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House of Assembly - Fifty-Third Parliament, First Session (53-1)
2014-12-03 Daily Xml
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SA Water

Mr MARSHALL (Dunstan—Leader of the Opposition) (14:11): Supplementary: can the Treasurer comment on Dr Paul Kerin's comments in his evidence last Friday that contributed assets which have already been paid for were excluded from the regulated asset-based valuation? If there has been a changed valuation methodology, can the Treasurer outline when that changed methodology came into place?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (14:11): I've got to say that from reading his comments to the committee, as I said to the parliament yesterday, I felt that Mr Kerin's testimony was confused. As I said—

Mr Tarzia: He's an expert.

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

The Hon. A. KOUTSANTONIS: The arrangements for pricing water in South Australia have met and continue to meet all the appropriate regulatory requirements and are consistent with the National Water Initiative. The government has followed the rule book, and we have followed the rule book in applying accepted regulatory practices to SA's water prices since 2004-05. It is my opinion that Dr Kerin's evidence to the Budget and Finance Committee was not that of an independent regulator; it was that of a partisan political attack on the Labor government. He just did not—

Mr Knoll interjecting:

The SPEAKER: The member for Schubert will stop bellowing, 'He is one of yours.' And he is called to order. The Treasurer.

The Hon. A. KOUTSANTONIS: Dr Kerin simply didn't like the election outcome, and he says so in his resignation letter. There are many people who are disappointed with the election outcome. There are many people who look at the election outcome and they are confused; they don't know how it happened. They are not quite sure why it happened.

Ms REDMOND: Point of order on relevance: the election outcome is hardly an answer to the question asked by the Leader of the Opposition.

The SPEAKER: Yes, the Treasurer will return to the substance of the question.

The Hon. A. KOUTSANTONIS: ESCOSA conducted an inquiry each year from 2004-05 to 2010-11 into the pricing process, to ensure that pricing was consistent with COAG principles. I point out to the house that from 2004-05 to 2007 those COAG principles were endorsed by the then Howard government. The regulatory asset base is included in this process and is set in accordance with accepted regulatory principles. It is commonplace for the practice of a regulatory asset base to be set at the beginning of an independent economic regulation to minimise the impacts of changing methods. It has been done for a range of industries around Australia and, as I told the parliament yesterday, in Victoria, for example, the Minister for Water also sets the regulatory asset values for water entities at the start of independent economic regulation.

Our water pricing policies are designed to ensure fair and equitable service delivery for all South Australians irrespective of where they live, so I am amazed that there are country members in this parliament who are sitting quietly while the Leader of the Opposition is up attacking the very processes that give those country members postage price—

Members interjecting:

The SPEAKER: The member will be seated while I warn the member for Stuart for the second and final time, his having acquired warnings this morning. I should not have called the member for Schubert to order, I should have warned him a first time.

Mr GARDNER: Point of order, Mr Speaker: 98, the minister is clearly debating.

The SPEAKER: I will listen carefully to the Treasurer.

The Hon. A. KOUTSANTONIS: Thank you very much, Mr Speaker. Our water pricing policies are designed to ensure a fair and equitable service delivery for all South Australians, irrespective of where they live. I think it is important that the house understand that we are in a state that has lower rainfall than the rest of the country, that we are the driest state on the driest continent in the world, and the cost of that infrastructure is important. If we bring back real pricing of water delivery to regional and rural communities, they will see dramatic increases and they will be at the mercy of the budget process.

As I said to the house yesterday (and I notice that I am running out of time), under the previous government we suffered a lack of significant investment in water infrastructure but we had one aspect in common—that the asset base for the time was set out on accounting values based around replacement costs. These values are calculated by SA Water, as they still are.

Ms Chapman interjecting:

The SPEAKER: The deputy leader is warned.

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