Water Charges

 I seek leave to make a brief explanation before directing a question to the Minister for Water on the subject of ESCOSA's pricing calculations.

The Hon. J.M.A. LENSINK: ESCOSA has revealed that the federal government's carbon tax and this government's renewable energy premium have increased SA Water costs by some $58.3 million over three years. In its document, SA Water's Water and Sewerage Revenues: 2013-14 to 2015-16, it states, in relation to the desalination plant:

...the cost of the renewable energy premium (Above the cost of [so-called] 'black' energy) is $43.7million...across the initial regulatory period...

This report also reveals that the cost of Labor's carbon tax on SA Water's operations is $14.6 million on top of the $43.7 million. My questions to the minister are:

1.Will he confirm that since the desalination plant was announced the government will receive $1.3 billion from households due to water price rises?

2.Does he concede that the extra $44 million his government will spend to buy 100 per cent green energy at the desalination plant would have been better spent providing relief to households?

3.Does he concede that the $15 million cost of the carbon tax to SA Water would have been better spent providing relief to households?

4.Why does his government continue to support the federal government's carbon tax when his counterpart in WA, Labor opposition leader Mark McGowan, does not?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (14:31): I thank the honourable member for her most important question. I must admit that I am very surprised to hear that the honourable member puts herself into the camp of climate change deniers who are out there in her party and seem to be controlling the agenda of their party policy. You have to hand it to these guys: they look at all the scientific evidence in the world—97 per cent of which says climate change is real, that governments and societies have to address these issues—and they latch on to the 3 per cent who agree with their position. That is science in the Liberal Party, and I do not think there is anything we can do to help them with that.

The Hon. D.W. Ridgway: Coming from a bloke that takes valium to go outside the city limits—

The Hon. I.K. HUNTER: I take valium to actually spend time with you, Mr Ridgway, but I think that most people would need to.

The PRESIDENT: Order!

Members interjecting:

The PRESIDENT: Order!

The Hon. I.K. HUNTER: On 1 January 2013—

Members interjecting:

The PRESIDENT: Order!

The Hon. D.W. Ridgway: I don't want to be in the room with somebody taking drugs. Can we have his water tested, Mr President; I wonder what he's on!

The Hon. I.K. HUNTER: It's good desal water, Mr Ridgway. Like all of us—

Members interjecting:

The Hon. I.K. HUNTER: No, no, desal is working and pumping into the system right now, and you are drinking it at this very minute.

Members interjecting:

The PRESIDENT: Order!

The Hon. I.K. HUNTER: On 1 January 2013—

The Hon. J.S.L. Dawkins interjecting:

The PRESIDENT: The Hon. Mr Dawkins will not incite the house again.

The Hon. I.K. HUNTER: —the Essential Services Commission of South Australia commenced its role as an economic regulator of the water industry in this state. As part of the role, the commission released its final revenue determination for SA Water for the amount of revenue that can be recovered for its drinking water and sewerage services on 27 May 2013. This follows a draft determination released on 7 February and subsequent public consultation.

This now means the price of water for the next three years will increase no more than CPI, providing customers with a period of stability. I am pleased to advise that this year the combined effect of a reduction in water prices, and the absence of the water rebate, means that most households will experience a small increase in their total water bill, but less than CPI, we expect. The price of water will be cheaper in the coming year and for the following two years will not increase any more than CPI.

The average metropolitan household uses about 190 kilolitres of water per year, I am advised, so including a typical sewerage bill would pay approximately $1,270 next financial year. Eligible low income earners and pensioners will also experience a small decrease in their total water bill as a result of the state government increasing the concession available by at least $30. This is a good outcome for South Australians. This government advised that last year's price rise was expected to be the last significant increase and was part of the significant investment to ensure South Australia's water security.

The new residential water prices for the 2013-14 financial year are: a quarterly supply charge of $274.80, a decrease of $18 or 6.2 per cent; $2.26 per kilolitre for water use for the first 30 kilolitres per quarter, a decrease of 6.6 per cent on 2012-13 prices; $3.23 per kilolitre for water use from 30 to 130 kilolitres per quarter, a decrease of 6.4 per cent on 2012-13 prices; and, $3.49 per kilolitre for water used for greater than 130 kilolitres per quarter, a decrease of 6.4 per cent on 2012-13 prices.

Prices are set by taking into account a large range of factors, including the cost to deliver, maintain and enhance the provision of water and sewerage services. Prices in South Australia are also guided by the pricing principles outlined by the National Water Initiative and the South Australian government's commitment to statewide pricing. The state government makes a community services obligation payment to SA Water so that customers in regional areas pay the same for water as city customers, even though it costs more to supply drinking water to regional areas.

Sewerage charges are based on the value of the property as determined by the Valuer-General. Sewerage charges are yet to be finalised with the rate in the dollar to be announced in late June, I am advised, after finalisation of property values for 2013 by the Valuer-General. Sewerage charges contribute to works to improve wastewater treatment processes, infrastructure and wastewater re-use projects.

Sewerage charges will increase on average by 1.6 per cent for metropolitan SA Water customers with an average increase of 2.1 per cent for country customers. The minimum quarterly sewerage charge will increase by 1.6 per cent and will be $85.35 per quarter.

SA Water does not receive any windfall gains from increases in property values. This is because the rate in the dollar is adjusted to ensure the required level of revenue is achieved. Increases incurred by individual customers may be affected by any variation in the movement of their property valuations, of course, relative to the average.

The honourable member asked the question about the green energy commitment. I've got to say again that I'm astounded that she would be in here saying that we should not be putting effort into our green energy consumption for the desal plant. That was part of the original commitment. Surely, she would be expecting the government to maintain its position and to hold to that commitment that we gave to the electorate.

The PRESIDENT: The Hon. Ms Lensink has a supplementary.

The Hon. J.M.A. LENSINK (14:36): What contribution at what cost does all the green energy and the carbon tax cost SA Water per annum?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (14:36): I think I have given a value in this place previously about the cost of the green energy commitment.

Members interjecting:

The Hon. I.K. HUNTER: I think I have.

The Hon. J.S.L. Dawkins: That's Gail's line that she's told us before.

The Hon. I.K. HUNTER: Yes, well, I'm pretty sure that I've answered that question in this place previously—

The PRESIDENT: Minister, I'm in the chair, not the Hon. Mr Dawkins.

The Hon. I.K. HUNTER: —but, as always, Mr President—

The Hon. K.J. Maher: The minister might outline the alternative policies. It wouldn't take you very long, minister.

The Hon. I.K. HUNTER: No, they don't have any, but—

An honourable member: In the fullness of time.

The Hon. I.K. HUNTER: In the fullness of time. The only policy the Liberal Party has outlined so far is from Mount Lofty, saying, 'We have none.' That's a refreshing breath of honesty from the Liberal Party, of course, to admit that they have no policies, but we will wait and see in the 'fullness of time'.

The Hon. G.E. Gago interjecting:

The Hon. I.K. HUNTER: Exactly.