Water and Other Legislation Amendment Bill

Mr DOWLING (Redlands—LNP) (12.01 pm): Today I rise to contribute to the debate on the Water and Other Legislation Amendment Bill 2010. Before I commence, I would like to commend the students from Redland Bay State School who have joined us here this morning. They are a very attractive and intelligent group of students from my electorate. I hope they enjoy their day here.

 While this legislation covers a range of issues—coal seam gas, the Queensland Institute of Medical Research, wild rivers et cetera—I will limit my comments to the water issues that are most relevant to the electorate of Redlands, such as the bulk water pricing, the distribution and retail entities and the Energy Ombudsman. The amendments are an attempt, in my assessment, to address an escalating community feeling as the price for water continues to rise. We have seen a systemic failure and it is a reflection on this and previous Labor governments. Labor has raised the cost of all things without any regard for the community’s ability to pay.

This amendment is just another carefully crafted piece of legislation to have someone else manage the mess. It is an attempt to teflon coat an incompetent, tired, long-term Labor government—a government that is responsible for mistake after mistake, one disaster after another. The evidence is there everywhere you look—look at electricity, local government amalgamations, water, health and the list goes on. I can still hear the line, ‘No-one will pay more for electricity,’ and wasn’t that a hollow commitment. The truth is that electricity now costs more—so much more that we now have an Energy Ombudsman to manage complaints against energy suppliers.

The Water and Other Legislation Amendment Bill 2010 seeks to expand the role of the Energy Ombudsman. The legislation will amend the Energy Ombudsman Act 2006 to expand the ombudsman’s role to also manage water complaints. This will be a very busy office. Instead of fixing the issue, Labor distracts, disguises, redirects, dismisses, blames, denies—you name it, on any issue, Labor will find a spin, an angle.

On the water issue, Labor true to form is playing the blame card and the redirect card. For the blame card, Labor has accused councils of gouging residents on water pricing, but residents of South- East Queensland are well aware of how they are paying for the mistakes made by Labor—not mistakes made by council, but by Labor. The price complaints are driven by bulk water prices set by Labor. The price is a reflection of the debt—debt raised by Labor, debt that needs to be serviced by water pricing.

For the redirect card, Labor’s answer to the pricing is to pass the buck. It will amend the Energy Ombudsman Act 2006 to expand the existing Energy Ombudsman’s role to include water and waste water disputes by small customers in South-East Queensland. Instead of fixing the problem, Labor is redirecting the problem to someone else. Complaints about water costs is a growth industry in Queensland. Labor governments have created a price point that is crippling family budgets, giving rise to a culture of complaint—a valid culture of complaint.

The answer to any Labor problem is to handpass it to someone else, anyone, in this case the Energy Ombudsman. The Energy Ombudsman will become the scapegoat for Labor’s failure to plan, failure to manage and failure to deliver cost-effective water supply to the community. When we look at the South East Queensland Water (Restructuring) Act 2007, section 3 states the purpose of the act. It states—

The purpose of this Act is to facilitate a restructure of the water industry in south east Queensland to deliver significant benefits to the community, including—

(a) improved regional coordination and management of water supply— that has not happened—

(b) more efficient delivery of water services— that has not happened—

(c) enhanced customer service for water consumers— that has not happened, and—

(d) a clearer accountability framework for water supply security. That has not happened.

Amendments to the South-East Queensland Water (Distribution and Retail Restructuring) Act 2009 will provide additional customer protection provisions and offences. Unfortunately, those amendments do not protect the community from a greedy, incompetent, tired Labor state government.

They cannot protect the community from all of Labor’s other expensive mistakes—for example, electricity costs, which are directly attributable to Labor, and local government amalgamation costs, which are directly attributable to Labor and which have continued and will continue to affect all local government areas that fell foul of amalgamation. Waste water charges will follow on from water, power, fuel, motoring costs, registration and tolls—you name it, Labor is squeezing it.

The distributor-retailers have most of the necessary powers to deliver and manage the water process. However, they still lack the ability to accurately and equitably bill residents. Residents who live in some town house complexes or apartments rely on a guesstimate as to their actual water consumption and their subsequent bill. The reason is that there is no requirement to individually meter all properties. The Energy Ombudsman will be a busy ombudsman with the water complaints as water becomes the most expensive commodity in a family budget. There will be a necessity to meter all users, including residents of town houses and some unit dwellers.

The bill declares that three South-East Queensland distributor-retailers will use part 5A of the Queensland Competition Authority Act to make enforceable water pricing determinations and moderate the impact of price increases on consumers, but that is too late. The consumers are already being hurt because of this government’s price path. Let me read an extract from the Allconnex Water Price Monitoring Submission 2010-11. It states—

Bulk water costs are determined by the Queensland Water Commission (QWC) which has set a ten year price path commencing 1 July 2008. A firm commitment to these prices has been provided for the first five years with prices expected to be subject to review by the QWC from 2013-14 onwards.

Allconnex Water’s forecasts assume that bulk water costs will increase in line with the QWC’s published price path. The bulk water costs are forecast to increase on average 17.9% from 2010-11 to 2014-15. For the reporting year 2010-11, bulk water costs comprise approximately 68% of Allconnex Water’s operating cost budget for water services ... increasing to more than 70% by 2014-15.

How is that possible under part 5A of the Queensland Competition Authority Act, which specifically indicates the need to moderate the impact of price increases on customers by implementing a price path? How is it possible when it is responsible for almost 70 per cent of the cost? How is it possible for them to adjudicate on both roles or be responsible for both areas?

Labor is to blame for the water pricing and for the water bills that are going through the roof. Independent reports suggest that water prices are not only traumatic now but will double in the next seven years. Water bills have gone through the roof under Labor since the Premier and Treasurer took responsibility for water away from local governments. After doing nothing about water for a decade, the long-term, tired Labor government then had to build infrastructure in a mad panic, with projects experiencing budget blow-outs.

Parts of the $9 billion water grid are not even being used. Labor’s decision to pursue the ill-fated and foolhardy Traveston Crossing Dam cost Queensland taxpayers hundreds of millions of dollars. Then there is the desalination plant which one day I suspect will be nothing more than an expensive artificial reef. These are all failures by Labor—failures that we will pay for over the next 20 years.

The AECgroup report for the Local Government Association of Queensland in November 2007 on assessing the drivers of recent water price increases in South-East Queensland says that there have been considerable increases in retail water bills across South-East Queensland since Queensland government water reforms were initiated, averaging between 15 and 20 per cent per annum, with Redcliffe in excess of 40 per cent per annum. The Queensland government’s bulk water price paths suggest bulk water prices of $3.36 per kilolitre in 2017-18. That is a considerable increase from the 2007-08 levels of generally well below a dollar per kilolitre. Actual increases in water bills have generally been greater than those initially forecast by the Queensland Water Commission at the time when the bulk water price was announced.

The issue facing councils is that the three distribution and retail businesses are council owned but not council controlled. QCA sets the base price path, not council. The average water bill has already jumped from $464 in 2007-08 to $769 in 2010-11, with more than double to come.

Following an extended dry period and water levels dropping dramatically panic set in. Then Premier Beattie decided that South-East Queensland needed a water grid to solve the problem created by him and his and his government’s inaction over 20 years when it comes to planning. So panic mode it is. The Bligh-Beattie government thrust water reform on Queensland residents. This panic mode has delivered a largely dormant water grid, a suspect desalination plant, a multimillion dollar Traveston Crossing Dam nonevent and a $9 billion debt, which does not include the cost of water.

The state government took over the Redland shire water infrastructure worth well over $600 million yet the Redlands council received only $83 million. The Beattie-Bligh government formed a water business that only Labor could. The South-East Queensland councils are shareholders in water businesses with accumulated debts of $9 billion. The Redlands had a well run water business. It was a profitable business. It returned a dividend to the organisation which, in turn, allowed council to provide extra infrastructure.

What does the future hold since Labor’s involvement? It involves higher prices for water absolutely guaranteed. There are eight years of price hikes to come because of Labor. Electricity costs will continue to rise. Sewerage costs will be the next major blow to the cost of living. The waste costs will also increase as those levies are introduced.

Queensland has been a boom state over the last 30 years. This is long-term growth that state governments back in the 1970s and 1980s planned for. But the state Labor governments of the past 20 years have failed to plan for the tens of thousands of new residents travelling north to Queensland.

While they were welcomed, they were not planned for. Water levels were dropping dramatically and Labor was crisis planning after 20 years in office and doing nothing. The most disastrous legacy is one that will continue to hurt Queenslanders financially for the next 20 years—the $9 billion debt.

 The Beattie-Bligh government’s water reform has so far delivered nothing but heartache and misery. The Beattie-Bligh government mangled viable water businesses and replaced them with Allconnex, Urban Utilities and Unitywater. Only Labor could trash water so completely. South-East Queensland councils are shareholders in a business which they have very little control over. Councils will continue to struggle to deliver services. Electricity costs will continue to rise. Sewerage costs will be the next major blow.

There has been a champion in our community—a councillor by the name of Karen Williams. Councillor Williams represents Capalaba and has been fighting for a better deal for her community for years. Water and the knock-on effect of pricing is again an issue that Councillor Karen Williams is championing. There is a blog in Redlands that I will take some extracts from to highlight the depth of feeling in Redland City. I credit Councillor Williams for her work on the issue and for a large amount of the material contained on that blog. The site is called ‘The Redland water rip off’. It states—

The Great SEQ Water Debate has been reignited and, in my opinion, will continue to be a topic of public debate for years to come as the hikes in water rates take an upward spiral. Unfortunately for Redland City, we were needlessly thrown into this bureaucratic bungle called ‘Water Reform’. It was completely unnecessary as the Redlands had positioned—

as mentioned by my colleague the member for Cleveland—

 itself over the last couple of decades to be self sustaining in supplying water to our community. This is what water reform was supposed to deliver, yet it has not. It continues—

COUNCIL’S GOT WHAT THEY ASKED FOR!

The State Government stated that Councils have got what they asked for. The only factor the Council of Mayors asked for was three distribution/retail entities rather that the State’s proposal of one distribution entity. This does not mean they asked for the

water reform.

I never felt comfortable with this move and questioned the fact that this represented tripling the cost of administrative systems and bureaucracy.

Not surprisingly, the State Government did a back flip, gave the Council’s what they negotiated and an opportunity forever more to say “They got what they wanted.”

That has been the mantra that we have heard in his House. It continues—

 It is not rocket science, extra levels of bureaucracy are going to inflate the cost of water to our community. Previously, Council collected, treated and distributed water to our community through one entity—Redlands Water.

Due to the State Government’s legislation on water reform, the community is now forced to fund five extra entities of bureaucracy—Qld Water Commission, WaterSecure, Linkwater, the Water Grid Manager and Allconnex. Against the communities wishes demonstrated in the aforementioned petition, community equity has been diminished, water revenue has decreased ... and decision making on the future of Redland’s water has been unscrupulously stolen from the our community.

Redland City Council should not be sitting back and accepting this incredulous spin promulgated by the State Government and start to defend our community in relation to this additional increase on our cost of living.

This blog goes on and on. There are so many hits on this blog. It continues—

REDLAND CITY HAS BEEN COMPENSATED?

There is an argument that Redland City Council was adequately compensated with $83million for its water assets. Considering that State Government clearly understood the cost of building brand new infrastructure such as desalination plants and pipe networks—it seems obvious that water infrastructure owned by Redland City in 2007, and costing $27million 40 years ago, would be worth considerably more than this in today’s dollars. My estimate is that brand new infrastructure and land to duplicate these water assets (if built in 2007) would have cost in excess of $600million.

SHOW US YOUR PRICE PATH AND WE WILL SHOW YOU OURS

The latest rhetoric from the State Treasurer Andrew Fraser is that the Council owned retail entities should be transparent and show their price path for water through to 2017. The problem is that for any commercial entity to forecast their prices they need to have guaranteed cost of their product. So when the State “guarantees” their price path for water through to 2017, perhaps the Council owned retail entities can do the same.

COUNCILS ARE THE ONLY LEVEL OF GOVERNMENT PROFITING FROM WATER

It is true that Council’s profit from water. No surprise really—they always have to offset the rates. The fact remains that Redland City Council would have offset rates by an extra $10million this year if they still controlled water. So “profits” are down, council rates are up and water bills have increased even more.

Councillor Williams has been very proactive on this issue and she is getting considerable community support, and quite rightly, through this forum—the blog—and others locally. The blog for those interested is ‘The Redland water rip off’. It is just like the health pay system—we buy a system for $65 million yet we have to spend $210 million over three years to try to fix it. Create a water infrastructure problem and the rest of the community has to pick up that $9 billion tab.