Water Industry Bill - Second Reading Speech - Wednesday 30 November 2011

Family First MLC Rob Brokenshire
has foreshadowed amendments
to the Water Industry Bill in 2012

The Hon. R.L. BROKENSHIRE (11:04): Firstly, I rise to advise the house that Family First will be supporting the principles of this bill. However, we intend to move some amendments in committee stage, which I understand will be early in the new year. The Water Industry Bill is an important bill, and I am hoping that it will pave the way to allowing more flexibility and more opportunity for third-party associations, corporations and the like to be able to utilise what has been a monopoly situation with SA Water pipes in the past. I hope we will see this develop into opportunities like those we have seen with multiple telco companies now as against the old monopoly of Telstra.


Water and expansion of population, economy
There is no doubt—and I am sure all colleagues would agree—that water is a key issue for all South Australians. It is an issue that will continue to need very good management into the future if we are to be able to continue food production the way that we all hope to and also be able to accommodate the government's Greater Adelaide plan over the next 30 years with respect to up to 500,000 more people coming into the state and needing water. Of course, we also see issues around mining expansion; mines are also quite high users of water.

Research has shown that stormwater
captured, recharged into aquifers, then
re-used with treatment years later
can supplement the water supply, as
the City of Salisbury have proven

Stormwater reuse and water recycling

There are opportunities where we can learn a lot. I commend the Salisbury council, and Colin Pitman in particular, for the way they have led the way with stormwater harvesting, aquifer storage and recovery. In the south in particular, the City of Onkaparinga has developed Water Proofing the South and other initiatives with quite a lot of money provided by the commonwealth. There are other smaller initiatives, one of which I was proud to have a lot of input into back in the mid-1990s. That was the opportunity through the now Willunga Basin Water Company, which buys bulk recycled water from SA Water at Christies Beach treatment plant and brings that through purple pipes into the Willunga Basin.



Clearly there are lots of avenues for expanding and re-using our water. When you consider that water from the Thames in England is used up to seven times before it goes to sea, I am sure we still have a lot to learn in South Australia, and indeed throughout the nation of Australia, with respect to better water usage.

The inefficient, inequitable "Save the Murray" Levy

I just want to touch on the Save the Murray levy. It will not be a surprise to the government. I have been critical of the Save the Murray levy for some time. I do not believe that it has delivered what it should have delivered. It is costing South Australian taxpayers about $24 million a year. We have seen a situation where there has been a change of responsibility, control and management now with the new Murray-Darling Basin Authority.



We have seen $13 billion provided by the commonwealth again since the Save the River Murray levy was first introduced. Given that a lot of that money is unspent and a lot is used for administration, I believe that there is an opportunity to not only remove the levy from those people who do not access River Murray water, as the Hon. David Ridgway, Leader of the Opposition in the Legislative Council just debated, but to remove this levy and start to give people some full taxation relief at a time when we all really do need it in South Australia.

Water pricing

We know that pricing is a big issue for water. The desalination plant is only further adding to that. There is no doubt now that people are as worried about water pricing as they are about electricity pricing. They are big on the agenda of all households in our state. We have the third-highest price for water of all states and territories, at about $2.30 a kilolitre. When you look at states like New South Wales, Western Australia and Tasmania, we know Tasmania has the advantage, but comparing New South Wales and Western Australia, where I would argue they do not have an advantage, they are at $1.96 a kilolitre in New South Wales and $1.64 in Western Australia.



As I said, water prices are rising. The government's decisions of late have indicated that we could see another 50 per cent increase, I understand, in water prices. Family First supports independent pricing, as exists, for instance, in New South Wales and Victoria, but with some controls which we think are the aim of the structure the government has developed through the pricing order regime. Our concerns as to just how effective that will be will come out in the questions I will ask during the committee stage, but certainly we do need to look closely at pricing structure.



I put on notice a question for the government; specifically: how will the pricing order structure work if it has been issued to ESCOSA, and what sanctions can they take if the pricing structure developed by ESCOSA is not in harmony with the pricing order? Is it like a veto?

Farmers and mains water use

I also want to touch on issues regarding farmers in particular. This exorbitant increase in water costs has had an impact and will have a continuing impact on all South Australians who utilise River Murray water, but it is having a significant impact in the Clare and Willunga basins for those who irrigate their vineyards and other horticulture with mains water.



Also impacted are dairy farmers and sheep and beef cattle graziers, especially in the Meningie area, where they have to use mains water for watering their stock, cleaning their feedlots, cleaning their dairies, and for all animal husbandry. I have had reports through the South Australian Dairy Farmers Association, of which I and my family are members, that some of these farmers are now seeing bills of over $100,000 a year for mains water. It is now the biggest expense on their farms, and is actually threatening the viability of their businesses, so I do intend to move some amendments to address that during the committee stage.

Rob Brokenshire believes farmers should be able to get access
to mains water at a reasonable price to produce food
(Photo courtesy of the Sunday Mail)

I want to see a principle of fairness for farmers. If we are to be serious and holistic in our approach as government and parliament, there is no doubt that we need to look at what imposts are prohibiting and inhibiting farmers from being able to produce the food we need for our state's consumption, for the nation's consumption, and for exports. I think all members would agree that, if we are now seeing figures of $100,000 or more for water bills, it is just unacceptable and completely puts those farmers out of any level playing field competition base with their counterparts in other states.



I believe that competition is an issue we really need to question and challenge during the committee stage. We will be moving an amendment regarding competition; I see that as an opportunity, with respect to the Water Industry Bill, and I know that the government will have concerns about their bottom-line return from SA Water. From memory, the net return to the government is well over $250 million a year; it is one of the biggest returns—next to ForestrySA and possibly the Lotteries Commission—that the government receives.



The Hon. S.G. Wade: Cash cows.



The Hon. R.L. BROKENSHIRE: As the Hon. Mr Wade said, it is a huge amount of money.

Competition and price fairness for householders, particularly low income earners

I know government needs to manage its budget but, now that this bill has been brought in, I think it is time that we have a look at how we can actually get more competition in and ensure that SA Water does not have a monopoly dictated to by Treasury, where there is just more and more by way of charges.

I talk to pensioners and people on low incomes, and they are telling me that they now get a water bill for $70, $80, or $90 and the actual amount of water that they utilise is less than or around $10; the rest of it is for fees, charges and management of infrastructure. They are noticing that now and talking about it in the community; therefore, I believe that we have a responsibility in this chamber to move amendments that may, down the track—I admit and acknowledge that it will not be overnight—through legislation allow legal opportunities for competition through those pipes in South Australia.

Family First certainly welcomes competition if it delivers cheaper water and fairer water billing for householders. We need to reduce our water consumption and, subject to some of the savings provisions about equity for pensioners, families, and regional communities, we believe a fairer pricing model is possible, either through the SA Water monopoly or through the involvement of monopolies and opening up that competition.



We have seen a sweetheart deal done this week with BHP Billiton. Yes, we did support this and want to see the success of that expansion, but when you consider that they are going to be using between 24 million and 42 million litres of water a day, and they are paying only $1,200 for that when we should be charging $88,000, we are able to accommodate the needs of BHP—one of the biggest mining companies in the world—yet we have this major negative impact on general householders' budgets.

Conclusion

In conclusion, this is a major bill for South Australia. I will be spending quite a bit of time in committee moving our own amendments, questioning the minister and listening to other colleagues who will have amendments as well, as has already been flagged by the Liberal Party so far. I would expect other amendments, possibly, from other parties and crossbench members.



I want to finish by saying that I appreciate minister Gago indicating that the government did want to get through second readings on this but was prepared to then look at amendments and the committee stage next year. I think that is a good move on behalf of the government. With the heavy workload that the Leader of the Government has in this house, she made the time to speak to some of us, I understand, to let us know that the government would accept that. I see that as good management of the house and I want to put on the public record my appreciation to the Leader of Government Business in this house.



It is important to get this right and look at all the options, particularly after this summer when water supply and retail issues become clearer. With those few remarks, I look forward to committee on this bill next year.


[NOTE: Debate on the Bill was later adjourned for consideration starting February 2012.  Family First will be moving amendments to the Bill at that time.]
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