr Venning: Frome actually.

Mr WILLIAMS: It is in Frome? Sorry.

Mr Venning: Crystal Brook is where I live though.

Mr WILLIAMS: Yes. Sorry, the member for Schubert lives at Crystal Brook.

The Hon. P. Caica interjecting:

Mr WILLIAMS: Because they moved it. In the member for Frome's electorate, the council has been doing the right thing for the football/cricket club there and paying, I think, half of their account or something, but their account now is over—or they expect it to be over—$30,000 a year just to keep their football/cricket oval watered. That is, again, untenable for a country community.

I suggested to this person in a conversation that I had that we may be able to apply a similar sort of process to them. Although at the moment this amendment is only talking about water for livestock, I am of a mind that, when the bill gets to the other house, we might change that and also incorporate public playing areas, sporting clubs or ovals, however we decide we might refer to them.

This is something which I think is vital to underpin a major industry in South Australia, that is, our livestock industry. I have thought on this for a fair bit of time. I cannot think of any other way that the parliament can help these people, other than to provide this transport service.

It is contemplated by the bill that SA Water will move towards third-party access—and I am a little bit disturbed about the time frame involved in getting to third-party access. This, I think, is much more urgent than the time frame that is spelt out in this bill; that is why I have brought this forward as a series of amendments to allow this to happen. I sincerely hope that the government sees the good sense in this measure and supports these amendments.

The CHAIR: Minister.

The Hon. P. CAICA: Thank you very much, Mr Chair. May I too congratulate you on your ascent to the glorious position of Chairman of Committees. Well done. We are also dealing with amendment No. 2, as the member for MacKillop would remember. So, we are actually dealing with amendments 16 and 19 as one, which we referred to the committee when we last met. Amendment 16 concerns water for livestock production and, as I said, needs to be considered alongside amendments 19 and 2.

The government does understand the issues that have been raised by the member for MacKillop and the issues that have given rise to these amendments. I have met with the people to whom the member for MacKillop has referred but, in addition to that, I have also met with grape growers who find themselves in a similar situation. However, we do not believe this is the most appropriate way to deal with them.

First, these amendments would provide a significant subsidy to livestock producers at the cost of increasing prices to all other consumers. The scheme seeks to limit the delivery price to 50 per cent of the prevailing commercial water price in metropolitan Adelaide. There would also be no contribution—and I say no contribution—from livestock producers to the fixed costs or any other variable costs associated with constructing, maintaining and managing the water supply network.

Furthermore, while the amendments envisage livestock producers paying for their own River Murray water on delivery, the producers would remain connected to SA Water's infrastructure. This means that SA Water will still be required to secure sufficient water supplies to provide security for all customers, but the cost of providing that security would not be worn by those livestock producers who took advantage of that particular access scheme. It is certainly the government's view that this is hardly a fair arrangement.

To put some numbers around these amendments, SA Water has undertaken calculations around the associated costs in relation to the top 500 country land customers who use approximately 5 gigalitres per annum. I am told that, if these users purchased their own water and had it delivered under the proposed scheme, there would be an estimated revenue shortfall of between $16 million and $17 million per annum from 2012-13. Unless that was separately funded from the state budget, I am told the cost of the proposed scheme would require an additional impost of $22 on every other water user's bill—primarily the bills of residential users. Again, in the government's view, this is unfair.

Of course, it conflicts with the National Water Initiative pricing principles and goes against the intent of the legislation. I do not need to remind the house of the National Water Initiative pricing principles because we have discussed them on numerous occasions. Such a scheme would also be costly to administer, which would further drive up prices for other consumers. The government does not believe it is appropriate to provide preferential treatment to one part of the industry at the expense of others.

I did note with interest that the member for MacKillop did talk about perhaps revisiting this in the passage between houses, perhaps to include community parks and gardens—for example, the oval that he spoke about in the member for Frome's area. I presume then he might also look at grape growers as well. I ask where it might end with respect to the subsidies that the member for MacKillop says ought to be put in place as a consequence of this particular amendment. We do not believe it is appropriate to provide preferential treatment to one part of industry at the expense of others, and 'the expense of others' in this instance means residential customers.

Crucially, the capping of prices proposed under these amendments would also impede—and this is a very important point—competition by eroding the financial incentive to provide alternative and innovative solutions for these livestock producers. I would not be surprised if, as we speak (because I know it is happening and that preliminary discussions are occurring) market players are looking at ways by which they can access water—which of course is still available to be transported along the existing infrastructure owned by SA Water—to ensure that water could be delivered to what would then in turn be their customers for primary production or any other purpose for which that more competitively priced water would be available to them.

So, as we speak, I know that there are innovative companies in the marketplace looking at how they might deliver alternative supplies to not only livestock producers but also the other primary producers that I have just briefly spoken about. It really is this type of competition that this bill seeks to encourage. In fact, it is exactly this type of competition that I understand the member for MacKillop, in his remarks made to date, was actually wanting to encourage as well. This is the type of competition this bill seeks to encourage. The proposed amendments would have, I think, a chilling effect on this sort of competition at the expense of other water customers. As I said, it is my view that it would be very short-sighted.

Finally, I do note that the member for MacKillop is keen to give ESCOSA an additional role through these amendments but is not prepared to give it complete independence. This is a point that he levelled at the government earlier with respect to ESCOSA and the level of independence he believes that it might not have because of some government direction through the pricing order, but he is quite happy to include this within that. It also seems to contradict the member for MacKillop's professed desire to give ESCOSA more independence when it comes to setting water prices.

Accordingly, I believe the best course of action is to oppose these amendments. The government has made its intentions crystal clear on the need to develop a third-party access scheme that treats all water industry entities and all industrial and residential customers fairly. In the meantime, I note that charges for delivery of water to primary producers who obtained a River Murray water licence would be covered by the commonwealth Water Act 2007.

I also note that, as minister for water, I can give a direction to SA Water under section 6 of the Public Corporations Act 1993 to negotiate in good faith with livestock producers and to ensure that any water charges are consistent with the commonwealth Water Act 2007. As I have said, we will be opposing this particular amendment.

Mr WILLIAMS: I am going to respond to some of the things that the minister has just said. It is most interesting, and I will go back and read with great care what the minister just said, because I think he just made an argument exactly the same as mine. I think the minister said—and I am sure he will correct me if I have this wrong—that the bill will establish a third-party access regime that will allow other parties to buy water from the River Murray and then have SA Water transport it to these livestock producers, and that that will solve the problem.

That is exactly what I said. The only difference is that the livestock producers under my scheme would buy the water themselves, rather than have some third party or fourth party involved in providing the water to them, but the impact on SA Water would be exactly the same. The minister has suggested that the top 500 customers are utilising about five gigalitres of water and, if SA Water went into the scheme that I have described by this amendment, SA Water would be out of pocket to the tune of $16 million to $17 million.

What is the difference between what I have proposed and what the minister has suggested may well happen once we have a third-party access scheme? The difference is absolutely nothing. The difference is that the third-party access regime would do exactly what I have proposed via this amendment, except that the minister has let the cat out of the bag.

The government is talking about third-party access but it has no intention of seeing it happen. It has no intention of having a third-party access regime that actually works. Why? Because the government is intent on protecting the revenues of SA Water. That is what this is all about: this is about protecting the revenues of SA Water. That is why the government will not accede to this.

Let me make several points. If the government sets out to protect the $16 million or $17 million revenue to SA Water, that is all well and good, but what it may well do is destroy the livestock industry in South Australia. We are talking about 500 farms in the figures that the minister just quoted. There is a fair chance that all those farmers and several thousand more will stop producing livestock.

The livestock numbers in this country have dropped dramatically in recent years. In fact, since about 1990, when the world trade in wool collapsed, sheep numbers across Australia have dropped from about 170 million to fewer than 70 million. There has been a huge drop in the numbers of sheep already. What has enabled that to happen is that, particularly in South Australia, most of the farmland in South Australia is also arable, so the farmers have turned from running livestock to growing wheat and barley and a range of other crops.

As the price of water goes up and up, as it has under this government, more and more of those farmers are encouraged to forget about running sheep and cattle and just concentrate on their cropping enterprise. I have already said there are thousands of South Australian jobs in the meat-processing industry. That is under threat as well. It is not just the farmers and those communities: the meat processing industry is under threat as well. The minister's argument is an absolute nonsense because what he has suggested he will get through the third-party access regime under this bill is exactly what I am trying to do here, to speed it up and actually make it work. That is the big difference.

The minister also suggests that this will provide a subsidy from one group of water customers to another. Let us go back and make sure that we understand what is driving these massive increases in water prices which is undermining our livestock production systems in South Australia. It is the desalination plant. It is to pay for the desalination plant here in Adelaide. We should ask ourselves: what is a kilolitre of water produced by that desalination plant going to cost; and why should a farmer at Ceduna pay that additional cost?

The farmer at Ceduna has historically paid for the cost of extracting water from the Tod reservoir, and, more recently, some of the basins—the Polda Basin and other basins on the Eyre Peninsula—and pumping that water through a network of pipes and delivering it to the farmer in Ceduna. The farmer has paid and never argued. He has argued about the quality of the water he has been getting, but he has paid the going price for that. Nothing in the water delivery system for that farmer at Ceduna is changing, apart from the fact that the government decided to build a desalination plant at Port Stanvac and has to find the money to pay for it.

For the minister to stand up and say, 'We don't support this measure because it is creating a cross-subsidy from one water client to another,' is a nonsense, because what has caused the problem is that the farmer at Ceduna, or any other address in South Australia, is paying for a desalination plant to provide water security for Adelaide. That might be a reasonable argument because we have postage stamp pricing across South Australia, but the decision to double the size of the desalination plant, to go from a capacity of 50 gigalitres a year to 100 gigalitres, was a purely political decision. It had nothing to do with providing water security for Adelaide: it was a political decision to win more votes. It was a political decision taken—or announced, at least—the day after the 2008 federal budget in which the federal government promised $228 million to go towards that expanded capacity.

The story does not end there. On taking that decision, the government also had to confirm the decision to connect the northern and southern parts of the Adelaide water network. There is another cool $400 million that again the farmer at Ceduna has to pay for. If the government had not taken the decision to double the size of the desalination plant, it would not have been obliged to connect the northern and southern parts of the system.

I know that SA Water has always wanted that because it makes it easier to operate, but it was not critically necessary until the government took the decision to double the size of the desalination plant. The poor old farmer at Ceduna, or anywhere else in the state, can do nothing about that but is going to be put out of business by this government—certainly, the part of his business which is producing livestock—because this government made some stupid decisions and is now calling upon all water users to pay for them.

The story does not finish there, either, because, as part of the deal for the $228 million, the government signed off that it was going to put environmental water back into the river. It used the term 'reduce its reliance on the River Murray'. There was a definite expectation from the federal government that that meant the government would reduce its water licence and would take less water out of the River Murray. The government has fought tooth and nail to walk away from that deal and, as a consequence, another farming community—namely, the irrigation community right along the River Murray—is going to pay a very heavy price if the whole of basin plan says that we have to reduce our take from the River Murray in South Australia, because the water that the government did not return, in return for $228 million, will be given up by irrigators in South Australia.

Minister, do not come in here and say that I am calling on water consumers in Adelaide to subsidise the farming community. What is happening is that you are slaughtering the farming community, whether it be livestock producers right across rural South Australia or irrigators in the Riverland or down the length of the River Murray—you are pushing them out of business. You are pushing them out of business simply because you cannot understand and you do not like the opposition coming up with these ideas because it is exactly the same as what you have described through your third party access regime. Do not come in here and say that it will all be sorted out through that regime because it will have exactly the same impact on SA Water's bottom line as the scheme that I am proposing—exactly the same. If some third-party operator comes in and delivers water to those farmers at a cost which allows them to be viable, it has to be that SA Water is not getting the same revenue stream.

The water that comes out of the River Murray is very cheap; the water that comes out of the desalination plant is very expensive. The reason I put the cost limit, the cap on the cost of the delivery system, is that I think it is fair to argue now that the price of water delivered to every SA Water customer contains two components: one is the fixed cost (as the minister talked about) of providing the network, the pumps, the operation and the maintenance thereof; and the other now is the desal plant which is going to be, for want of a better descriptor, the cost of every kilolitre of water that comes out of it—and that is going to be substantial.

I think it is fair and reasonable now to break up the cost of water delivered to any customer in South Australia into two components: one, the value of the water; and the other, the value of delivering the water. I think the farming community can be helped, and I think the state's economy can be helped if we break that up in this instance and say to SA Water, 'The only service we want you to give to these farmers is the delivery component, and they will have their own water.'

I have no comprehension of what the minister was trying to get at when he suggested that there is a cost to SA Water of securing water, other than what I have been talking about with the desal plant, and that this scheme would undermine that in some way because they would not have to secure the water for these farmers if they took advantage of this scheme; they would own their own water. They would be responsible for getting the water. All they would want from SA Water is the delivery service—that is all they would want. So, whether it be done through this mechanism or through some third party access regime where somebody else sits in the middle and takes another profit lick out of the whole delivery of water to these farmers makes no difference to SA Water's bottom line. However, what we need to do is to make it viable for farmers to be able to run livestock right across rural South Australia, and we need to do it quickly.

The CHAIR: Minister, do you wish to respond?

The Hon. P. CAICA: I will try to be very brief.

The CHAIR: That would be helpful, minister.

The Hon. P. CAICA: There were a lot of issues raised by the member for MacKillop that I am not going to respond to because they were not necessarily connected with the act. Again, if the member for MacKillop is confused about certain things I cannot help that. But what I would say is that there already is a cost involved in the transport of water. There will always be a cost for SA Water if it is going to be the deliverer of that water, and that would need to be reflected in whatever arrangement was entered into with any third party that might buy water and then use SA Water as a transport delivery agent.

What the member for MacKillop is suggesting in these clauses is a subsidy for primary producers, and we do not support that for the reasons I have stated, and I will not go through them again. In relation to the drop in the number of animals across Australia and South Australia, I think the member for MacKillop, on this occasion, is right in saying that commercial decisions were made by landowners as to what they were going to produce.

In fact, when I was the agriculture minister and travelling across Eyre Peninsula during that most unprecedented drought, some of those who did better than others were those who had kept their finger in the pie, so to speak, with respect to having some livestock on their property. But a significant number of farmers I spoke to were not interested in that. They liked the idea of no fences and big paddocks; they did not like the idea of having to deal with livestock on a daily basis, which, of course, you have to do when you have livestock. My understanding is that it was a commercial decision by those farmers to do that—and, of course, we live in a marketplace, and they will make those decisions.

We already do subsidise water that goes to some of the areas the member for MacKillop has spoken about, and that is, of course, through the postage-stamp pricing. He also talked about the time now being right to break up the cost involved with the delivery of water into various components, which include the water and supply charges. I would remind the committee that, with this bill, we are transferring the pricing and the setting of prices to ESCOSA, and it will make a determination as to what the price will be and what are the components of that particular bill, and the opposition supports that.

On the matter of the desalination plant, the member for MacKillop can bang on how he likes, and he will continue to do so, but what I would say is that the decision to extend the desalination plant from a 50 or 100 gigalitre capacity was a sound decision when it was made, and it will prove to be a sound decision. The scientists (and I am no scientists) have calculated that what we saw in the millennium drought is a glimpse of the future, where droughts are going to be more frequent and more intense.

That will be when the desalination plant will ensure that our reliance on traditional sources of water supply—climatic-dependent water supplies—will verify that very, very sound decision. It provides water security for this state. My handwritten notes say a lot of other things, but I will finish by touching on a couple of issues which are associated with the scheme the member for MacKillop has talked about introducing. I said that such a scheme would be costly to administer and would further drive up the prices, and I gave those figures, but it would also include some other issues that would need to be dealt with by SA Water.

SA Water would need to verify that the properties have livestock and establish how much water is used for livestock versus other uses, and this information would need to be forwarded periodically. In addition, SA Water would need to undertake considerable technical analysis, often on a case-by-case basis, to determine whether there is capacity in a given segment of the network to provide the service and, of course, these customers would want security of supply.

Another example is that, if a person—and we will call him the member for Hammond because he is in my direction—decided to purchase a lot of water and get a licence and he wants to transport the water through SA Water's pipes to get it to wherever it might need to be transported for livestock production, the arrangement you have entered into with these livestock producers would be such that they would have an expectation that that water would be secure. If for some unforeseen circumstances that did not apply, I am presuming that those customers would still want to use SA Water as a producer of that to make sure that security was provided to their animals.

I will finish off my saying this: businesses—and the member for MacKillop knows this—can currently apply for access to the services provided by infrastructure facilities (for example, water transport) by private commercial negotiations with the infrastructure service provider. For example, SA Water has a number of negotiated arrangements with its rural water supply network for transportation of irrigation water, and the member for MacKillop is aware of the arrangement that exists with respect to Barossa Infrastructure Limited. So we are already doing that and, of course, this bill is further going to facilitate that.

But if the private negotiations that are attempted fail (of course, the member for MacKillop would know this as well) then businesses can apply to have the particular infrastructure services declared in accordance with part 3 of the Commonwealth Competition and Consumer Act 2010. So those facilities already exist, and for a fine example of their existence you don't need to go any further than 60 minutes up the road to see the arrangement that is in place between SA Water and Barossa Infrastructure Limited.

The CHAIR: Member for Hammond.

Mr PEDERICK: Thank you, Mr Chairman of Committees. I, too, congratulate you on your appointment. I want to make some points re the delivery of farmers, and I will declare my interest as a farmer before entering this place and still owning the property but having it leased out so I don't have to operate the business side of it. We are at Coomandook and we are totally reliant on the Keith pipeline because the water in the underground basin is just too saline to use. Certainly, the community was very grateful when the Keith pipeline came through in the sixties. It took over from a scheme that originates on the Weckett property (who are the people who lease my property), a local scheme that piped water from the back of Yumali around through Coomandook. It is an absolutely essential service to producers on that pipeline to Keith, and it was the vision of many people to get that in place.

I want to make some points about the delivery of water and why it has been necessary for piped water to go, in either an unfiltered sense or a filtered sense, to various properties along the river. In fact, the debacle has happened in the last few years under this government because of mismanagement of the drought and the River Murray, and our lack of negotiation skills when it came to getting water delivered to South Australia. What we have seen happen below Lock 1, especially close to Lock 1 where people could have drawn water from the river but could not—they could not irrigate their properties even with licensed water that they pay River Murray irrigation level 3a fees on.

So, for many hundreds of kilometres of river we have seen farmers and rural businesses suffer because of the absolute lack of access to water. As you come down the river you see the debacle (not just in the areas up towards Blanchetown) but as the river got too low people had to lower pumps to try to access that water to irrigate, and some just gave up. They decided it was too hard and for many it was too risky because of the slumping risks with the River Murray because of the lack of flow keeping it up to the post-barrage height of plus 0.75 of a metre.

As we come further down to the River Murray flats around Mannum, towards Wellington, in the last few years (under the Labor government when John Hill was the minister) we saw rehabilitation of those flats which saw close to $30 million of federal, state and producer finance go into so-called rehabilitation. As part of that, farmers had an option not to take up the option of rehabilitating blocks, so we ended up with a patchwork quilt where some properties were rehabilitated (laser levelled) at significant cost—as I said, close to $30 million across the entire area.

The long-term drought that we had saw these flats become unusable and untenable to operate as dairy properties. We saw cattle, especially calves, falling into deep cracks and disappearing out of sight and, apart from the ability to farm in an effective manner, destroying the effectiveness of all that money that had been invested all those years ago. We must make sure that, if rehabilitation happens again, it is done in a more overall way to the swamps and that we do have water at a decent level so that these businesses can keep producing.

When we go further down the river, we get to Wellington and everyone past Wellington. This government, in an announcement in 2006, was quite happy to sacrifice those entire communities. I do not say that lightly: that is a fact. The $200 million Wellington weir proposal of a sinking rock heap (700,000 tonnes) would have needed continuous rebuilding, and I certainly know that some contractors were gearing up—and I cannot blame them, as they could see a commercial opportunity—to cart this stone.

The Upper South East certainly is not short on limestone, and I can say that from my experience as a dryland farmer. I must say that, especially when I took on a property down at Tintinara, I certainly found plenty of limestone—there is plenty out there. The simple fact was that these people were going to be absolutely sacrificed to secure the water for Adelaide; that was the argument. I firmly believe, and I still believe, that it was just the lack of this government's ability to negotiate the proper outcomes for the bottom end of the river.

Over time, some irrigators around Lake Albert and Lake Alexandrina invested hundreds of thousands of dollars in desalination units that are not cheap to buy and not cheap to run. We saw private investors around Langhorne Creek put in pipelines to feed the wine grape industry, and then we saw the creek's pipeline company (and I acknowledge that the state government came on board to help manage that project) get water through to the vineyards, but it was very expensive water.

The high security water through the creek's pipeline is $1,000 a megalitre. I note that 90 per cent of the funding that went into this project was commonwealth funding. People could see that they either had to bite the bullet or their vineyards—from the fantastic winegrowing region in Langhorne Creek through to Currency Creek— would be at risk. I now get to where I talk about the canary in the mine—and it is Lake Albert. It is the absolute mismanagement of Lake Albert that has caused so much grief to one of the best irrigation areas in this state and possibly in this country. It is a fantastic area on the Narrung Peninsula for horticulture, dairy, and a range of irrigation industries.

It is good land, and it used to be good water, and it has a good climate, with breezes coming off the lakes. What we saw during the drought were people spending thousands of dollars—some up to $5,000 a week—to get water delivered to keep their dairies functioning. After all the bluff and bluster of the commonwealth, who could not work out that South Australia has actually done a lot of infrastructure upgrades over the last 30 to 40 years, because, sadly, we did not match the guidelines for the federal funding, belatedly we did see those emergency pipelines go in, and they went in just in time. I must congratulate the contractors—as I have done here before—on the great job they did.

This has become necessary because what we see now, 12 months after the recovery of the river, are people who have not been able to use Lake Albert to water their dairy herd, irrigate their pastures or irrigate crops, and that has not happened since the barrages went in. They basically have a gun at their head, and they have had to purchase River Murray water through that scheme. The amendments put up by the member for MacKillop on behalf of the Liberal Party are very good amendments, and they acknowledge the contribution that South Australian farmers make.

Salinity levels are still around 5,000 or 6,000 EC around Lake Albert because what happened was that bund go in in a hell of a hurry, when the government was worried about acidification. Then we see no eagerness at all to complete getting that Narrung bund right out of the water and out of that channel there. There is also the effect of all the silting around it; at least 20 per cent of the material that went into that neck between the lakes will still be there, and that has had a major effect. The River Murray basically recovered over 12 months ago, yet here we are 12 months on and we still have people in a region around a lake who cannot access water as they should be able to.

In fact, as the minister would be aware—it was brought to his attention the other night; he was in Murray Bridge at the meeting I was at—an irrigator said that her irrigation fees, the level 3A fees, do not even cover the amount that irrigator gets for the leasing of her water. So, apart from not being able to recoup those fees from leasing out their water, they have to pay absolute top dollar because, through no fault of their own, water has had to be delivered through a pipe. I acknowledge that the pipe was put in and that the state government did some work in regard to that—but it had to be dragged along to that point.

Many people and communities are suffering around the bottom end of the lakes. I acknowledge that many around Lake Alexandrina have been able to keep irrigating, but I want to talk about an irrigator at Murray Bridge. I will not name him, but he grows very good produce. This is part of the cost that primary industries have to pay, the hidden cost that members on the other side who have never run a business will never know about. This person has a $700,000 extra penalty, a debt that they have to service, because of what happened with the River Murray and what they had to do to lease and buy water in. Thankfully he is still surviving, but I can tell members that he is none too happy about that situation.

The CHAIR: Is that it?

Mr PEDERICK: I am getting there, thank you. I have just a little story to tell, if you do not mind.

The CHAIR: A big man with a small story.

Mr PEDERICK: Thank you, Mr Chairman; I do not want you to overstep your authority on your first day. I want to get back to the Keith pipeline which is the pipeline where, when water went down around Meningie and around the Narrung Peninsula, this source of water for both towns, and farmers and businesses on that end of the River Murray, was under extreme threat during the drought. In fact, I had discussions with former minister Karlene Maywald on what was happening there. There was talk of a desalination plant being put in at Tailem Bend for a cost of $75 million, and the SA Water representative—I think it was John Ringham, but I am going only on memory—looked at me and said, 'What do we do with the salt?' I said, 'We'll have to get rid of it because we need the water.' That is how critical it got.

As I said, I indicate my interest. The pipeline runs straight past my farm, and obviously I draw water out of it. When I was farming we used it for stock water, spray water, household water and for firefighting when we needed to, which happens occasionally.

I want to reinforce what the member for MacKillop was saying, that off that pipeline many industries have been set up, not just sheep and cattle grazing in open farmland but quite a few feedlots with both sheep and cattle. Members should also understand that there are some grazing properties that have over 500 head of breeding cattle that drink one heck of a lot of water, I can tell you.

This is a cost to the bottom line—the cost of water—which is quadrupling over time, that these people cannot sustain. In fact, down in my area there are many sheep and cattle producers who come to me, people who farm near Cooke Plains, Ki Ki, Coomandook, and they say, 'How are we going to go on?' It is a real issue, because if people only have B class poly pipe, which is the thin-walled pipe, and you get a leak, you are in real strife. If you do not pick it up in a hurry because you are busy maybe sowing a crop or harvesting that crop, or doing other duties, you can lose a lot of money.

It is very hard to get a claim back with SA Water on major leaks. You can have, I think, one claim every 10 years, and then you have to fight like hell to get that claim authorised. That is not just for the sheep and cattle industries but for the piggeries that are in the area and, certainly, down into the member for MacKillop's area. They need a lot of water to water the pigs in the eco-shelters and the breeding sheds to keep things operational and to maintain the proper water levels for stock. You cannot just switch the tap off, and no-one would do that, I can assure you. Apart from that, people need water to clean the troughs out in the paddocks and out in the feedlot yards so that stock can have good, clean water to drink as necessary.

The point I am trying to make is how vital the farming industries of South Australia are to the state. They certainly see it that they are fully subsidising the desalination plant, which, with pipework, is $2.2 billion. I know it is 100 gigalitres, but if was built back in 2007 when we brought our policy up about a 50 gigalitre desal plant, it would have been far, far cheaper. For 50 gigalitres back then you could get a plant (as it was in Perth) for around $400 million with the associated pipework. Now we see that just the associated pipework for Port Stanvac is over $420 million.

This is why these people in the farming areas are so outraged about the cost of water. It is not just my area: it is right across the state. We know this water goes right across to Ceduna, because they know darn well that they will never source water for their properties from the desalination plant. If anyone in government in this state is fool enough to let the River Murray get to the state it got to, they will be at absolute risk of water supply with no guarantee.

I certainly cannot see people rushing around to save their bacon because it took a lot of kicking and screaming to get the government to act in the most recent drought. I say that we do need a scheme that farmers and irrigators can access similar to the BIL scheme in the Barossa.

I also want to close with a few comments about third-party access. I concur with the member for MacKillop that this Labor government is not serious about third-party access. There have been proposals taken to them over many years, including by the former member for Flinders, Liz Penfold, who was seeking offshore investment to put in small desalination plants to deliver water to the West Coast of the Eyre Peninsula. Yet, 'Oh, no, we'll just pump it 700 or 800 kilometres from the River Murray and put more strain on an already overallocated river.'

The CHAIR: Is this the same topic?

Mr PEDERICK: It is the same. I am talking about third-party access now, Mr Chairman. I'm glad you're listening, I'm glad you're taking notes.

The CHAIR: The second chapter?

Mr PEDERICK: It is; it's moving on. I would like the government to rethink the amendments of the member for MacKillop. I know they do not have many members in regional areas, but the farming people of this state make a significant contribution to the wealth of this state. Last year, overall it was $4.7 billion. We run a very real risk of areas of farmland just being deserted, and we need to make sure that the many billions of dollars that gets contributed annually is rewarded.

The Hon. P. CAICA: I thank the member for his contribution. There is an enormous amount in there that is not necessarily relevant to this bill. I am not going to waste the committee's time by focusing on those and responding to them; that would be inappropriate. I think I answered previously the matters raised by the member for MacKillop that were then re-raised, if you like, by the member for Hammond.

Mr WILLIAMS: I want to make two points. A few minutes ago, the minister, in his response, made the nonsensical claim that there would be a cost of SA Water having to adjudge the capacity of its pipes to deliver water, if this amendment is passed. The minister, obviously, was not listening. This is not about providing more water, it is about providing water owned by a different entity at a cost which underpins livestock production—no more water.

The other thing that the minister said is that this sort of scheme is already available to farmers. He quoted the Barossa Infrastructure Ltd (BIL) scheme. That sort of regime is not available to farmers. That is a one-off scheme that was negotiated because of a set of very unique and individual circumstances that applied in the Barossa Valley area, and an enterprising group in that area cut a deal with SA Water. For an individual farmer to do that is impossible. That is why I am proposing this amendment.

On the one hand, the minister says that farmers can go and do this now as per BIL. If they could, I would not be proposing this amendment. They cannot do it. I can tell you that in South Australia customers have approached SA Water and asked if it will give them a quote for a delivery service to deliver water that the customer has purchased out of the River Murray, and SA Water has refused to do that. So, what the minister has told the house is not right. The reality is that this is not a service that SA Water currently provides. That is why I am proposing these amendments. It is a service that it should provide, and I think you have already acknowledged that.

The Hon. P. CAICA: I do not subscribe to the views expressed by the member for MacKillop. This bill is about facilitating exactly what it is, and we have stated what we as a government want in regard to a proper functioning marketplace. So, where we are already doing it, it is being done, and BIL is an example. This bill will continue and will, in turn, facilitate that and in fact, to a great extent, not just facilitate it but force those actions and allow those third party or private providers to enter into the marketplace. So, this is what it is about.

I would finish off by saying that to a certain extent—and I have met with a lot of primary producers, and the member for MacKillop would be aware of this—we do cap the provision of water for primary production at the second tier level. I make no bones about the fact that there is an increase in the input costs, but all of the information I have received to date is that there are a lot of circumstances that are coming to bear on the matter of primary production and the price of water is but one of them, but the information I have received to date is that it is not amongst the most significant. Be that as it may, we acknowledge, as I mentioned earlier, that it is an issue.

The other point I make is that there will always be a cost in using SA's water infrastructure to deliver that water, and the price of it will be determined between the owner of that water and SA Water. I am also presuming that the member for MacKillop would suggest that this would facilitate an expansion of water being used for primary production purposes, in particular the drinking water that will be provided to animals, so there would be more water that would come through. I think we have dealt with this. My view is—and I am being very respectful—that we have possibly dealt with this particular amendment.

The CHAIR: I agree, minister. I think we have dealt with this particular clause to death. I do not think there is anything more to be said.

Amendment negatived.

The Hon. P. CAICA: By way of clarification, I am presuming that, because we were dealing with amendments Nos 16, 19 and 2 together, by voting on that we have dealt with No. 2.

The CHAIR: No, we need to put that separately. There is still another provision we need to deal with before we go back to No. 2.

Mr WILLIAMS: I move:

Page 21, lines 32 and 33—

Delete 'considered appropriate by the Commission' and substitute:

authorised by the regulations

I am getting tired of having to talk in these terms in this place, because it comes up so often in the way this government drafts legislation. Clause 25 (the clause we are talking about) sets out what the licensing conditions will be on a licence issued to a water entity. Subclause (3) provides:

The Commission may make a licence subject to further conditions considered appropriate by the Commission.

Once we have passed this legislation, the commission can then set whatever licence conditions it likes. That is why we have a parliament. We are here to represent the people. If it is deemed that we need to have some additional conditions on water licences or some varied conditions on water licences, I think it should be up to the parliament to have an oversight of that.

What I am suggesting by this amendment is that we delete the words 'considered appropriate by the Commission' and substitute 'authorised by the regulations'. Under that circumstance, if the commission thought that there was a variation or a different condition that needed to be attached to water licences, they would go to the minister of the day and say, 'Can you make a regulation so that we can apply these conditions,' and the minister of the day could make the regulation—but it is reviewable and disallowable by the parliament. Why this government continues to draft legislation to disempower this parliament, I just cannot understand.

This is our job. We are here to represent the people. This is what the people of South Australia expect us to do. They expect us to keep an overview on what is going on and, if we do not retain the powers to make these sorts of changes, we cannot maintain that overview. To me it is quite straightforward: either the parliament will sit here and make the law of South Australia or we will abrogate that duty and say to the bureaucracy, 'You go off and do whatever you like,' because that is what this sort of clause does. It abrogates the obligation of the parliament to represent the people of South Australia. I commend the amendment. It is a small amendment of a technical nature, but it does a lot to reassert the authority and role of the parliament to make law in this state.

The Hon. P. CAICA: I thank the member for MacKillop for the brevity of his remarks on this occasion, and I will try to be equally succinct. This amendment removes the ability of the independent economic regulator to make licences subject to further conditions as deemed appropriate by the commission and, given that the commission must operate within the requirements set out in legislation, it is difficult to see what would be achieved by denying them the flexibility envisaged in the original clause.

I make the point that this clause exists in similar industry legislation. I acknowledge the ideology of the member for MacKillop about the role of parliament, which he has been very transparent about, but it exists in similar industry legislation, namely, the gas and electricity acts, which I understand may have been amended in 1996 or 1997 or thereabouts. The member for MacKillop would know better than me, as he was the member for MacKillop then and was fiercely independent and probably spoke about that particular amendment at that time during the passage of that legislation.

This clause has been used in the past by ESCOSA under these acts to impose a licence condition prohibiting entities introducing a prepayment metering system, for example. These systems, which were not common at the time of the passing of the gas and electricity acts, received considerable condemnation from social interest groups such as SACOSS. I will finish by saying that this amendment shows to me the internal contradictions experienced by the member for MacKillop when, on the one hand, he will argue fiercely about the independence of ESCOSA and then want to take away from it the flexibility to be able to do the business as it is envisaged it will.

In some cases my friend the member for MacKillop wants to remove the ability to make regulations, such as with the functions of the technical regulator, and in others such as this he wants to impose them on the independence for which he is fiercely fighting as provided to ESCOSA. It is a little contradictory. We will oppose the amendment.

Mr WILLIAMS: On the last comment first, the minister is right that I do dislike regulation-making powers, but I thought I was being generous allowing a regulation-making power in this instance, rather than saying that it would have to come back to the parliament if there needed to be a variation to a licence. It is reasonable that it be done via regulation. I think I have been here on a previous clause as the minister is using the national gas and national electricity legislation as setting the precedent for this sort of legislation. I remind the minister because he may be unaware.

He alluded to the fact that I might have known something about the national gas and electricity acts; in fact I do. I know quite a bit about them, and hopefully the minister after this will know a little bit about them as well. The national energy law, as it is referred to, is just that: it is national law, and it is applied right across Australia. South Australia is the lead legislator. The legislation was drafted and agreed to by all the states, and then it passed through the parliament of South Australia and was then adopted by all the other states.

The Hon. P. Caica: Mirror legislation?

Mr WILLIAMS: No, it is not mirror legislation, it is a different process as far as I am aware; it is just adopted by the other states. They do not pass a similar bill—it is just adopted. Because of the uniqueness of that legislation, it was considered that, in a lot of cases, it would be most difficult to make regulations because how do you handle it if regulations are made and then have the regulations made in each jurisdiction, and are they disallowable in each jurisdiction? Suddenly you end up with non-uniform national law.

I do not think that we can use the national energy laws—the National Gas (South Australia) Act and the National Electricity (South Australia) Act—to justify as a precedence why we do something in this particular piece of legislation because it is quite different. I just remind the minister of that. I acknowledge that the minister does not want to accept what I think is a very sensible amendment, and, obviously, we will test the other place on how it views this, but, minister, I think that you are getting into dangerous territory when you use a piece of legislation which is formed in a certain way for a completely different purpose as a precedent for this sort of legislation here, and I do not think that is a satisfactory reason at all for not accepting this amendment.

The Hon. P. CAICA: I thank the member for MacKillop for his contribution. What I was doing was providing a clause within this bill that is within similar industry legislation. Of course, it is contained within what is essentially a South Australian act here as it applies to the energy industry. Notwithstanding the remarks of the member for MacKillop, it has been working well here in South Australia within similar legislation, and there have been no complaints. Unless the member for MacKillop is going to speak again, I will leave it there.

Amendment negatived.

Mr WILLIAMS: I move:

Page 21, after line 38—Insert:

(4a) However, assistance provided to customers on account of a requirement imposed under subsection (4) must be limited to arrangements for the payment of any charge or other monetary liability by instalments.

This amendment is simply for clarification. Subclause (4) enables a code. I will read it out so that the committee knows what it says:

A code or set of rules under subsection (1)(a) must, if the minister so requires, include provisions to assist customers who may be suffering specified types of hardship relevant to the supply of any services (being provisions that comply with any direction of the Minister and that will apply under the code or rules despite any provision made by the Essential Services Commission Act 2002).

Subclause (4) talks about setting up a code to require special provisions for those customers who are having trouble paying their accounts. This amendment seeks to insert a new subclause (4a) to clarify subclause (4), which I have just read out. New subclause (4a) provides:

However, assistance provided to customers on account of a requirement imposed under subsection (4) must be limited to arrangements for the payment of any charge or other monetary liability by instalments.

This is simply to clarify it, because when directions are given to SA Water to provide certain benefits to someone who might have trouble paying their bill, that is one thing because it is government owned and, if the minister gives a direction, that is the decision that the minister has taken and the government has taken.

However, this bill is now going to encapsulate a whole range of other water entities which will be privately owned and which have no relationship with the government other than being licensed. I just wanted to make absolutely clear that this code and the direction from the minister will be restricted to making a code have a system whereby people can pay by instalments rather than waiving payments or some other outcome. I think that it should be clarified. I do not think we should be giving the powers here to do more than what I am suggesting by the clarification of insertion of new (4a).

The Hon. P. CAICA: I thank the member for MacKillop for clarifying what this subclause means, because I was not quite sure. Given his comments there, we are not going to support the amendment. Certainly it is my view now that the member for MacKillop's amendment limits assistance to the vulnerable customers and undermines the safeguards in the bill to protect them. That is what that safeguard is about. Customers experiencing hardship are people who are having trouble paying, not people who will not pay, and this is, of course, about having arrangements in place that will allow those people experiencing hardship to enter into such arrangements.

People can experience hardship for a range of reasons and it requires a range of solutions. What I would be saying, in contrast to this particular opposition amendment, is that hardship measures for vulnerable customers of essential services often include more than just payment arrangements for charges in instalments. For that reason, amongst others, we will not be supporting this amendment.

Mr WILLIAMS: That has just confirmed my worst fears. Let me just go back a step. We are now applying licensing conditions to entities which are other than SA Water, not government owned, to private businesses. Minister, can you indicate to the committee what sort of arrangements you envisage putting in place, because if we take steps other than allowing for an arrangement where people suffering hardship are paying by instalments, you must be giving them a holiday from pain. You must be waiving their obligation to pay for a service.

If the government wants to do that with regard to SA Water, that is the government's right, but I do not think we should be making law to say that the minister of the day can say that there would be that sort of arrangement made with regard to a contract between somebody, irrespective of any hardship they might be suffering, and a private enterprise. Is that the intent of subclause (4), that is, the minister will have a code of practice where there will be other than arrangements to pay by instalments?

The Hon. P. CAICA: I thank the member for his contribution. I will put it as simplistically as I can and as quickly as I can.

The Hon. M.J. Atkinson: Surely it is 'simply', minister, not 'simplistically'?

The Hon. P. CAICA: Simply. I thank my friend. He is a wordsmith.

Members interjecting:

The Hon. P. CAICA: I will. I apologise, Mr Chairman, but I thank the member for Croydon for his correction of my language.

The CHAIR: Your grammar.

The Hon. P. CAICA: Yes, I am gooder at grammar! The government takes the provision of hardship policy very seriously. A lot of the matters by which we deal with hardship come in a variety of forms. We have a significant amount of money that is provided through CSOs that again look at providing support for people with respect to hardship. Of course, on occasions hardship can come in various forms, so we enter into arrangements with those people who have a capacity to pay but will need some assistance in flexible arrangements for that repayment.

The thrust behind this, for the benefit of the committee, is that in taking the provision of hardship policy very seriously we want to make sure we have a level playing field. Under this bill, we are going to facilitate the entry of other players into the marketplace. If they are third-party providers to individuals within our community, we expect that third-party provider, as a result not only of a level playing field but because we take hardship seriously within our community, to ensure that those same provisions are provided as part of what is available to that particular customer. That seems to me to make a lot of sense.

There are examples. In addition to the flexible payment options, SA Water also provides arrangements that include ensuring that water supplies are maintained and that customers are not subjected to legal action or restrictions when the customer continues to make payments according to an agreed payment plan; and also, providing the customer with additional support services, including referral to welfare agencies and water-efficiency programs.

They are just two, but I would also note that the proposed amendment provides South Australian customers with less protection than is available, for example, in Victoria. I would ask: are our vulnerable consumers deserving of less protection than their Victorian counterparts? I provide these examples to illustrate that customer hardship is a complex matter and not one that can be addressed through the narrow limits that are being proposed in the opposition's amendment. I hope that he joins with the government in taking very seriously the provision of a hardship policy, as is the case with the government.

Mr WILLIAMS: This gets back to where we were last time—I think, back on 20 October—when we were debating earlier clauses. This gets back to the fundamental difference between providing an essential service and providing a service which is not an essential service. That is why I argued back then that we should only be applying the licensing under this bill to essential services, not to non-essential services. This is why this is a nonsense.

As I said, we need to make the distinction of SA Water, as a fully government-owned enterprise providing an essential service. I have no problem with what the minister has just said, but when he wants to apply the exact same regime to a non government-owned, that is, a private business, providing a non-essential service, it is a nonsense.

Why do we not apply the same regime to the petrol retailer? I am sure that people go down to fill their car up and have trouble finding the money. They are under hardship paying the bills. Why do we not go to the local petrol retailer and say, 'We are going to establish a code of practice and you have got to do certain things to help these people under hardship'? Why would we do it to a private entity providing a non-essential service in the water industry when we do not do it in any other industry?

It is a nonsense, minister, and this clearly demonstrates that you have not put proper thought into this whole piece of legislation. The whole piece of legislation is a nonsense. With some of the things you are trying to achieve, such as independent pricing, you are heading in the right direction but you have got it completely wrong. With third-party access, you are heading in the right direction but you are scared of it and you do not intend ever getting there.

The Hon. P. Caica interjecting:

Mr WILLIAMS: Well, time will tell. Minister, I do not think this parliament should be giving powers for you or any other minister to establish a code which obliges a private entity providing a non-essential service to make special provisions, other than for the payment to be made under an arrangement of instalments.

Other than that, it imposes those sorts of conditions on a private enterprise for a non-essential service. That is what you are asking the parliament to do; to approve a power to allow you or a subsequent minister to institute a regime imposing upon a private entity providing a non-essential service some sort of condition to allow for people who find themselves in hardship. It is a nonsense, minister.

The Hon. P. CAICA: I think that the member for MacKillop is quite sceptical about what it is that we say is a hardship policy, and I cannot help him with his scepticism. I guess there is also the argument about what is essential and not essential. We had that debate when we were last sitting and we know that there are private providers that provide discrete sewerage systems in a lot of our communities, and that is an essential service. I will leave it at this: essentially the member for MacKillop's amendment puzzles me. It puzzles me as to why we would want to limit the ability for water service providers to work constructively with their most vulnerable customers. That is the thrust behind our original clause, and it is not enhanced by the amendment being advanced by the opposition.

Amendment negatived; clause passed.

Clause 26.

Mr WILLIAMS: I move:

Page 22, line 9—After 'services' insert:

operated by entities licensed under this Part

This amendment contemplates that other amendments would also have been accepted by the government, and I think they have not been. However, I am still happy to move the amendment. I do not think it detracts from the clause at all. To be quite frank, I do expect the other place to be a little kinder with some of the amendments that I have proposed than what this house has been. This amendment simply adds a little clarification to the clause as it stands.

The Hon. P. CAICA: For the benefit of the other place, if it is going to be revisited with them 'more kindly' when it gets there, we are opposing this amendment. The reason we are opposing it is that it would limit the scope of the report on third party access to licensed vertically integrated retailers only. I think it is inappropriate to limit the scope of my report to parliament on this important policy development in this way. Even though he does not believe that we are going to facilitate this, I think it is important that it gets reported in parliament, so I cannot support this amendment.

It is entirely appropriate in the development of the report that standalone water and sewerage networks be considered in scope. Of course, they are covered under what exists, but not necessarily covered under what the member for MacKillop has moved. Furthermore, to only consider licensed retailers in the development of a third party access report would make it difficult to consider developments in other industries and a number of intergovernmental arrangements that have been developed under commonwealth legislation, such as the commonwealth Competition and Consumer Act 2010 and the commonwealth Water Act 2007.

Amendment negatived.

Mr WILLIAMS: I move:

Page 22, after line 21—Insert:

(4) The Minister must use his or her best endeavours to introduce into Parliament within 9 months after the commencement of this section a Bill for an Act to provide for a third party access regime to water infrastructure and sewerage infrastructure services operated by entities licensed under this Part (after taking into account the contents of the report prepared under subsection (1) and any other relevant factor).

We have already discussed it a number of times, and the minister alluded to it in his answer just then. I am rather sceptical about the government's intention in relation to third-party access.

I think earlier in the debate, and possibly during the second reading debate, I talked about the reality that the Labor government in New South Wales—the previous government in that state—introduced a third-party access regime some time ago (several years ago at least, I think), and in my understanding it has never been taken up because the regime is such that it is almost impossible for it to work.

I think the government understands that there is popular support for third-party access. In fact, the vast majority of the submissions made on this bill were about third-party access, and they were encouraging the government to get on with it. I think there is huge scope in our water industry via third-party access to drive prices down and benefit consumers. However, that will only come to pass if the government is genuine about third-party access.

Again, it is a nonsense that the bill, which has been several years in the genesis, sets out a program for the minister to start to move towards third-party access. I think it demonstrates a dereliction of the government, having done all the background, all the work and all the consultation, to come to this point in this bill outlining a third-party access regime for this parliament to debate at this time and get it going.

I talked earlier about the farming community and the rapidly rising inability in that community to continue to run livestock in this state. There are a host of other businesses and enterprises in this state that are reeling at the cost of water, and third-party access regimes may do something about that, but my scepticism comes from the minister's acknowledgement in that earlier debate on the earlier clause regarding the scheme to try to help livestock producers when he demonstrated that his main concern was protecting SA Water's revenues.

I have to say to the committee: you have to have one agenda. If your agenda is to build efficiency and deliver lowest cost services to consumers, that is fine, but if your agenda is to protect the revenue stream from SA Water you cannot achieve all those other things. You cannot have them both; they are mutually incompatible. If I had the facilities that are available to the government, I would have actually been proposing a third-party access scheme, but unfortunately I do not have the resources to be able to develop that. However, what I have done is brought forward this amendment to try to force the minister to move as quickly as possible.

The amendment obliges the minister to use his or her best endeavours to get moving via the introduction of legislation to provide for third-party access. It will be interesting to see the minister's reaction to this; if he accedes to it, he may, in some small part, allay my scepticism.

The Hon. P. CAICA: I thank the member for MacKillop for his comments. I state on the record here that I will be using my best endeavours to determine and have determined a third-party access regime.

Quite simply, this amendment pre-empts the outcomes of the review and any complexities that might be within it. For example, do we know that it is going to require a bill for an act of parliament to provide for third-party access? I do not know that. I highlighted earlier that, again, it is limiting to infrastructure services operated by entities licensed under this part; and we dealt previously with whether to narrow the scope. It is pre-empting the outcomes of the review and, whilst it does place an arbitrary time frame on this which probably does not reflect the complexity of the tasks, I would make those points as being just as important as the arbitrary time frame.

I cannot support this amendment but I finish by saying this in regard to comments made earlier by the member for MacKillop that what we ought to do—and I paraphrase—is ensure that we protect SA Water's customer base. Far from that, the comments that I made earlier with respect to the issues we spoke about were actually about protecting their customers, not SA Water.

The member for MacKillop also said he wished he had resources available to him because he would start working on what will be the regime for third-party access. I welcome that because I want the member for MacKillop to be part of the consultation process—which, of course, is not only a consultation process that we open up to the opposition but also to all those people who are interested in becoming third-party operators within a properly regulated water marketplace that we want to establish.

I am even happy to give the member some resources to help him be part of this consultation process, but I also make this point. I will not name the person but I think it was at either a CEDA or Water Industry Alliance function where I sat at the front and was asked some questions. People asked, 'Are you serious about third-party access here in South Australia? Are you going to establish something that is in place in New South Wales and has prevented companies like mine getting proper arrangements in place for third-party access?' I said, 'No, our intention and our commitment is to ensure that we have a marketplace here that provides for third-party access.'

I might say, that is at odds with some people's thinking but certainly not mine, and, as minister, I am going to work towards that and this government is committed to that. The best way of doing that is by making sure that we do not limit the scope of the review or put arbitrary time frames on it and that we ensure we get out there and consult with the people who we want to encourage in a competitive environment to enter into third-party access arrangements by utilising the existing infrastructure. We oppose this amendment.

Amendment negatived; clause passed.

Clause 27 passed.

Clause 28.

Mr WILLIAMS: I move:

Page 22, line 36—After 'variation' insert '(and giving due consideration to any such representations)'

It is a very simple amendment. I think we need to make clear, when we give a person or an organisation the opportunity to make representations when the minister, a commission, or anybody is about to make a decision, or has to make a decision, that not only do they have a right to make those representations but also the decision maker should then give due consideration to those representations. It is not rocket science and it just clarifies what I believe should have already been in the clause.

The Hon. P. CAICA: It is a minor procedural amendment. My expectation, and the expectation of parliament in passing the clause as it was, is that there would be due consideration given to such representations. I believe this is a superfluous amendment but I am going to support it.

Amendment carried; clause as amended passed.

Clauses 29 to 34 passed.

Clause 35.

Mr WILLIAMS: I move:

Page 25, after line 19—Insert:

(ab) ensure that a copy of the order is published on the Department of Treasury and Finance's website; and

Again, this is simply a technical amendment and, in my opinion, simply states 'ensure that a copy of the order is published on the Department of Treasury and Finance's website'. This is, I think from memory, the pricing order. I am sure the minister will say, 'Well, that is our intention.' I move these sort of amendments from time to time because in opposition, notwithstanding the best intention of the parliament and notwithstanding the best intention of ministers in passing legislation, I spend an inordinate amount of time putting in freedom of information applications because of the huge amount of secrecy surrounding government. This is just to ensure that the pricing order issued by Treasury is an open document and it just builds further accountability.

The Hon. P. CAICA: Amendment No. 23 is a procedural amendment regarding the publication of the price order. We are going to support No. 23. However, I think it has been said previously that the Department of Treasury and Finance had intended to publish its pricing order on this website and, therefore, the amendment is supported. I make no comments (although I could) about this 'web of secrecy' that he says exists, but it was our intention to publish this anyway, so we support it.

Amendment carried.

Mr WILLIAMS: I move:

Page 25, after line 21—Insert:

(8a) In addition, in making a determination, the Commission must have regard to the principle that the prices charged to small customers for retail services should be at the same rates for all small customers regardless of their location in the State (and a pricing order must, if relevant, take this principle into account).

(8b) Subsection (8a) does not prevent the Commission setting different rates for different classes of services.

I am sure the minister will support this for the simple fact that this reflects the national electricity act and national gas act—certainly the national electricity act. This amendment would ensure that we have a continuation of postage-stamp pricing across South Australia. There is nothing in this legislation to ensure that and, notwithstanding that we have industries reeling under the increasing prices, there is nothing in here to ensure that small customers will continue to benefit from postage-stamp pricing.

The reality is that people in far-flung rural communities are probably paying a lot more than it actually costs to deliver water in those communities now—again because of that desal plant and those decisions taken by this government. This clarifies the matter and it is, as I say, taken directly out of that other legislation that the minister keeps putting up to us as setting a precedent.

The Hon. P. CAICA: Presumably we are dealing with just amendment No. 24, aren't we?

Mr WILLIAMS: We are.

The Hon. P. CAICA: The government is not going to support that; it is about statewide pricing and we oppose it for this reason, amongst others, but on 19 October the member for MacKillop made a number of statements about the need for a greater independence of ESCOSA. The government welcomes the opposition's recognition that in these amendments there are, indeed, cases in which it is appropriate for ESCOSA, in the exercise of its powers, to be given authority to go beyond the economic efficiency criteria in its own legislation.

Statewide pricing may represent such a case but we have been consistent in saying that the matter of the determination of the prices will be a matter for ESCOSA. However, this amendment would seem to permanently require statewide pricing, notwithstanding any review by ESCOSA of the principles behind the pricing structures. I acknowledge the comments made by the member for MacKillop that there is already, through postage-stamp pricing, a subsidy being paid to people in country South Australia on the basis that it costs more, in the main and in a general sense, to get that water there.

Under Water for Good, the government is committed to requesting ESCOSA to prepare a report on statewide pricing, and this amendment would constrain future governments by enshrining statewide pricing in legislation and would unnecessarily inhibit any future consideration of more efficient or more appropriate pricing structures which may, in turn, benefit consumers. So, we say that this is a job for ESCOSA to undertake.

Mr WILLIAMS: I am more frightened now than I have been to date in the debate on this bill. It seems obvious that the government has no intention of continuing the postage-stamp pricing regime across the state. What really frightens me is that this government has imposed what will be, by June next year, a trebling of water prices in South Australia upon every SA Water customer, including those in far-flung places, to pay for the desal plant.

Now, having imposed that on them, against their wishes and against their best interests, for the building of assets which will have no impact whatsoever on them, other than driving up the price of the service to them, the government is going to say that it will walk away from that, and anything might happen to your water price if you happen to live in a very small community, where obviously the cost of providing all sorts of services is relatively high.

The minister spoke passionately a few minutes ago about this government's attitude to people with hardship. He tried to tell the committee that he has a heart. The reality is that this government has no damned heart. If the government cannot stick by postage-stamp pricing for what is an essential service—that is, the delivery of water—to all of those places across South Australia that currently enjoy that service, what is this government doing? It has lost sight; it has no heart.

The earlier words of the minister that he takes the issue of hardship seriously are all a nonsense. I repeat: this is enshrined in the National Electricity Law, and ESCOSA is obliged under that legislation to provide a postage-stamp pricing regime right across South Australia, irrespective of the cost of providing electricity in some of those far-flung places. That principle, the opposition argues, should indeed be applied to the supply of the essential water service as well.

The Hon. P. CAICA: My father used to say to me that you cannot be half pregnant. Quite simply, what we have in place, through this bill, is ESCOSA becoming the mechanism by which prices will be set, and ESCOSA may come up with far more effective ways in relation to matters relating to the cost of water in remote areas. I have heard others but in particular the member for MacKillop banging on about the cost of sewerage.

Of course, the government's position is that, with regard to sewerage, it be a progressive tax, but ESCOSA will be looking at that as well. So, you cannot have it both ways. I am sure that you would like ESCOSA to look at that, but then, on another occasion, you do not want it to look at something else. Let us not limit the scope of what ESCOSA is going to look at with respect to the setting of prices.

Amendment negatived.

Progress reported; committee to sit again.


[Sitting suspended from 13:00 to 14:00]


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