Former Labor government in hot water as independent pricing inquiry finds Labor inflated water bills for consumers
An Independent Inquiry into Water Pricing in South Australia has found the former Labor government deliberately inflated the value of SA Water’s opening regulated asset base (RAB) to maximise profits and protect government revenues, driving up water bills for hardworking families and businesses.
The damning final report of the Inquiry, led by a former regulator and respected corporate leader Lew Owens, found that the RAB had been deliberately inflated by at least $520 million (in 2012 dollars) and ‘despite the (Labor) government claiming it was acting in the interests of consumers, that was not apparent and it appeared that the main driver of the decision was the securing of revenue for the Government’.
“While the Government was able to deliver a small reduction in price from July 2013, that needs to be seen in the context of an increase in water prices of over 150% in the previous 5 years,” the report found.
Average household water bills in SA under Labor rose from $236 in 2001-02 to an estimated $782 in 2017-18 – an increase of 232 percent.
The report found Labor ignored advice and criticism by the Essential Services Commission of SA and other stakeholders and used their powers under the Water Industry Act (2012) to set a $7.77 billion opening RAB value in May 2013 – which was “not reasonable’’ and “locked in its revenues for many years to come, at the disadvantage of customers”.
The RAB (which reflects the value of SA Water’s economic assets) is important, because it is used to set a Pricing Order which sets parameters that must be adopted by ESCOSA in setting its fouryear price determination for water bills.
“… the process was not transparent, balanced or credible: the decision was taken without proper public consultation or explanation, and there was no demonstrable effort to balance the interests of consumers against those of the Government,” the final report said.
“The Inquiry concluded that the process and the RAB value were not ‘reasonable’ under the criteria it applied, and concluded the value was at the upper end of a range of possible values.”
The Inquiry – which fulfils an election commitment of the Marshall Liberal Government - has found that, a ‘reasonable’ value of the RAB at 30 June 2013 (in December 2012 dollars) is probably in the range $7.1 billion to $7.25 billion, which would represent a fair balance between the interests of consumers and the Government.
Treasurer Rob Lucas said this report was a stunning and damning indictment of the former Labor government.
“We now know what many have suspected for years, and that is Labor puts its flagrant self-interest above the needs of hardworking South Australian families and business,’’ said Mr Lucas.
“They ignored criticism and advice and arrogantly pushed ahead with inflating the opening value of SA Water’s regulated asset base, knowing full-well it would ultimately cause undue hip pocket pain to consumers.
“It’s disgraceful, shameful and typical Labor, who say one thing publicly and do another in private.
“Labor, under the leadership of Mr Malinauskas, now owe South Australians an apology and must explain to them why they deliberately jacked-up their water bills and cost of living for the past six years.”
Mr Lucas said the Government would now consider the report in full, and he expected it – together with a lower interest rate environment – will result in lower water prices to customers and lower returns to the budget from 2020-21 onwards.
The next SA Water Regulatory Determination will apply from 1 July 2020 to 30 June 2024.
The heroic volunteers of the CFS and SES will soon have their rights to consultation about matters that affect them assured by legislation thanks to Marshall Government support.
The State Liberal Government will support Greens MLC Tammy Franks’s Fire and Emergency Services (Volunteer Charters) Amendment Bill 2018 when it is brought before the Lower House.
The Volunteer Charters represent a commitment by the Government to consult with the CFS and SES volunteer associations and CFS and SES volunteers about matters that might affect them.
The Franks Bill is identical to those introduced in 2012 by former Liberal MP Duncan McFetridge and then Robert Brokenshire MLC in 2015.
Minister for Correctional Services and Emergency Services Corey Wingard said the Bill would ensure volunteers continued to be adequately consulted and their advice taken onboard when decisions are made concerning the sector.
“The State’s volunteers are the backbone of our emergency sector,” Minister Wingard said.
“They have valuable insights into how the sector should operate and we are proud to ensure their knowledge and feedback will continue to help build a safer South Australia.”
“We pride ourselves on being a cooperative Government and we are honoured to work with Ms Franks to bring this important legislation through the Lower House and into legislation.”
The identical Bill which was introduced in 2015 by Robert Brokenshire, passed in the Legislative Council with bipartisan support during the previous session of Parliament.
Unfortunately, inaction by the previous Labor Government meant it did not pass in the House of Assembly before the March 2018 election.
The desire to have Volunteer Charters in legislation first arose during the Holloway review and stemmed from a concern of some volunteers that existing agreements on consultation processes and consideration of the views of volunteers would not be treated seriously enough under reforms proposed by Labor’s then Emergency Services Minister Tony Piccolo.
TAFE SA will maintain its presence at the Urrbrae Campus and continue its delivery of horticulture training, after meeting its required savings targets for the site and completing a review of how its training offering can be best delivered.
The announcement comes after the Government announced a further $25.2 million injection into TAFE SA in this year’s budget, as well as an additional $1.6 million to recognise delays in the training provider meeting its existing efficiency measures.
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