Please note: This is an extract from Hansard only. Hansard extracts are reproduced with permission from the Parliament of Tasmania.

WATER AND SEWERAGE INDUSTRY BILL 2008 (No. 24)

Second Reading

[11.29 a.m.]

Mr AIRD (Derwent - Treasurer - 2R) - Mr President, I move -

That the bill be now read the second time.

I just indicate to honourable members that there is a revised version of the speech, and again, honourable members can check the speech against delivery.

Mr President, this bill, the Previous HitWaterNext Hit and Previous HitSewerage Industry BillNext Hit 2008, provides for the establishment of enhanced regulatory arrangements for Tasmania's Previous HitwaterNext Hit and sewerage sector. It forms part of a new framework that will meet the growing challenges ahead for the sector in Tasmania. New structural arrangements have been detailed separately in the Previous HitWaterNext Hit and Sewerage Corporations Bill 2008.

Mr President, the Previous HitWaterNext Hit and Previous HitSewerage Industry BillNext Hit 2008 supports the sustainable operation of the Previous HitwaterNext Hit and sewerage sector and the protection of customers through ensuring that services will meet community and business needs both now and into the future.

This bill represents the culmination of broad and extensive public consultation on regulatory reform. In the second half of 2007 over 160 stakeholders, representing a wide range of stakeholder groups, attended statewide workshops and seminars which have helped develop elements of the framework provided for in this bill. There have been numerous discussions with individual stakeholders and over 30 written submissions were received in response to the initial position paper - Future Regulation of the Tasmanian Previous HitWaterNext Hit and Sewerage Sector, which was released in late November 2007.

Comments on a follow-up paper, which provided more detail particularly on how the proposed pricing framework will operate, closed on 20 March 2008. The feedback from this paper will assist in the development of the regulations made under this bill.

Mr President, the current regulatory framework is not driving service providers to meet accepted modern environmental and public health standards and does not have the proper mechanisms in place to ensure that appropriate outcomes are achieved. Additionally, financial returns in the sector are at a level which does not support long-term sustainability or, importantly, the appropriate use of debt to fund these long-life assets.

Investment approaching $1 billion over the next decade is required just to bring the sector as a whole up to an appropriate standard. Further, Tasmania's Previous HitwaterNext Hit and sewerage service providers have not been subject to direct price regulation. This is inconsistent with our commitments under the National Previous HitWaterNext Hit Initiative agreement between the Commonwealth and the States. Compliance with the National Previous HitWaterNext Hit Initiative will improve Tasmania's position in securing Federal funding to assist the Previous HitwaterNext Hit and sewerage sector. Such price regulation will achieve more sustainable outcomes, thereby driving critical investment in areas in which it is most needed and valued.

There is also no consistent pricing methodology adopted across the State. Some prices are based on value of property, some on pipe size and many areas do not include price components based on the amount of Previous HitwaterNext Hit consumed, otherwise known as a volumetric charge. Not including a volumetric component is inefficient, it leads to significant and inequitable cross subsidies and is not driven by the basic premise of user pays. In short, Mr President, economic regulation of the sector is a decade behind that in most other States and we must address this.

For these reasons, this bill will implement a number of new and revised arrangements. The key elements of the new regulatory regime include:

(1) implementation of a comprehensive and fully integrated operating licence regime for participants;

(2) the introduction of independent regulation of prices for regulated services;

(3) establishing a customer service standard-setting framework that will mandate minimum standards;

(4) introducing a requirement for licensed entities to provide a price and service plan, similar to Victoria's Previous HitwaterNext Hit plan, which will require licensed entities to adopt enhanced asset management planning;

(5) limiting duplication between activities of existing technical regulators and the economic regulator;

(6) introducing enhanced public performance reporting requirements; and

(7) establishing an ombudsman role for the sector to deal with customer complaints.

Mr President, I will address each of these elements in turn.

The establishment of an operating licence regime for the sector will regulate the ownership and operation of Previous HitwaterNext Hit and sewerage facilities, for the purpose of providing services in the sector. The licensing regime will provide a transparent means by which the various regulatory obligations placed on a service provider can be brought together in a single regulatory instrument. This will include bringing together the obligations contained within this bill with those in other existing legislation.

The terms and conditions of all operating licences will be publicly available and will include a requirement for a formal reporting process on an annual basis. This will ensure the transparent documentation of a business's performance against its licence requirements. It will provide appropriate checks and balances on the operation of the licensed entity and will highlight any need for policy adjustment on the part of the Government of the day.

The reporting feature will also allow for competition by comparison between the three regional businesses to be established under the Previous HitWaterNext Hit and Sewerage Corporations Bill. Comparison will allow customers to assess the relative performance of their provider, even if they are not able to choose an alternative provider. In other words, there will be enough publicly available information and opportunity for performance assessment with which to make each of the three regional corporations accountable for their operational and financial efficiency. On top of this, an economic regulator will undertake close periodic scrutiny of their pricing regimes.

Mr President, this bill also provides the power for the minister to create a licence condition that requires a service provider to be a reserve, or last resort provider for a geographical area. This means that, once connected, customers within a serviced area will not be unfairly excluded from receiving Previous HitwaterNext Hit and sewerage services. Furthermore, where services become available in areas that reticulated Previous HitwaterNext Hit and/or sewerage services were not previously available, common customer terms and conditions will allow for new connections to be made. This will also provide an initial focus for the regional businesses and ensure that all current Previous HitwaterNext Hit and sewerage customers will be serviced.

Mr President, the bill provides for the creation of an independent economic regulator for the sector. The regulator will administer the licensing regime and will also have the power to determine prices, and for some services pricing policies, with which licensed businesses will need to comply. The regulator will set prices that are fair and reflect the efficient costs of operating and maintaining the Previous HitwaterNext Hit and sewerage network. In some aspects, such as for headworks charges, the regulator may set pricing policies that will need to be followed by licensed businesses, not the actual charge.

The bill establishes the initial services to be regulated as including Previous HitwaterNext Hit and sewerage services currently provided by the three existing bulk Previous HitwaterNext Hit authorities and councils, including re-use schemes. However, this excludes the activities of entities operating outside the sector, such as irrigation, hydro-electricity generation and stormwater. In future, the Minister for Previous HitWaterNext Hit may declare other services to be regulated as required.

The bill also provides that in making price determinations, the regulator must ensure that a two-part pricing methodology is adopted by licensed entities that are providing Previous HitwaterNext Hit services to customers. Two-part pricing is commonly accepted in Australia as best practice for Previous HitwaterNext Hit pricing. It is consistent with an undertaking made by the State in its National Previous HitWaterNext Hit Initiative Agreement with the Australian Government to implement consumption-based, user-pays pricing for Previous HitwaterNext Hit and sewerage services. Two-part pricing is a method of charging for Previous HitwaterNext Hit where users are charged a fixed cost which reflects capital costs and a volumetric charge, based on the variable costs of Previous HitwaterNext Hit supply.

There are many residences and businesses in Tasmania which currently pay for Previous HitwaterNext Hit on the basis of assessed annual value of property, but who do not have comparable Previous HitwaterNext Hit usage. I believe it is not equitable for an elderly couple to pay the same for their Previous HitwaterNext Hit usage as a family of five living next door or a household with a swimming pool. It is, however, important to understand that two-part pricing does not require the immediate rollout of meters to those parts of the State that do not currently have meters.

There is a range of possible approaches to support two-part pricing. These include customer profiling, the voluntary take-up of metering and the mandatory take-up of metering over an extended period. But already 18 of the 29 councils meter Previous HitwaterNext Hit supplies, and other councils have meters installed but are yet to price on this basis. I believe the approach across the State should be consistent if the costs of regulation and service delivery are to be minimised, but no decision on metering has been made and the regulator's input on the extent and timing of any metering program will be important. I emphasise that any changes will be made over a sensible transition period.

Mr President, as we have with electricity concessions, the Government will be providing financial assistance to low income groups in the community to ensure any possible price impacts are minimised. The way this will work will be very similar to electricity concessions where low income groups in the community are subsidised by an amount towards their electricity usage. Also, like electricity, it is appropriate that the owners of the infrastructure which receive a return from the investment in Previous HitwaterNext Hit and sewerage assets, fund the subsidy to their customers who face hardship.

The Government will legislate to provide for the subsidy arrangements to come into effect once the new businesses commence operations. This will occur through a separate and specific bill. Early in the development of this bill the Government considered putting principles on concessions into the legislation, but on further analysis we decided it was more sensible to have a comprehensive understanding of the pricing methodologies to be employed by the regulator, and proper consideration of the impacts of possible price changes on low income groups. In short, it is too early to adequately deal with concessions in this bill.

I have now put on the record that we will legislate separately for subsidy arrangements for Previous HitwaterNext Hit and sewerage services. The Government has a strong track record on concessions, and we provide the largest electricity concession of all States to 70 000 households in Tasmania. I hope that this will give comfort to honourable members and the community concerned about this important issue.

Mr President, by explicitly stating the objectives of the act, and matters to which the regulator is to have regard, the bill ensures that the regulator will consider the long-term interests of consumers, the sustainable operation of the industry and the rate of change of any price increases required in making his or her decisions. This will provide important guidance to the regulator, who will inform his or her decision making.

Mr President, the bill also establishes a formal customer service standards framework for the sector. This will be similar to the framework operating in electricity, and will replace the self-determined standards that are currently set by the bulk Previous HitwaterNext Hit authorities and councils. This framework will be developed by the regulator by a process that will enable both service providers and customers to have a voice in setting the performance benchmarks for the sector. The framework will allow for differentiated service standards based on geography, customer density and other relevant considerations. However, there will also be minimum standards of service developed by the minister through regulation that will not be negotiable, so that public health and environmental values are guaranteed.

The customer service standards framework will be directly linked to the price paid by the customer for the service they receive. For example, those who get faster response times, or who wish to have greater security of supply, will pay more for this benefit than others who do not. Again, we are establishing a framework that will be as fair as it can be for customers.

Mr President, another new element referenced in this bill will be mandated asset management planning. Currently, only around half of the State's councils have done asset condition assessments and approximately 70 per cent do not have strategic asset management plans for their Previous HitwaterNext Hit and sewerage services. We need to remedy this. In the absence of such planning, a service provider cannot fully understand the capital and operational costs associated with running its assets, and therefore cannot price appropriately for asset sustainability in usage, through maintenance expenditure, or for planned asset replacement.

Under this new framework, asset management plans developed by the regulated entity will be oversighted by the regulator through a guideline, which will be designed to support the broader price and service plan process, a point I will come back to shortly. The asset management plans will need to reflect the required customer service standards and expected network demand growth in order to be an appropriate basis for the development of a price and service plan. As previously flagged, outside of the requirements of this bill there are other regulatory obligations that the licensed businesses will continue to be subject to and which will impact on their costs.

Two key obligations are those imposed by the Director of Public Health, in terms of Previous HitwaterNext Hit quality; and the Director of Environmental Management, regarding waste-Previous HitwaterNext Hit treatment and re-use. To ensure that the Previous HitwaterNext Hit and sewerage regulator is adequately informed of these obligations when developing customer service standards and in assessing the price and service plan, the bill provides that the regulator must consult with the Director of Public Health, the Director of Environmental Management and the Secretary of the Department of Primary Industries and Previous HitWaterNext Hit on a yearly basis when developing a state of the industry report.

This report will provide a strategic snapshot of the performance of the sector and identify key priorities going forward. It will be a requirement for the report to be tabled in Parliament in April of each year and it will be a key element in the improved accountability and transparency that will characterise the Previous HitwaterNext Hit and sewerage sector in the future.

Mr President, the service delivery obligations of regulated entities require an adequate revenue stream. In the past we have seen, for a number of reasons, councils unable to recover appropriate revenue to run the sector sustainably. However, this bill provides a mechanism to arrive at a transparent understanding of the minimum revenue requirements that will support sustainable businesses. This mechanism is called a price and service plan and it will be a requirement that a regulated business submit one to the regulator in respect of each regulatory period.

This plan will essentially be a business case, which justifies the revenues and prices needed by the business to meet its regulatory and service obligations for the period. Consultation with customers on the development of a price and service plan will be a mandatory element of the development of this plan. A price and service plan will reflect the customer services standards the business has to meet and the asset management plan it must develop.

The length of the regulatory period covered by a price and service plan will be determined by the regulator. However, a five-year period is common. Where licensed service providers have a regulatory obligation to meet, for example a requirement to upgrade a sewage treatment plant, and have satisfied the regulator through the price and service plan that they intend to meet the obligation in a cost-efficient manner over an appropriate time frame, the regulator will approve the recovery of necessary revenue for that plant. The price and services plan is a critical element of appropriate and transparent decision making and will be an important tool for the licensee, customers and the regulator.

Mr President, this bill also provides for formal complaint and dispute processes to be developed. In essence, this will allow for customers to lodge a complaint with a service provider and if that complaint is disputed by the provider, it may be reviewed under a formal ombudsman process. The Tasmanian Ombudsman will play that role for the sector. The bill also provides for administrative review of the regulator's pricing determinations and licensing decisions, which is based on the process that currently exists in regulating prices for the Tasmanian electricity market.

Mr President, this bill, in combination with the Previous HitWaterNext Hit and Sewerage Corporations Bill 2008, represents an important step towards addressing the pressing challenges facing the sector. However, the task is substantial and it will take several years to fully implement all the new arrangements.

To assist in transitioning to the new regulatory framework, the bill provides for the Treasurer to issue a transitional pricing order, which requires the Treasurer to seek the advice of the regulator on the directions in that order. It is intended that this order will apply to councils and then to the new regional authorities. It will cover the period up until the first pricing determination by the regulator, which is not, however, likely to be until after 2011-12.

The bill also provides for interim licences to be issued for a period of up to two years to persons who currently own or operate Previous HitwaterNext Hit and sewerage infrastructure. The minister has the power to exempt unlicensed service providers from the requirement to hold an interim licence, except for the new regional Previous HitwaterNext Hit and sewerage corporations, which may be granted an interim licence.

Mr President, aside from transition lead times, the timeliness of the approval of this bill is critical for three other important reasons. Most importantly, the passage of this bill will provide certainty to employees in the sector and to councils as the current service providers. Secondly, it allows the regulator to promptly start collecting data and establishing systems for pricing investigations. This is a very detailed role and one which generally requires significant lead time. Finally, it will provide the new businesses to be established through the corporations bill with an understanding of the core elements of the regulatory framework.

Without this context, the businesses will not be able to make informed start-up operational and resourcing decisions. Accordingly, this bill does not attempt to deal with the numerous consequential amendments to the many acts that assist to regulate Previous HitwaterNext Hit and sewerage activities. Nor does it seek to deal with all detailed operational and standard matters associated with moving to the new regulatory arrangements. These matters will be addressed in a consequential amendments and transitional bill and this is expected to be introduced into Parliament in the spring sitting of 2008.

The Previous HitWaterNext Hit and Previous HitSewerage Industry BillNext Hit 2008 and the Previous HitWaterNext Hit and Sewerage Corporations Bill 2008 need to be in place as law as soon as possible, so that all issues relating to the consequential amendments and transitional bill can be informed by feedback from the boards and CEOs of the new corporations. Timely passage of the Previous HitwaterNext Hit and sewerage bills will also provide certainty to the Tasmanian community, employees in the sector, and to councils. Matters to be dealt with in the consequential amendments and transitional bill will include repeal of powers and obligations currently contained in other legislation that will, because of structural reform, become redundant.

Some of the powers now in the Local Government Act, the Sewers and Drains Act, the Waterworks Clauses Act, and the Previous HitWaterNext Hit Management Act fall into this category. In addition, it will be necessary to provide additional operational rights and obligations to the new businesses in areas such as entry to land to undertake works and read meters.

This bill will also be supported by the development of subordinate legislation before the end of 2008.

The initial tariff order, which will set a framework for interim pricing prior to the commencement of the formal price and service plan process, will also be in place as soon as practicable and ideally before the end of the year so that interim pricing arrangements can commence for the 2009-10 financial year.

Mr President, this bill represents a significant reform for the Previous HitwaterNext Hit and sewerage sector, though its provisions are not unique to this sector in other jurisdictions, or to other monopoly network infrastructure. It is, however, an accepted economic regulatory framework that has operated in other jurisdictions for more than a decade. What we have done is to use the experience in other States to develop a best-of-breed framework which provides the right balance of flexibility, protection and clarity for licensed businesses and for customers. This is a solid platform upon which we can move this sector to a self-sustaining footing.

With 14 per cent of Australia's Previous HitwaterNext Hit resource on only 1 per cent of the land, Tasmania has the potential to develop a significant competitive advantage over the rest of Australia if this sector is better managed.

Mr President, I believe this bill provides for this improved management of the Previous HitwaterNext Hit and sewerage sector through a significantly more accountable, transparent and enhanced regulatory framework. Mr President, I commend the bill to the Council.

[11.51 a.m.]

Mrs SMITH (Montgomery) - Mr Deputy President, we had the substantive debate about this process yesterday with the corporations bill, and what this bill is doing is now setting up the framework in which these corporations will operate.

There have been some changes to the Treasurer's second reading speech in light of discussions we have had over the last couple of days, and we note the issue of concessions that now has had some strengthening information in this second reading speech. He said there had been some discussions about that and whether or not it would be introduced at this time and it is quite clearly rational to wait and see what your pricing structures are before you start talking about any particular concessions. But would it be the Treasurer's intention that the concession regime may perhaps sit with the regulator as well, so that he looks at that in the whole context of his pricing structure and allows those interested parties to also have what is seen as an external process to put their case and then have rational decisions made on concession processes? As there has clearly been some discussion, perhaps the Treasurer could give an indication as to whether he sees that as being the process to be followed, or a different process.

There is one other issue I wish the Treasurer to clear up, and it is only probably because of the relationship in the second reading speech of his order of information. One paragraph says that the bill quite clearly establishes the initial services, and I look at the words 'initial services' and know that these growing businesses will look to expand if they operate as we hope and dream they will into the future. But in one paragraph the Treasurer talks about the initial services to be regulated, currently being provided by the three existing Previous HitwaterNext Hit authorities and councils. In the next paragraph he says, 'However, this excludes the activities of entities operating outside the sector, such as irrigation, hydro-electricity generation and storm Previous Hitwater'Next Hit. In the next sentence he say, 'In future, the Minister for Previous HitWaterNext Hit may declare other services to be regulated as required.'

We are quite clear, I believe, in this House that this is about Previous HitwaterNext Hit and sewerage services and the future and that, when you look at the minister's functions, we have erred on the side of necessity to have exemptions because there will be some activities that, quite clearly, should stay in a private sort of process. But when I read that the minister may declare other services to be regulated as required, following on from those comments about irrigation, hydro-electricity generation and storm Previous HitwaterNext Hit, we all know and understand that irrigation comes in under the Previous HitWaterNext Hit Management Act and that hydro-electricity generation, of course, has its own strong and powerful base from which it operates.

I want an assurance that there is nothing in this bill that would allow a minister of the future to declare, for instance, the services of private irrigation facilities around the State to somehow be caught up in this bill which I see as a new bill for entities existing to set up and operate in a corporate world. I do have a question mark in front of me when I see those sentences running in that order. What if a minister of the future sees that it is very interesting and accommodating just to transfer all the issues of private irrigation schemes, for instance, around the State out of one act which I think people are, to a degree, satisfied and comfortable with, into this sort of process.

I would like an assurance from the Leader that there is no capacity in this under Part 3, administration, which we will progress further when we go into Committee perhaps, that we are dealing with three new corporations with an understanding of what their business is now and the hope that their business grows in the future perhaps into some of those areas, but does not have the potential for a minister to impact on what is currently known and accepted as an irrigation process in this State or a hydro-electricity generator in this State.

[11.56 p.m.]

Mr HARRISS (Huon) - Mr Deputy President, I acknowledge that this is more of a facilitation of the mechanics of delivering that which was passed through the House last night. I would just appreciate if the Treasurer can indicate, while I am here, whether he would consider proposing an adjournment of the debate for the purposes of some appropriate briefings from industry bodies and whether the honourable Treasurer can indicate what industry bodies have contacted him or the task force and what responses have been made. I refer specifically to the concerns within industry groups about what I will term 'headworks charges' or 'developer charges'.

Mr Aird - You would have seen the Property Council.

Mr HARRISS - And others.

Mr Aird - I was aware of the presence of the Property Council during the briefings and I had heard that they had some concerns, but they actually had not come to government about those concerns so I asked someone on my staff to contact them and they indicated that they had some concerns about headworks. I would have to say that I am not surprised; that has never been something that they have been willing to embrace, but in fairness, we have to make sure that we have some very clear cost indicators in terms of the changes that go with it. I can argue the point if you want to, but -

Mr HARRISS - Probably in Committee.

Mr Aird - Yes, we can do that. I am not aware of any other industry group approaching us about any concerns with this bill. It was only after I heard that they did have some concerns that I got someone in my office to approach them, because they had not indicated those concerns to us other than in a general sense some time ago.

Mr HARRISS - You would be aware that in a letter dated 2 April the HIA wrote to the Ministerial Previous HitWaterNext Hit and Sewerage Taskforce and my understanding is that there has been no response to the concerns raised in that correspondence other than to say, 'Thanks - we have received your letter'. Now, that being the case, clearly in my mind at the very least I certainly would like to hear more about the concerns expressed by the HIA in that four-page correspondence dated 2 April. I only became aware of this, this morning when I received a phone call from the Executive Director of the Tasmanian Division of the HIA, Stuart Clues. I asked him to e-mail me a copy of that letter and he has authorised me to refer to it at an appropriate time, which I think is right now.

I could move, Mr Deputy President, that the debate stand adjourned right now for the purposes of a briefing with regard to those concerns or it may be more appropriate to proceed with this process, and if honourable members are of a mind to support the second reading, and therefore the principle of the industry bill, then we can progress through the Committee stage and when we get to the particular clauses - and I think it is around clauses 63, 64, 65, 67, 68, thereabouts - it might be an appropriate time to report progress for the purposes then of undertaking a briefing. Then people can more particularly understand the concerns and the impact that the provisions that cause some concern to industry will have on development and could, Mr Deputy President, and most likely would have, on the affordability of housing in this State, and development associated therewith going forward.

Mr Martin - It would be better to have the briefing now, wouldn't it?

Mr HARRISS - The honourable member for Elwick suggests that it may be better to have a briefing now. I guess, Mr Deputy President, it does not much matter because if we agree with the principle of this bill, which is the facilitation process, then maybe we dispense with that. By my judgment, if there is to be a briefing, it not impact on the second reading - the principle of the bill - it is more the detail of the clauses which go to the matter of developer charges and headworks charges by another name.

Ms Forrest - Through you, Mr Deputy President - the HIA are essentially in support of the reform and in support of the process that we are looking at. They have a concern about a particular section here, as you identified with the headworks charges, so they have generally supported this industry bill. They don't want to throw it out, sort of thing.

Mr HARRISS - The package - that is right. They support the notion of Previous HitwaterNext Hit and sewerage reform, as indeed do the Property Council. A moment ago the honourable Treasurer indicated that the Property Council expressed some concerns about the issues. I, and probably other members, do not know to whom the Property Council has spoken.

Mrs Smith - In fairness to the Property Council - through you, Mr Deputy Chair - last Friday I asked them for a comment and they facilitated a comment to me and that was the reason they were around the other day.

Mr Aird - I am not complaining about the process at all.

Mrs Smith - It was a case of my asking whether they were happy with this rather than the Property Council going around lobbying. I think that needs to be clear.

Mr Aird - No, I am not critical of them at all.

Mrs Smith - I understood their issue of headworks, it has been there forever.

Mr Aird - Yes, we all do.

Mrs Smith - The councils have rights and authority in that area and have chosen, in the main, not to use them for a long time.

Mr HARRISS - With choice rather than by legislative measure.

Mrs Smith - That's right.

Mr HARRISS - Therein lies the issue and, clearly, if a briefing is appropriate - and I personally believe it certainly is, Mr Deputy President - and I think the honourable member for Murchison has probably reinforced my view by reminding me that the HIA and others support the principle of reform. Therefore my judgment is that it would be perfectly reasonable to proceed through the process and get to a stage where, with the will of the Committee, we report progress.

So, without any further comment on that, Mr Deputy President - it was important as I have been authorised by Stuart Clues at an earlier time today to raise those matters - with that, I support the second reading but indicate clearly that at another time in the debate I will be seeking to propose an adjournment so that we can undertake a briefing.

[12.04]

Mrs RATTRAY-WAGNER (Apsley) - I also rise to place on the record that I also did note the Previous HitWaterNext Hit minister's powers in the second reading speech. Then I referred to the information in the handouts that we were given in the briefing. It was very plain in that information that a regulated activity is not any Previous HitwaterNext Hit service or Previous HitwaterNext Hit infrastructure that supplies or uses Previous HitwaterNext Hit for irrigation purposes, electricity generation - that is, Previous HitwaterNext Hit tanks or private dams - and I also wrote down springs at the time. When the member for Montgomery raised the issue, it also flagged in my mind as well what may happen in the future with a new minister and perhaps an opportunity to declare other services to be regulated as required. I will need some sort of clarification and an indication from the honourable Treasurer that that situation, as we were first told in the briefing, will remain the status quo into the future. I would like some further explanation about why it is necessary for that to be there.

Given that two-part Previous HitwaterNext Hit pricing is fairly topical in some areas in the State, I would like to know if the honourable Treasurer can indicate if there has been some indication - it talks about the possible approaches to support two-part pricing and these include customer profiling and the voluntary take-up of metering and mandatory take-up of metering over an extended period. Have there been any discussions at all about what sort of extended period would be suitable, or will that be left entirely to the new entities? I would appreciate a comment on that. I appreciate that we are here at this stage following on from yesterday's support. I supported the bill yesterday and I am prepared to support this one into Committee as well.

[12.07 p.m.]

Ms FORREST (Murchison) - Mr Deputy President, I support the bill, as I did the corporations bill, and acknowledge that this is the bill that will establish the regulatory framework and arrangements to enable this reform to occur. Overall I do not have any major concerns regarding the framework that is before us, but I will be interested in the feedback that the member for Montgomery has also asked for in relation to that.

I wanted to pursue one area that is included in the bill, and that is the role of the Ombudsman. I assume that in his or her role as the Ombudsman they will be dealing specifically with the Previous HitwaterNext Hit issues. The Ombudsman currently is the Health Complaints Commissioner as well and I assume that he will undertake a specific role as Previous HitwaterNext Hit ombudsman, or whatever it is called. It appears to me from reading through and listening to the speech that the process will allow customers to lodge a complaint with a service provider. If that complaint is disputed by the provider, it may be reviewed under a formal process with the Ombudsman. Is it planned that the process will be where there is a complaint between one of the corporations or one of the providers and a customer or will there be the possibility for that to extend a bit broader? The reason I ask is that in my rural electorate, particularly in recent times of drought, we have had disputes and problems between farmers over Previous HitwaterNext Hit, which is not surprising when you appreciate how valuable the commodity is, where you might have one farmer who has purchased Previous HitwaterNext Hit from a farmer upstream but there is a farmer in the middle and it has to pass through his dam to get to the farmer downstream. We are seeing all sorts of interesting approaches being taken without measurement models and things like that. You can put Previous HitwaterNext Hit meters on and measure the flow, but if the farmer in the middle refuses there is no capacity to insist that the metering continues all the way. I have assisted a number of constituents in my electorate with regard to this matter. Another issue has been with the drilling of bores near the head of the Previous HitwaterNext Hit supply. It is hard to establish whether that has reduced the flow downstream because rainfall has been low at the same time, but how do we know? People are unhappy because they are not getting the Previous HitwaterNext Hit they feel they are entitled to and since I have had the situations and circumstances explained, environmental flows are not even coming through, except when the Previous HitwaterNext Hit inspector turns up, which is a bit frustrating.

Because these problems have not been able to be resolved adequately with the current processes that we have in place with the Previous HitwaterNext Hit bailiff - and there are a number of reasons why that has been the case - I have made a suggestion to the Minister for Primary Industries and Previous HitWaterNext Hit on a number of occasions that perhaps we should have an arbiter or someone in that role who could come in as an independent person and have a look at the situation, check out what has really gone on and look at the whole story totally independently from the people who manage it on the ground, so to speak. That received some favourable support. The minister said he was interested in looking at it but there was no commitment made, obviously, even though I do like a bit of commitment.

I just feel that maybe this is an avenue where perhaps an arbiter might not be necessary but these sorts of Previous HitwaterNext Hit issues could be addressed through this process. If that is not the way it is intended or it is not possible to do it that way I am happy to accept that, but I just wanted to know if this was perhaps an avenue that would enable those issues that are quite frequent, Mr Deputy President - I do not know if you have had the same in your electorate but I know it is certainly quite an issue in mine at times, and particularly in the last summer season. I want a bit further explanation of the role of the Ombudsman and the establishment of that position.

[12.12 p.m.]

Mr MARTIN (Elwick) - Mr Deputy President, obviously from my comments last night in relation to the first piece of legislation in this matter I am strongly supportive of the principle of this bill, but I did flag last night that I do have one major concern with this whole package and that is the fact that it is quite clear that there will be increases in the cost of Previous HitwaterNext Hit. Again, there can be good reasons for that from both an environmental and economic point of view, but my concern, which I did flag in my reply to the Premier's state of the State address earlier this year, is the impact that this reform could have on the more disadvantaged in our community.

I pointed out that the primary consultants to Treasury had advised quite clearly that there was going to be a big increase in Previous HitwaterNext Hit and sewerage charges for some people, especially for the disadvantaged, who are of course less able to afford such increases, and therefore when I first saw the legislation I was a little bit disappointed that there was no mention of the type of concession framework that would be applied in each of the bills. Accordingly, I have had some informal discussions with the honourable Treasurer and he has rewritten the second reading speech to more strongly give a commitment to providing a concessions framework in a separate piece of legislation, and I appreciate that.

Unfortunately, Mr Deputy President, after 20-odd years in public life and dealing with governments, you do tend to become a little bit cynical or sceptical about promises from ministers, but I certainly know from the discussions I have had with the honourable Treasurer that he is indeed very committed to this and I think he will probably say in his summing up that he is passionate about providing concessions in cases like this. I would like to see him give that further pledge and commitment and talk in his summing up with the passion that he has for this matter.

Ms Forrest - Do you want to praise him again?

Mr MARTIN - No, I just want to hear the passion - and I would like Hansard to put in brackets 'said with passion'.

Mrs Rattray-Wagner - Are you giving directions now?

Ms Forrest - He's smiling; he's looking quite happy.

Mr Aird - There's a time and place for everything, but passion is not one of the things in here!

Mr MARTIN - For Previous HitwaterNext Hit and sewerage?

Mr Aird - Compassion - I'm happy to display compassion.

Mr MARTIN - Compassion would be good, being the compassionate honourable Treasurer that you are. I will not mention ambulance levies but this is a chance to correct the ambulance levy.

Mr Deputy President, as I said previously, I do have a few other concerns with the bill, but a lot of these were satisfied by the secretary in the briefings and the Government's proposed amendments in the first bill dealt with a lot of them. I do have a couple of other concerns to raise in this bill but, as I said, my main concern is the concessions issue. I did have prepared an amendment that would have brought in a proposed Part 4A to the bill but it is fairly complex and I accept the fact that it would be fairly proscriptive. So I am leaning towards not introducing this amendment given the commitments that have been made by the Government and the Treasurer.

I also proposed a potential amendment to clause 68 which relates to pricing policy to insert a reference to affordability as being part of the pricing policy. The response I have had to that is that it is really a social issue and not a pricing issue and I tend to accept that as well.

What I am really looking forward to in the summing up is a further commitment from the honourable Treasurer that the concessions framework that will be introduced will be comparable in quantity and quality to the power concessions.

The only other thing that I will say is that I would support the honourable member for Huon's comments in relation to obtaining a briefing from the HIA. I only became aware of their concerns this morning and I understand they are prepared to make themselves available for briefings and I certainly would like to hear them.