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House of Assembly - Fifty-Third Parliament, First Session (53-1)
2014-10-29 Daily Xml
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Water Pricing

Mr MARSHALL (Dunstan—Leader of the Opposition) (17:03): What is the government's plan to reduce water prices, or do they find it acceptable for South Australia to remain with the highest water prices in the nation?

The SPEAKER: I think there is a fair bit of comment in that question, oddly enough. Treasurer.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (17:03): As I said, the government has followed the rule book when it comes to applying accepted regulatory practice to SA Water prices since 2004-05. ESCOSA conducted an inquiry in each year from 2004-05 to 2010-11 into pricing processes to ensure that pricing was consistent with COAG principles. In the transition years of 2011-12 and 2012-13, ESCOSA provided advice directly to the government on pricing.

The details for each year's pricing decision are available on the Treasury and Finance website. It is quite clear from these reports that the water price rises are primarily related to the investment in water security infrastructure and not because of the price of water. With the price of water in place, the ESCOSA determination resulted in a 6.4 per cent reduction in water prices in the last financial year. Like any investor, the people of South Australia expect a return on their investment. In fact, the National Competition Policy has an object that the government should run its businesses the same way as the private sector does and earn a real rate of return. Let me repeat that: the commonwealth government and COAG principles require us to run SA Water as a business on behalf of the people of this state and get a return.

Members interjecting:

The SPEAKER: Will the Treasurer be seated. I know that the Treasurer can be provocative but the leader's interjections are over the top, and the member for Hartley is called to order.

The Hon. A. KOUTSANTONIS: Like any investor, the people of this state demand a return. They own the assets.

Mr van Holst Pellekaan: They don't want their assets over-valued.

The Hon. A. KOUTSANTONIS: They just want them sold, do they? They just want them sold. The requirement—

The SPEAKER: The member for Stuart is warned.

The Hon. A. KOUTSANTONIS: The requirement ensures that private businesses can compete in the market without being disadvantaged. If the Liberal Party wants us to undermine third-party access to private companies by undercutting them, then that is their policy.

Members interjecting:

The SPEAKER: The opposition asked the question in a very contentious way; they are now reaping their reward with the Treasurer answering it in a very contentious way.

Members interjecting:

The SPEAKER: The member for Chaffey is called to order, and the deputy leader is warned for the first time.

The Hon. A. KOUTSANTONIS: The difference between a government-owned business and a privately-owned business is that the government reapplies the returns on its investments for the public good, a concept foreign to Liberal parties. Over the period 2014—

Mr Marshall: Give me a break.

The Hon. A. KOUTSANTONIS: No, I won't give you a break. For 2014-15 to 2017-18 the government is forecast to received $630 million in dividends and $284 million in tax equivalent payments. Over this time the government will also make community service obligation payments to SA Water of $515 million, which lowers the water and sewerage prices and provides for community services. The water and sewerage concession payments of $177 million benefit lower income water and sewerage service customers. After taking into account the community service obligation payments and the water and sewerage concessions, a total of $222 million is forecast to be available over a four-year period.

It is an interesting academic experiment to consider what would happen if the regulated asset base were slashed but, in practice, this would be a significant variation of the established regulatory practice and could seriously damage South Australia as a place in which we can invest.

Ms Redmond interjecting:

The SPEAKER: The member for Heysen is called to order.

The Hon. A. KOUTSANTONIS: The person who is most worried about people's reputations is interjecting on reputations.

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