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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-02-28 Daily Xml
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WATER INDUSTRY BILL

Committee Stage

In committee.

Clauses 1 to 3 passed.

Clause 4.

The Hon. D.W. RIDGWAY: I move:

Page 9, after line 25—Insert:

River Murray has the same meaning as in the River Murray Act 2003;

As members would be aware, recent dramatic price rises have impacted on sustainability of livestock farming across the state where the only water available is sourced from water pipelines. Farmers have been reporting that water costs are making sheep and cattle production unprofitable. We propose through this amendment, and two others (Nos 9 and 12), a scheme where livestock producers could purchase a River Murray water access entitlement, and purchase the delivery only from SA Water. The amendments would also restrict the cost of service to 50 per cent of the price charged for industrial water by SA Water. This is to allow the same meaning for 'the River Murray' as in the River Murray Act 2003, so it will allow producers to purchase water from the River Murray.

The Hon. I.K. HUNTER: The government opposes the amendment. As the honourable member says, it relates to amendment Nos 9 and 12 which provide for a subsidy for livestock. I will go to some of the points now prior to getting to amendment Nos 9 and 12. The government understands the issues that have given rise to these amendments but we do not believe this is the most appropriate way to deal with them.

Firstly, these amendments would provide a significant subsidy to livestock producers at the cost of increasing prices to all other consumers. The scheme seeks to limit the delivery price to 50 per cent of the prevailing commercial water price in metropolitan Adelaide. There would also be no contribution from livestock producers for the fixed cost or any other variable costs associated with constructing, maintaining and managing the water supply network.

Furthermore, while the amendments envisage the livestock producers paying for their own River Murray water for delivery, the producers will remain connected to SA Water's infrastructure. This means that SA Water would still be required to secure sufficient water supplies to provide security for all customers, but the cost of providing that security would not be borne by those livestock producers who take advantage of the access scheme. This is hardly a fair arrangement.

To put some numbers around these amendments, SA Water has undertaken calculations around the associated costs in relation to the top 500 Country Lands customers who use approximately five gigalitres per annum. Unless separately funded from the state budget, the cost of the proposed scheme will require an additional impost of $22 on every other water user's bill—primarily the bills of residential users. Again, this is unfair, conflicts with the National Water Initiative pricing principles and goes against the intent of the legislation. The government opposes the amendments.

The Hon. M. PARNELL: The Greens oppose this amendment as well. Without being too flippant, it is sort of happy hour for cattle with half price drinks year-round. For the reasons that the minister has outlined in relation to the extra impost on other water users, I do not think that this does lead to the most efficient allocation of these scarce potable water resources, so we oppose the amendment.

The Hon. A. BRESSINGTON: That was $22 per household per annum extra that would be added to their costs?

The Hon. I.K. HUNTER: My advice is $22 on every other water user's bill per annum.

Amendment negatived; clause passed.

Clause 5.

The Hon. D.W. RIDGWAY: I move:

Clause 5, page 12, after line 21—Insert:

(3a) Parts 4 and 8 of this Act do not apply in relation to—

(a) a Community Waste Water Management System operated by a council, or a subsidiary of a council; or

(b) a retail service that is constituted solely for the supply of non-potable water.

(3b) In connection with subsection (3a), a council, subsidiary or person who provides a service referred to in that section will, subject to any provisions made by the regulations, be taken to be a water industry entity for the purposes of the other Parts of this Act.

The bill establishes a licensing and regulatory scheme which applies to any retail service which is defined as a service selling water from a reticulated system or sale and supply of sewerage services with the ability to exclude services by regulation.

The opposition accepts the regulatory role as applied to essential services (potable water supply) but fails to accept that a non-potable supply such as that provided by the Salisbury council stormwater recycling scheme needs to be regulated. I note the comments from the Hon. Mark Parnell that he thought in the last amendment it would be an unreasonable impost on the consumers of potable water. We are now talking about non-potable water.

Similarly, the local government sector has raised concerns regarding the added layer of red tape imposed on them by requiring the licensing to operate their Community Wastewater Management Systems (formerly STEDS). They will continue to be subject to an ongoing Department of Health and EPA licensing and oversight, irrespective of being licensed under this new regime.

This amendment seeks to exclude such councils from those Community Wastewater Management Schemes and non-potable water supply systems from the licensing and enforcement parts of this act (parts 4 and 8). This is about the community wastewater schemes operated by your local government and also non-potable water. The opposition reluctantly accepts that we will not get some of these amendments up because we are talking about potable water, but this is non-potable water. The opposition is strongly of the view that the non-potable water and the Community Wastewater Management Schemes should not come under this new regime.

The Hon. I.K. HUNTER: I understand the opposition wants to exempt, by this amendment, Community Wastewater Management Schemes from the requirements of this legislation. This seems quite contrary to various opposition statements in the House of Assembly which recognise the need to regulate essential services. I think most South Australians would regard community wastewater management systems as an essential service. The Local Government Association estimates approximately 200,000 people, or over 10 per cent of the state's population, are served by these schemes, and this number is increasing as the government continues to support the installation of new schemes across the state.

Some level of consumer protection is appropriate for these essential services, we would submit. This is why we have deemed it necessary to cover these services in this bill. However, ESCOSA will take into account the nature of the entity in determining the appropriate level of regulation and can be expected to adopt a light-handed approach to small community wastewater management systems.

This is consistent with the requirements of the Essential Services Commission Act 2002 under which ESCOSA is required to have regard to the financial viability of regulated industries as well as to the competition and efficiency of those industries. For example, in its Statement of Issues and draft advice on the economic regulation of the water industry, ESCOSA has foreshadowed light-handed regulation of entities and services other than those run by SA Water.

On the issue of non-potable water, the government is at a loss to understand the rationale of the opposition in proposing this amendment. It would appear to be proposed on the basis that non-potable water does not constitute an essential service. However, this is clearly not the case. I note and am advised that, in respect of some rural towns, their supply from SA Water is only non-potable water and it is still essential.

The Hon. D.W. RIDGWAY: I have a question of the minister while I am moving the amendment: are towns where non-potable water is supplied still subject to the same fees and charges as supplies of potable water?

The Hon. I.K. HUNTER: I do not have that advice to hand, so I will need to take that question on notice.

The Hon. M. PARNELL: Just a question of the minister: in your response to the Hon. David Ridgway's question, you referred to the approach that ESCOSA is expected to take. You said that they would be 'light-handed'. I apologise if you have answered this and I was distracted, but can you give any indication on what level of licence fee, for example, or administrative burden might comprise this notion of being light handed? I am trying to work out what it means.

The Hon. I.K. HUNTER: My advice in response to this approach is to go to ESCOSA's draft advice, and I will quote them. They state:

While there are a large number of entities other than SA Water involved in the provision of drinking water and sewerage services in South Australia, many of those operations are small in scale and undertaken by Local Government or private enterprises...The Commission is...of the view that the regulation of these entities should be based initially on a 'light-handed' approach, involving a price monitoring/pricing principles.

I understand that is on page 96 of their draft advice. The commission goes on to say:

Under this approach, the Commission would develop a set of pricing principles to which the entities would be required to have regard when developing their prices. The Commission would also require the entities to publish their prices, and provide a statement demonstrating how the Commission's pricing principles have been applied in determining those prices.

The Hon. M. PARNELL: I thank the minister for the answer. In relation to this bill, there have not been many constituents who have contacted me but, certainly, the Local Government Association has, and it has expressed some concerns about the extra level of regulation that it sees would come from having it bound by parts 4 and 8, I think it is, of the bill, part 4 being the licensing arrangement and part 8 being the enforcement arrangement.

What the Greens have been grappling with—and we do not want to see unnecessary regulation—is that it would seem to me that, in the absence of requiring these local council schemes, or even non-potable schemes run by anyone, and in the absence of part 4 applying, there would be no ability to regulate in the sense of, for example, compliance with hardship provisions or a range of other things that are part of conditions of licence. If you do not have to have a licence, you do not have to comply with licence conditions because you do not have any because you haven't got a licence.

It seems to me that, if we are serious about reform of the water industry, one of the things that we will probably need to do is be a bit smarter in the way we allocate water resources to appropriate uses. For example, it has never made sense to me that we use some of the highest quality potable water for what are really secondary uses. We flush our toilets with it, for example. If you had a purple pipe system, presumably, you would flush your toilet with second-grade water that is not potable.

It would seem to me that if, for example, you had such a scheme—you had a parallel system of pipes coming into your house, a drinking water pipe and a purple pipe for, for example, the garden and flushing the toilets—it would seem that you would have some protection that comes from the licensing regime for the drinking water but you would not have that same level of protection for the second-grade water. Can I ask the minister to respond to that? Am I correct that, in the absence of licensing, some of those consumer protection measures for purple pipe water, if I can call it that, will not apply?

The Hon. I.K. HUNTER: My advice is: yes, the Hon. Mr Parnell is correct. Can I say with regard to the other issue that the Hon. Mr Parnell spoke on that the government is willing to entertain an amendment to clause 25, which would make ESCOSA have regard to the size and nature in settling licence conditions, and that amendment is being drafted as we speak.

The Hon. A. BRESSINGTON: I would like to ask the minister if he can explain in as simple terms as possible the impact that this would have on, say, the Salisbury council and its water catchment, and how it is distributing its water now and the purposes that it is being used for? That is probably one of the most successful alternative non-potable water sources that we have in this state.

The Hon. I.K. HUNTER: My advice, in relation to the Salisbury council, which is the hypothetical the Hon. Ms Bressington raises, is that they would be required to have a licence and to abide by the conditions (light-handed conditions) set by ESCOSA. ESCOSA is keen to encourage competition, so it would follow that those conditions would not be burdensome.

The Hon. D.W. RIDGWAY: What would be the financial burdens placed on the Salisbury council under this proposed new licensing regime?

The Hon. I.K. HUNTER: My advice is that the bulk of licences will be paid for by SA Water. So, the impact on, for example, the Salisbury council, would be quite modest.

The Hon. D.W. RIDGWAY: Can you quantify 'modest'? If the licences are paid for by SA Water, presumably it will pass that on to consumers. So, what is the actual cost that we are talking about?

The Hon. I.K. HUNTER: I cannot give the honourable member dollar figures, but I can come back with that advice at a later stage.

The Hon. D.W. RIDGWAY: My understanding is that the community wastewater management schemes already have Department for Health and Ageing and EPA licensing and oversight of their operations. The opposition is concerned that this new regime is adding another level of bureaucracy, another layer of regulation, when they are already operating in our community.

Salisbury has been very successful with stormwater recycling; in fact, I am sure the minister and his Labor Party colleagues have been out there championing its cause. The community wastewater management schemes, formerly the STED schemes, operate all over the state perfectly well now. Why do we need another level of regulation and licensing over the top of them? I indicate that I will be dividing on this when we have a chance to do so because I think this is a fundamental problem.

We seem to be continually making laws in this place that we do not actually need. We already have the systems operating, I do not believe there is any public safety or health risks, yet for some reason this government thinks fit to put another layer of bureaucracy over the top. It is the cost of it. People in our community are screaming out at the moment at the cost of living and this government wants to put another level of regulation over a system that already works very well.

The Hon. I.K. HUNTER: My advice is that the other schemes the honourable member spoke about do not encompass consumer protection. Are you saying to me that we should not have consumer protection built into the legislation? The question you have to ask is: if we licence SA Water to provide these services, why would we not licence the other providers at the same time so that they compete on a level playing field?

The Hon. M. PARNELL: Further to what the minister was saying, one thing the Greens are concerned about is that we make sure that consumer protection measures apply to water customers, whether they be water customers buying drinking water from SA Water or whether they are water customers buying second grade water from some other source. When I say consumer protection, I am talking about things like arbitrary disconnection for non-payment of a bill. Certainly, it would be unacceptable for the drinking water out of your kitchen tap to be cut off because you were a day late paying your bill—that would be unacceptable.

People might think that if your purple pipe water—if I can use that analogy—is cut off then maybe your plants might die but it will not be as dire as not being able to drink, cook and wash. It seems to me that if we are serious about a new regime for water that has more separation, I would expect there would be more entities, whether they be local councils, private companies, or whatever, in the market for non-potable water, and I think the customers of those water services will require some level of protection.

The level of protection that is before us is licensing. Basically, what the act provides is that you cannot retail this water unless you have a licence and a condition of your licence will be consumer protection measures. So, it seems that a consequence of supporting the Liberal amendment is to effectively prevent customers of non-potable or council excess wastewater having rights as consumers. That, I think, is the bottom line. With that brief contribution, the Greens will not be supporting this amendment.

The Hon. D.W. RIDGWAY: I certainly do not want to ask questions of the Greens, but, given that these operations are subject to ongoing Department of Health and EPA licensing and oversight, even for the people who might use excess water from a community wastewater management scheme, I am at a loss to see why we need another level again.

The Hon. M. PARNELL: I am happy to answer the question. I want the EPA and the health department to keep the water safe so that it is not full of toxins and all sorts of pathogens so that when you are watering your roses you are not contracting cholera. I want proper authorities to manage that. What I am saying is that there is an extra level of protection that is outside the domain of the EPA or the health department and that is in relation to unfair contracts, for example, and consumer protection in terms of pricing mechanisms.

If they are part of the regulatory regime they are part of the protection regime. If we exempt them from the licensing part of the act and the enforcement part of the act enabled to respond to them behaving badly, I think that we are effectively letting down future customers. What we do not know, of course, is how many people will be caught by this. We know that 95 per cent, probably, of customers we are talking about are going to be customers of effectively what is almost a monopoly supplier of water, that is, SA Water.

We are talking about a small number of other services, which the minister has assured us will be managed in a light-handed manner but, in future, I imagine that more entities will enter the market for selling second-grade water, and I think it is important for us—

The Hon. D.W. Ridgway interjecting:

The Hon. M. PARNELL: No, well, second-grade water, I mean—not potable water. But I think that those consumers are also deserving of protection measures, and I think that is reason enough to keep them within the scope of the bill. However, I do accept the minister's assurance that the imposition will not be burdensome.

The committee divided on the amendment:

AYES (8)
Bressington, A. Dawkins, J.S.L. Lee, J.S.
Lensink, J.M.A. Lucas, R.I. Ridgway, D.W. (teller)
Stephens, T.J. Wade, S.G.
NOES (13)
Brokenshire, R.L. Darley, J.A. Finnigan, B.V.
Franks, T.A. Gago, G.E. Gazzola, J.M.
Hood, D.G.E. Hunter, I.K. (teller) Kandelaars, G.A.
Parnell, M. Vincent, K.L. Wortley, R.P.
Zollo, C.

Majority of five for the noes.

Amendment thus negatived; clause passed.

Clauses 6 to 8 passed.

Clause 9.

The Hon. D.W. RIDGWAY: I move:

Page 15, line 14—Delete 'or conferred by regulation under this Act'

This clause establishes the functions of the technical regulator and includes a subclause allowing further functions to be assigned by regulation. Effectively, this amendment deletes the power and reasserts the sovereignty of the parliament to make law.

The Hon. I.K. HUNTER: The government does not support this amendment. The intent of clause 9(d) is to retain the flexibility to adapt to future requirements if needed. In this respect, the proposed amendment removes the government's ability to extend the technical regulator's function by regulation.

The Hon. M. PARNELL: When looking at clause 9, it would be no surprise to members that the primary function of the technical regulator is to develop technical standards, and it is pretty hard to see that they would do much more than that. It goes on—they have to monitor and regulate technical standards and they can provide advice about technical standards—but I would be very surprised if it would be deemed suitable to give them any role other than a technical role.

Nevertheless, I think that subclause (d), which is the subclause that the Liberal amendment seeks to amend, is pretty much a safety net, where it says 'any other function assigned to the Technical Regulator under this or any other Act or conferred by regulation'. I would be surprised if the government would want to give the technical regulator much other power, but I can understand their desire for a safety net.

Can I ask the minister to put on the record whether he envisages any situation, other than technical matters, that might be referred to the technical regulator. In other words, what work, if any, can the minister identify at this point that might be required to be added to the technical regulator's functions by regulation?

The Hon. I.K. HUNTER: No other functions will be conferred on the technical regulator, I am advised. The provision is in place should the role be expanded statewide. That is what it is there for.

The Hon. M. PARNELL: In light of the minister's answer, the Greens will not be supporting the Liberal amendment. We are happy to trust that the government, having this power to add to the technical regulator's functions by regulation, would only use it in an appropriate manner that relates to technical standards or, as he said, if there are some fundamental changes later, in which case I am sure we will have the act back before us again if the changes are of such a fundamental nature.

The Hon. J.A. DARLEY: I will not be supporting the amendment.

Amendment negatived; clause passed.

Clause 10.

The Hon. D.W. RIDGWAY: I move:

Page 15, lines 20 and 21—Delete subclause (2)

Subclause (2) provides that delegation is:

A function or power delegated under this section may, if the instrument of delegation so provides, be further delegated.

This is a technical amendment that would prevent the delegation from being redelegated, requiring the initial delegation to be revoked and then a new delegation issued. We think this is a better way to keep track of the delegations. The opposition cannot really understand how a function or power delegated under this section, if the instrument of delegation so provides, be further delegated. It seems like a continual buck-passing or responsibility shifting down the chain, so we would like to see that deleted.

The Hon. I.K. HUNTER: Let me try to assist the opposition and explain this clause. The amendment seeks to remove the ability to subdelegate the functions of the technical regulator, as the Leader of the Opposition has said. Accepting this amendment would create some additional administrative burden on the technical regulator, particularly if its role is expanded to areas of the state where another technical regulator—for example, health—already provides that regulation. We would look to apply that regulation to another organisation rather than repeat the infrastructure that they already provide. In these areas, I understand, subdelegation is common practice and, therefore, we do not support the honourable member's amendment.

The Hon. M. PARNELL: I note that part of the honourable mover's intention in relation to this amendment is to keep track of delegations. It seems to me that there is an adequate provision in clause 10 already to keep track, and that is subclause (4), which provides:

The technical regulator must keep a public register of delegations under this section.

So, it will be pretty clear at any time who is being primarily delegated and then subdelegates under that. I think it is not a good enough reason to remove that clause. I think the minister is correct that in these sorts of areas subdelegations are common. We will know who the subdelegates are, and if they are inappropriate, we will raise it in appropriate forums such as this parliament. I will not be supporting the amendment.

The Hon. R.L. BROKENSHIRE: In deliberating, can the mover of the amendment try to articulate a little clearer the concern that he has whereby he wants to remove that particular section of the clause?

The Hon. D.W. RIDGWAY: Subclause (4) provides that the technical regulator must keep a register of delegations under this section. It just seems burdensome that we can have this ongoing subsigning of delegation powers. The technical regulator has a delegate—that is fine—but if you can reassign the delegation to somebody else it tends to create a whole range of people who can be delegates of the regulator and, of course, it is another administrative burden having a technical regulator keep a register of these delegations.

The Hon. I.K. HUNTER: If I can assist once more. This is not adding an increased layer of burden, it is to make it easier. Where there is technical regulation already applied by another agency such as Health we may seek, if the role is expanded to those areas in the state, to make Health do that work rather than set up another layer of bureaucracy.

Amendment negatived; clause passed.

Clause 11 passed.

Clause 12.

The Hon. D.W. RIDGWAY: I move:

Page 16, after line 30—Insert:

(2a) However, before the Technical Regulator takes steps to disclose information under subsection (2)(a), (b) or (c), the Technical Regulator must—

(a) take reasonable steps to consult with the person who gave the information; and

(b) take into account any views expressed by the person who gave the information as a result of any consultation undertaken under paragraph (a).

The insertion of new subclause (a) into clause 12 tightens up the part of the act which allows the technical regulator to disclose information even though it may have been given in confidence. The government indicated in the House of Assembly that it would confer the consideration of this proposal and the opposition certainly believed this was an important amendment. It does, if you like, add a further level of protection to confidential information that may have been given to the technical regulator.

The Hon. I.K. HUNTER: The government opposes the amendment. My advice is that it is because it would create ambiguity and uncertainty; it would cause delays in addressing important safety matters, and my advice is that it is generally unworkable.

The example is given that in a case where defective or dangerous work is under investigation by the technical regulator, the amendment would require the individual or company concerned to be consulted before any information is provided to the relevant authority and possible disciplinary proceedings. This would add a further procedural step before disciplinary proceedings can commence. This could prolong the time in which defective and dangerous work continues to be performed.

The amendment also creates uncertainty as to what information requires consultation before it may be disclosed. For example, consider the hypothetical situation where an interstate regulator was to advise a technical regulator of a dangerous practice in its jurisdiction, and ask if such practices had been found in South Australia. If the technical regulator knew of such a case involving a person, it is unclear whether the technical regulator would need to consult that person before disclosing the fact that the practice occurred.

Information-sharing is a common practice between state regulators and contributes to improving safety and technical standards. It is also not clear from this amendment if the technical regulator must consult with persons before routine information can be aggregated and provided to persons and agencies referred to in clause 12(2a) through to (c) of the bill. It is even possible that, as a result of the amendment, consultation would be required with respect to some types of information in the technical regulator's annual report. For these reasons the government opposes the amendment.

The Hon. M. PARNELL: It is difficult to see how the opposition's amendment would work in practice and why it is logical, because the types of people that the technical regulator may disclose confidential information to are other regulators. There are government agencies and others—it is not Joe Blow down the street; it is law enforcement bodies of the state or commonwealth.

The idea that the technical regulator should go to the person who has been found to have done the wrong thing, point out to them that they have done the wrong thing and ask them whether they mind that information being passed on to a law enforcement agency, and giving them an opportunity to say why that information should not be passed on, I am not familiar with any precedents for that type of approach. Certainly, police officers, as a rule, having pulled you over for speeding—not that it happens to me, but if it were to happen, and friends of mine who it has happened to—are unlikely to enter into a dialogue about whether or not you have been speeding; they tend to just proceed with it.

I know we are talking about confidential information but it seems to me that what the opposition's amendment is seeking to do is to make it more difficult for the technical regulator to give to people who have an interest in receiving it, important information that will lead to the proper administration of these laws and proper administration of safety standards. It makes no sense to me that those extra hurdles should be put in the way of the technical regulator. So the Greens will not be supporting this amendment.

The Hon. R.L. BROKENSHIRE: Further to what my colleague has just raised, I ask the mover the purpose of moving this amendment: are you concerned that people will not disclose information to the technical regulator? What is the intent of moving the amendment, the specific intent?

The Hon. D.W. RIDGWAY: This tightens up the part of the act which allows a technical regulator to disclose information even though it may have been in confidence. The opposition believes that it is a worthwhile amendment. It allows for that information to be shared, if possible, for reasonable steps to be taken to consult with the person who gave that information and to take into account any views expressed by the person who gave that information as a result of the consultation undertaken under paragraph (a). We think it enhances the bill but, clearly, members have their own view. If they do not support it, they do not support it.

Amendment negatived; clause passed.

Clauses 13 to 17 passed.

Clause 18.

The Hon. D.W. RIDGWAY: I move:

Page 18, lines 17 and 18—Delete ',suspended or cancelled' and substitute:

or cancelled (but may be suspended by the Commission under this Act)

The bill proposes that SA Water must be given a licence under the terms dictated by the minister, and the licence cannot be cancelled or suspended by the commission. The opposition argues that if the commission is unable to even suspend SA Water's licence then very little pressure can be applied to force conformity to the regulatory regime.

The Hon. I.K. HUNTER: The government does not support the amendment. The South Australian Water Corporation is established and given its functions by an act of parliament, the South Australian Water Corporation Act 1994. It provides services to over 90 percent of South Australia's population. It is therefore odd to propose that a body which is not directly accountable to either the parliament or the community should have the authority to suspend SA Water's licence and effectively leave the community without water or wastewater services. This is not a slight on ESCOSA—it is a very competent organisation—however, ESCOSA should not be put in a position where either it is obliged or it has the option to take such significant action on its own authority.

The Hon. M. PARNELL: SA Water is in a particularly significant position, not just for the reasons that the minister has outlined. It is effectively—certainly for metropolitan Adelaide—pretty much a monopoly provider of everyone's water, and certainly everyone's sewerage services as well. The concept of its licence being cancelled or suspended so that it is no longer allowed to deliver water and no longer allowed to take away our waste does not warrant thinking about, but it does raise the question—and I think the honourable member has a good point here—what response is there when it does something wrong?

The answer might be that there would be financial penalties, but we are talking about giving with one hand and taking away with the other. You can fine a publicly owned entity as many millions of dollars as you want and it will just go in and out of general revenue. It will not have much of an impact. However, I do not see any way around it, given the position that SA Water is in. We hear about banks that are too big to fail; SA Water is too big to shut down. So, I think that it does make sense to give the community that security in legislation, to say, 'Whatever it does and whatever it does wrong, we're not going to turn off the taps or the pumps at Bolívar.

The Hon. R.L. BROKENSHIRE: I see what the opposition is trying to do, but I agree with the Hon. Mark Parnell that a very concerning situation would be created if SA Water was not able to provide potable water or, indeed, manage sewerage systems because of breaches of conditions. I ask the minister: are there any penalties or protections in place to put pressure on SA Water if it does err? I struggle to support the opposition's amendment, but I do see that it has a valid point to bring before the parliament. What is the structure to ensure that SA Water complies?

The Hon. I.K. HUNTER: The thing we are obviously aware of, but which bears repeating, is that SA Water's performance is, and will continue to be, subject to greater oversight than any other water industry entity, in the form, for example, of ministerial control and direction, scrutiny by the parliament and its committees (for instance, the Public Works Committee) and oversight by the Auditor-General.

SA Water also comes under the jurisdiction of the state Ombudsman and is subject to the Freedom of Information Act 1991. Should SA Water's performance be lagging, it is rightly a matter for the government of the day and for the parliament to take up that issue. In any case, SA Water will still need to comply with the water industry legislation in the same way as any other water industry entity.

Amendment negatived.

The Hon. D.W. RIDGWAY: I move:

Page 18, after line 18—Insert:

(6) In connection with the operation of this section—

(a) the minister must establish a set of community service obligations that require SA Water to continue to provide services within those areas of the state in which services are provided immediately before the commencement of subsection (2) unless the minister grants an approval for the discontinuance of any such service; and

(b) if the minister grants an approval under paragraph (a), the minister must immediately prepare a report in relation to the matter and cause copies of the report to be laid before both houses of parliament within six sitting days after the approval is given.

This amendment is to protect isolated communities that currently receive a service from SA Water. The clause simply obliges SA Water to continue to provide such a service as a community service obligation unless the minister approves discontinuance, in which case he or she must provide a report to both houses. Again, I think the government indicated that it would consider the sentiment of this proposal between the houses, and I hope it has given this favourable consideration.

The Hon. I.K. HUNTER: This is one of those rare instances where the government and the opposition are in broad agreement; however, the government will not support the amendment. The government agrees that there should be safeguards in place to ensure continuity of supply for existing consumers. However, we believe this objective is best met through the existing mechanisms in place in the bill and other legislation.

For example, clause 25(1)(o) of the bill requires a water industry entity to comply with the requirements of the scheme funded by the minister for the performance of community service obligations. The minister can also direct SA Water to provide services to these customers under section 6 of the Public Corporations Act 1993. This direction must be published in the Gazette and tabled in parliament.

If the provision of service to these areas results in a financial loss to SA Water then it is expected that the government community service obligation would apply. CSO payments provided to SA Water are published annually as part of the National Water Commission's national performance reporting process. ESCOSA will also make this information available on its website. We believe that these arrangements are more flexible and more transparent than the proposed amendment and thus urge the chamber to reject the amendment.

The Hon. M. PARNELL: I am going to test the opposition a little bit with some questions on this clause, if I may. I call this clause 'the ghost town' clause. We know that a number of remote rural communities have often struggled over time; maybe their resource base diminishes, the hospital closes, then the school goes, then the banks go, then the general store goes, and I think one of the questions this amendment invites us to consider is: when does the water go? What are the circumstances in which SA Water would be entitled to say, 'Look, this once vibrant community is now effectively a ghost town and there are only a handful of customers left. It is not worth us supplying them with mains water'?

The amendment talks about communities that are being provided with services now, and the community service obligation is that they have to be provided with services in the future. My question is: need they be the same services? In other words, if the service that is being provided now is piped water to your house, could the minister say, 'Okay, we are going to turn that off and we are going to give you all rainwater tanks'? Would that fit within the scope of your amendment?

The Hon. D.W. RIDGWAY: If you were in an area of the state where it rained often enough to get adequate rainwater. This amendment does not say the minister cannot discontinue a service: it just requires the minister to provide a report to the parliament to say that they have cut off the water to the little town that, sadly, under a decade or more of Labor government has had its hospital closed and its school closed and people have moved out of the town, only three people are left and they are going to cut off the supply.

All it requires is the minister to say, 'We have managed the economy so badly that, in the end, this town has to close, and we are cutting off the water supply to the three people who remain living there.' We are not necessarily saying the minister is wrong in discontinuing the supply. We just think the minister should provide a report to the parliament to indicate why they have cut off the supply to that particular town.

The Hon. R.L. BROKENSHIRE: I advise the committee that Family First will be supporting the Liberal Party with this amendment. We need as many checks and balances as we can get in regional and rural South Australia to protect and support taxpayers and residents of this state who have a lot of adverse situations before them that are out of their control.

We have seen examples in country health, with the closure of country hospitals and cuts in funding to the Keith, Moonta and Ardrossan hospitals. I believe the more checks and balances that we can put in to protect those people the better, and the government should not feel afraid of this amendment as a further check and balance to ensure that there is equity in the provision of potable water in this state, so we will be supporting the Liberal Party.

The Hon. M. PARNELL: I would like to get the minister's response to the analysis that the Hon. David Ridgway gave. If the effect of this amendment is not much more than requiring the minister to prepare community service obligations—which the minister said are already required elsewhere, so it is duplication but there is no extra work—and if the only real impost on the government is to tell the parliament when it is proposing to change the water arrangements in an existing serviced area, surely that is not such an impost; in which case, why is the government maintaining its opposition to the amendment?

The Hon. I.K. HUNTER: I am going to have to get some further advice about that. I might propose, if honourable members are agreeable, that we report progress on this and I can come back with some further advice to the chamber.

Progress reported; committee to sit again.

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