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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-05-14 Daily Xml
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WATERWORKS (RATES) AMENDMENT BILL

Received from the House of Assembly and read a first time.

Second Reading

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (17:38): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

This Bill proposes to give effect to the Government's commitment to introduce a system of quarterly billing of water use charges for water supplied by SA Water so that customers can monitor their water use more effectively.

For many years water meters have been read on a six monthly basis. As a consequence, billing practice has been for SA Water customers to receive four bills each year, but only two of these bills include water use charges. In addition, the way the tariff structure currently operates, water use charges tend to fall more heavily in the second of the two water use bills.

The net effect is that water use bills do not currently provide customers with timely feedback on their water use and household budgeting is more complex.

The billing arrangements enabled by this Bill will allow water use charges to be applied to all four bills each year, providing customers with more timely information about the amount of water used in the preceding quarter as well as assist with family budgeting. In short, customers will be able to take better control of their own water use.

To facilitate this, the inclining block tariff which underpins water use charges will be applied on a quarterly basis rather than the current annual basis.

The proposals will bring charging of water use into line with the billing arrangements applied by other utilities, such as electricity, and by other major water utilities interstate.

The proposal will also be supported by the introduction of more informative water use accounts for customers, enabling customers to make the most informed decisions about their water use.

Quarterly water use billing is proposed to be introduced from 1 July 2009. While water prices for 2009-10, or rates as they are referred to in the Act, were gazetted in December 2008, these prices will need to be re-gazetted to implement quarterly billing. The re-gazetted prices will be the same prices as those gazetted last year, except that the thresholds of the inclining block tariff will be expressed as levels per day rather than per year.

Applying thresholds on a daily basis reflects practice in other utilities and water authorities, and enables variations in quarterly water use periods caused by the realities of the meter reading schedule to be taken into account.

To the extent that meter reading periods straddle financial years where different prices apply, water use in each period will be determined on a pro rata basis according to the number of days before and after 1 July—that is, by assuming that the water has been supplied at a uniform rate.

Prices for water use before 1 July 2009 will continue to be based on 2008-09 water prices consistent with the arrangements put in place last December. At that time the Government set 2009-10 water prices but also published a notice under section 84 of the Act, reducing the prices that applied to water supplied in the 2009-10 consumption year before 1 July 2009 to 2008-09 prices.

I emphasise that, at no time will customers be billed for water that they have not already used. To the extent that the transition may pose some cash flow concerns for customers, it will be possible for customers to negotiate a suitable payment plan with SA Water to assist them through any short term difficulties.

This important Government initiative will provide long term benefits by better informing customers and encouraging more responsible water use.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

The measure will be brought into operation by proclamation.

3—Amendment provisions

This clause is formal.

Part 2—Amendment of Waterworks Act 1932

4—Amendment of section 4—Interpretation

The Act will no longer include the concept of a consumption year.

5—Amendment of section 65A—Interpretation

These amendments relate to terms and concepts that are relevant to Part 5 Division 1 of the Act (Rates).

6—Amendment of section 65B—Composition of rates

This clause provides for a change in terminology (so that a 'water consumption rate' will now be known as a 'water use charge').

7—Amendment of section 65C—Declaration of rates etc by Minister

Rates and charges may vary according to the volume of water supplied to the relevant land over a specified period or periods.

8—Insertion of section 65CAA

New section 65CAA will establish a series of principles associated with the declaration and imposition of rates. In particular—

(a) water rates must be fixed before the commencement of a relevant financial year and if rates are not fixed before 1 June in any year then the rates will remain the same for the ensuing financial year;

(b) it will be possible to fix a charge or rate for commercial land up to 31 July in any financial year;

(c) there will be flexibility for selecting the appropriate period for the calculation of any water use charge;

(d) water use charges may be imposed on a pro rata basis to take into account arrangements for the reading of meters and the form and nature of any relevant rate;

(e) water use charges may be collected after the end of the particular financial year to which they relate.

It will also be expressly provided that any determination, calculation or adjustment that is to occur over or in respect of any period or on a pro rata basis will assume that water has been supplied at a uniform daily rate over any relevant period.

9—Repeal of section 65D

10—Repeal of section 68

11—Amendment of section 86A—Liability for rates in strata scheme

12—Amendment of section 86B—Sharing water use charges in certain circumstances

13—Repeal of schedule

These clauses make consequential amendments or delete provisions that are out-of-date.

Schedule 1—Transitional provisions

This schedule provides for transitional arrangements associated with the introduction of this measure taking into account the fact that water rates have already been declared for the 2008-09 financial year and the 2009-10 financial year. In particular, it will be necessary to provide a scheme to 'transition' from a scheme based on the supply of water during consumption years to a scheme based on the imposition and recovery of rates based on supply during a financial year.

In order to apply this new scheme, the Minister will declare a new set of rates under the Act as amended (and this notice, taking into account the Act as amended, will supersede the earlier declaration in relation to the 2009-10 financial year (declared before the commencement of this Act)). The result will be that the rates for the 2009-10 financial year, and each financial year thereafter, will be declared and operate without needing to take into account the concept of a 'consumption year'.

Debate adjourned on motion of Hon. D.W. Ridgway.

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