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House of Assembly - Fifty-Third Parliament, First Session (53-1)
2014-12-02 Daily Xml
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Water Pricing

Mr MARSHALL (Dunstan—Leader of the Opposition) (14:39): Does the Treasurer agree with Dr Paul Kerin's evidence to the Budget and Finance Committee last Friday that the regulated asset base in South Australia is overvalued by approximately $2 billion?

The SPEAKER: Before the Treasurer starts, if you ask an open-ended question like 'Does the Treasurer agree', he is going to have a lot of scope.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (14:39): No, Mr Speaker, no. Mr Kerin's comments to the Budget and Finance Committee, I thought, showed that they were confused. They showed someone who didn't understand their role as a regulator. They were not policymakers. We are the policymakers. The people of South Australia own these assets. They are our assets. They belong to the people of this state and we socialise the profits to make water affordable.

Members opposite need to understand this fundamental principle: if they want to remove postage stamp pricing for water, what does that mean for regional water users? What does that mean for regional remote communities about what they pay for water? What does that mean for the Liberal Party's base? What does that mean for their base? It means they will be paying more for their water. We are the driest state in the driest country in the world and we have postage stamp pricing for water and we do so because it's the right thing to do by the people of South Australia.

The initial regulatory asset base is now rolled forward on an annual basis, reflecting new investments, as it should, depreciation and asset disposals. This approach provides a number of important benefits for regulated businesses and consumers, including price stability, business investment certainty and administrative simplicity. If we undervalue our regulatory asset base we risk undermining the ability to replace and improve water infrastructure. When you have a land mass the size of western Europe, with 1.6 million consumers, that asset base is very important and we upgrade it so they can get the water they need.

It's a risk not offering an attractive prospect to potential investors in this space. If either of those risks are realised we will inevitably have accounted for last-minute full liability government spend to prop up the asset base, which results in price hikes for customers. It is this government that has invested in our water assets. It is this government that gives certainty to people in rural and regional communities that they pay for their water, not the actual cost of delivering the water to their homes but a subsidised cost. If the Liberal Party wants to have actual pricing of water to those regional communities then let's have a debate.

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