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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-10-17 Daily Xml
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SA WATER

The Hon. R.L. BROKENSHIRE (15:08): My question is to the Minister for Water, and I seek leave to make a brief explanation before asking him a question regarding SA Water bill impacts on South Australian families and pensioners.

Leave granted.

The Hon. R.L. BROKENSHIRE: Thank you, sir. I hope you will still be happy with the question. The Auditor-General's Report revealed some very interesting information about the operations of SA Water. In fact, on page 1823—it is a huge report—the Auditor-General states:

SA Water has exceeded the planned profit before tax by $48 million. SA Water internal reporting indicates major contributing factors were:

higher than planned income from rates and charges of $11 million due mainly to water sales

lower than planned operating expenditure in the order of $28 million for the Adelaide desalination plant—

and it goes on. I focus on the $28 million saving on operating expenditure for the desal plant because the dividend to the SA government was $26.6 million higher than budgeted—very close to the amount actually saved on the desalination plant.

The minister and I had a discussion about this issue on FIVEaa radio yesterday morning, and I start my questions with the one he could not answer on air. Perhaps after more than a day, diligent as he is, he has found out the answer to my question about community service obligations, which largely are to provide what is called postage stamp pricing so everyone in the state pays the same price for water. Before proceeding to my questions, I thank the minister for acknowledging on radio that his government continues to support the principle of postage stamp pricing for country SA residents. My questions to the minister are:

1. Why were the community service obligation payments $183 million in 2009 and as high as $198 million in 2010, but fell right back in 2013 to $107 million? I acknowledge the minister said on air it is going back up to $124 million this year, but that is still far short of $198 million in 2010.

2. Why did the state government believe there was merit in the past of providing a one-off water security rebate due to the cost of water security projects, but when those costs do not end up being as high as anticipated, they will not offer a further concession to water customers?

3. Does the minister accept the argument that if you do not pass this much dividend through SA Water to general revenue you would not need a new tax as he claimed on radio yesterday, but rather could find savings initiatives, like eliminating government waste, to cancel out the reduced dividend income?

4. The minister said on radio that he defends the government's right to take dividends from SA Water to pay for non-water related projects. Is the minister saying his government does not care about the cost of living pressure posed by water bills?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (15:12): What an appalling question, Mr President! The honourable member just repeats his ignorant approach that we saw on FIVEaa yesterday. Clearly he did not take on board anything that I said. In fact, I am wondering whether he actually listened, so perhaps I might take him through a couple of the comments that I made then.

I understand that the SA Water profit after income tax increased by $42 million to $264 million, as outlined in the Auditor-General's Report, and this does not reflect the return to government, of course, because the profit includes amounts paid to SA Water's community service obligations, which the honourable member mentioned in his explanation, and for non-commercial activities including, as he said, statewide pricing—I think he referred to it as postage stamp pricing—which ensures that all SA Water customers pay the same price, despite the cost of providing the service to them.

Clearly, if you think about it rationally for a moment, the cost of providing water services in the country, in rural and regional areas, is much higher than it is to metropolitan Adelaide, but this government maintains a policy that everybody in the state should pay the same price. Effectively metropolitan Adelaide water consumers are subsidising users in other parts of the state. We believe, and continue to believe, that is a fair approach.

This increased profit goes directly, of course, to government services. It allows the government to continue providing the level of service that South Australians expect and, if the honourable member is suggesting the profit should be returned to SA Water customers, which I understand he did on the radio and I think he might also have suggested again in his opening remarks, then it is incumbent on him not to just say, 'Oh, go and find them in savings. Go and find them because there might be some waste somewhere.' It is incumbent on him to tell us how he will compensate. Where are the savings that the Hon. Mr Brokenshire would like to give to the people of South Australia?

Members interjecting:

The Hon. I.K. HUNTER: Where are the savings that he might find in government enterprises? How is he going to cut the services that South Australians depend on so very much? Of course, the Hon. Mr Brokenshire will not tell you, just like the Liberal opposition will not tell you how they are going to do what they've—

Members interjecting:

The Hon. I.K. HUNTER: Mr Marshall goes on radio commenting on burst water mains, of all things—the Leader of the Opposition trotting out to the media on the topic of burst water mains. My goodness me! And what does he say? What does Mr Marshall say to the media? 'Oh dear, the government has been cutting back on maintenance of the pipe system.' Wrong, Mr Marshall. What was the government doing for the last three years with regard to investment on the part of SA Water in terms of maintenance of the pipe system?—$82 million a year over the last three years, going up to $129 million last year. Of course, if you know your ESCOSA briefing, you will know that that is projected to go up to $169 million on average over the next three years.

So we have been increasing our expenditure on the maintenance of our system, on the assets of SA Water. But what on earth is Mr Marshall going to do if he is saying that when the Liberal opposition is in government they are going to spend more of SA Water's dividend on asset maintenance? What is he going to cut? What is Mr Marshall going to cut or what taxes are going to be put up? That is what they will not tell you; their secret plans that they have got hatched, already written, will not be released. They will not tell the South Australian public what they intend—

Members interjecting:

The Hon. I.K. HUNTER: We do, Mr President, but they will not, and you know in your heart of hearts that they are going to cut, cut, cut into the services that South Australians depend on. The Liberals will cut them to pieces, and they will sack public servants. Let me remind honourable members what the former—

Members interjecting:

The PRESIDENT: Order! I have great difficulty in hearing the minister.

The Hon. I.K. HUNTER: —Liberal leader—

Members interjecting:

The PRESIDENT: Order!

The Hon. I.K. HUNTER: —said when she was speaking openly and honestly to the electorate of South Australia, unlike the current opposition. She told them, 'We will cut between 25,000 and 35,000 public servants; that's what we're going to do.' She let the cat out of the bag and she paid the price for that. I do not think her position was safe for very much longer after that—a matter of days in fact.

The Hon. R.L. BROKENSHIRE: Point of order. My point of order is the standing order regarding relevance.

The PRESIDENT: Sorry, I am having difficulty hearing you—

The Hon. R.L. BROKENSHIRE: I am waiting for an answer to my questions.

The PRESIDENT: The Hon. Mr Brokenshire, order! What is your point of order?

The Hon. R.L. BROKENSHIRE: Relevance, sir. I am not getting an answer.

The PRESIDENT: You have no point of order. Minister, you have the call.

The Hon. I.K. HUNTER: He has no relevance either, Mr President. Let me say this in response to a question asked by Mr Brokenshire. Halfway through his ramble he talked about the water security rebate that was put out by this government to help people when they had to pay increased water costs because of the desalination plant. That is what this Labor government does: it helps people who are suffering the cost-of-living prices and pressures. Of course, what we have done in this latest water-pricing deal is we have seen a nominal decrease in the price of water. We have also increased the concessions available to pensioners and eligible low-income earners and we have also managed to make sure that any future increases over the next three years in terms of the regulated time will be approximately CPI, or less.

It is this government that is concerned about the cost-of-living pressures the community faces. It is this government—and only a Labor government—that takes into account the key services that public servants provide to the community, and it will always be a Labor government that actually runs the Public Service in the interests of the state and in the interests of the community, and we will continue to do so.

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