Water Charges

15 May 2013 archivespeech

This speech is in regards to the horrendous water pricing that has taken place in South Australia courtesy of this Rann-Weatherill Labor government.

The Hon. J.M.A. LENSINK (15:24): I rise to speak today about the horrendous water pricing that has taken place in South Australia courtesy of this Rann-Weatherill Labor government—whatever they happen to be calling themselves this week. I have always taken a keen interest in my utility bills. If we go back to 2002 when we used to have a two-tier pricing mechanism, we had this thing called excess water where, once you had exceeded your 120 kilolitres a year, you would go onto excess water. We now have three tiers and, for the basic one, the maximum is 30 kilolitres before you get bumped into the next range. The tier 1 or base price in 2002 was 38¢; it is currently $2.42. The top tier for excess water in 2002 was 92¢; it is now $3.73. The commercial rate is $3.45 per kilolitre, which is the highest in Australia.

We have also had changes to the fixed charge which, in 2002, was $1.25 and is now $293. These exorbitant prices are hurting all South Australians. When I was in Frome with our candidate, Kendall Jackson, last week, I heard that the sporting ovals are having trouble paying their bills, and we have industries such as the Clare wine grape growers who cannot afford to be viable if they have to pay $3,500 a megalitre.

The price setting is going to be interesting this year. This month we are due to have the ruling through ESCOSA, and I will predict—you have heard it here first—that the Premier will fiddle around with those figures so that he can give people a pre-election drop in their water rates. How is he going to do that? Well, I am glad you asked. There is a thing called the regulated rate of return on its regulatory asset base (RAB), and that is the fiddle that the Premier and Treasurer will work on because it is a number that they can change. That is rated against the proposed capital expenditure, which I also predict will drop in future years.

The reason that our water rates have gone up so much since 2008 is courtesy of the desalination plant. The thinking behind that—the rationale, the business case—was exposed very recently courtesy of the good work of Senator Simon Birmingham, and he referred this issue to the federal Auditor-General. What did he have to say about that? It failed the cost benefit test and the Auditor-General was highly critical. It has cost South Australian taxpayers $2 billion, and the two grants totalling $328 million were provided by the federal government. The reports states:

Neither of the Adelaide Desalination Plant grants awarded under the National Urban Water and Desalination Plan demonstrably satisfied the program merit criteria.

Infrastructure Australia rejected the expansion—which was clearly Labor's decision in 2009—as it did not demonstrate economic merit. So, we are all paying for this exorbitant desalination plant and will be paying for it for generations to come. We are also paying, as was exposed through the Budget and Finance Committee, some tens of millions of dollars per year for green energy. There have been some sort of bonus payments made to the consortium about which we will never know the details, and it has just been an unmitigated policy failure in terms of planning for the future.

It was predicated on this figure that we were going to have this massive expansion of our population, which we have now discovered is not going to take place. Water is one of the big challenges for our state's future. Managing a price that is fair for industry and for households and one that people can afford is going to be one of the big issues going into the future, and I look forward to the Liberal Party announcing what we are going to be doing to assist people with managing water into the future.