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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2015-02-11 Daily Xml
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SA Water

The Hon. M.C. PARNELL (15:04): I seek leave to make a brief explanation before asking the Minister for Water and the River Murray a question about water and sewerage pricing.

Leave granted.

The Hon. M.C. PARNELL: Many South Australians in both urban and rural areas have made a conscious choice to be self-sufficient in relation to both water and waste. Many people have invested large sums in rainwater tanks, some people have put in composting toilets and others, on bigger properties, have put in reed beds for treating greywater. At present, these households continue to pay a water supply charge and full sewerage rates if the SA Water pipes go past their properties, even though these households are not connected. In effect, they are forced to pay for a service that they do not use.

Two weeks ago the Essential Services Commission of South Australia released its final report into its inquiry into options for SA Water's drinking water and sewerage pricing. Amongst the Essential Service Commissioner's findings and recommendations was the following:

Customers that choose not to connect to SA Water's network should not be required to pay a fixed charge to SA Water.

According to ESCOSA, removing these fixed charges would directly benefit approximately 26,000 South Australian customers who are paying for but not using SA Water services. I note that this approach to pricing utilities does not apply to telephone lines, electricity wires, gas pipes or even NBN cables—most services you only pay for those you use. My question to the minister is: will the government accept ESCOSA's recommendation to remove this cost burden from those South Australians who choose not to use SA Water's services?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (15:06): I thank the honourable member for his most important question. As most of us are aware now, SA Water falls under the economic regulation of the Essential Services Commission of South Australia. ESCOSA is responsible for determining SA Water's revenue. ESCOSA's first revenue determination was announced in May 2013, for those of you who can recall.

Importantly—and this deserves further airing in this place—for 2013-14, based on its first determination, the government was able to announce a decrease in water prices of 6.4 per cent and a commitment that prices will rise by no more than CPI for two years thereafter. Delivering those lower prices meant contributions to government were estimated to be reduced over the three-year regulatory period. For sewerage charges, country sewerage charges rose by 3.4 per cent, and we have ventilated those issues previously in this place, I think from questions from the Hon. Mr Brokenshire, if I recall.

It is also important to understand that there are very proper reasons, which have been supported in this place and the other place for the best part, I think, of 40, 50 or even more years, about rating on abutment. Rating on abutment recognises the shared public health benefits of sewerage connections and wastewater treatment.

I understand the issues raised by the Hon. Mr Parnell but I am surprised that he cherrypicks this one little issue, which is close to his heart, to ventilate in this place but he does not pick up the other recommendations that ESCOSA made which would have massive flow-on impacts and effects on the great majority of SA Water customers, increasing fixed costs to residents and increasing fixed costs overwhelmingly (in some places more than doubled) and overwhelmingly the impact will be on those who can least afford to pay for those increases. So you cannot have one and not the other. If the honourable member here wants to back the purest economic outlook which, rightly, ESCOSA has put in place to pursue, he also then needs to embrace all the other recommendations that ESCOSA came up with.

The Hon. M.C. Parnell: I cherrypicked this one; I like this one.

The Hon. I.K. HUNTER: He says he liked this one; he cherrypicked this one. Of course, he did, but there is an element to his thinking that I think he needs to evolve a little bit further on, because there are elements about social policy that come into this discussion which are not impacted by ESCOSA because that is not its role. It says quite clearly, 'Our role is to look at economic efficiency not social benefits—

The Hon. J.M.A. Lensink: You won't let them.

The Hon. I.K. HUNTER: —not any other benefits to society that are paid for through CSO.' Well, that is not its role.

The Hon. J.M.A. Lensink: You won't let them.

The Hon. I.K. HUNTER: They see themselves as taking an economic approach.

The Hon. J.M.A. Lensink: You won't let them. They're supposed to be an independent regulator, and you won't let them.

The Hon. I.K. HUNTER: That is their role and that is appropriate. It is also appropriate for us in this place and for the government to make decisions about social benefits and we do so and we say we will not be accepting that report of ESCOSA. It would, if implemented, have follow-on costs for the great bulk of SA Water customers. Those least able to pay would pay the great majority of those costs and I think, on reflection, most of us here would think that is unfair.

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