Water Industry Competition Bill
Central Coast Water Corporation Bill
Page: 3801
Second Reading
Debate resumed from 24 October 2006.
Mr ANDREW STONER (Oxley—Leader of The Nationals) [5.26 p.m.]: I lead for the Liberal/Nationals Coalition in relation to the Water Industry Competition Bill and the Central Coast Water Corporation Bill. I will speak to the Water Industry Competition Bill, which relates to the Government's attempts to introduce competition into the water sector, and my colleague, the honourable member for Gosford and shadow Minister for the Central Coast, will speak to the Central Coast Water Corporation Bill. The Water Industry Competition Bill provides that private companies will be able to apply for indefinite licences to operate water infrastructure or provide water and sewerage services in competition with State-owned utilities.
The Liberal-Nationals Coalition will not oppose the bill. Indeed, it has been calling for genuine competition in relation to the provision of water and sewerage services. It has also been calling for some time for enhanced efficiency, particularly in relation to Sydney Water, so it does not oppose the bill. However, the Opposition will comment on perceived shortcomings of the bill as well as some concerns expressed to it from industry. This bill was largely brought about by the legal manoeuvrings of a private company, Services Sydney, which was successful via the National Competition Council in having access to Sydney's water infrastructure declared under the Trade Practices Act.
After the former Premier's deemed refusal of the ruling, Services Sydney then appealed successfully to the Australian Competition Tribunal, which meant Sydney Water was compelled to negotiate in good faith with Services Sydney. In the case of a commercial dispute, any arbitration process would take place at the Australian Competition and Consumer Commission as required under the provisions of the National Competition Council and the Trade Practices Act. A recent freedom of information request showed that Sydney Water spent almost $1.6 million on legal fees opposing Services Sydney, mainly on the grounds that the company did not satisfy two significant issues: firstly, that access or increased access to the service would promote competition in at least one market, whether or not in Australia, other than the market for the service; and, secondly, that access or increased access to the service would not be contrary to the public interest.
Despite Sydney Water's previous position, the Iemma-Costa Labor Government has now drafted legislation that is nearly identical to that which it fought at the Federal level. Two of its declaration criteria are: firstly, that access or increased access to the service by third parties is necessary to promote a material increase in competition in an upstream or downstream market; and, secondly, that access or increased access to the service would not be contrary to the public interest. The main difference is that, in the case of a commercial dispute, any arbitration process will take place before the Independent Pricing and Regulatory Tribunal. One wonders why the Government spent so much time and so much of the State's resources opposing Services Sydney and fighting the National Competition Council and the Australian Competition Tribunal, and then developed its own, nearly identical legislation.
While the Opposition does not oppose the bill, industry has voiced several concerns about the proposed State-based access regime and the Government's real intentions. I ask the Minister to address those concerns in his reply. One of the concerns is the viability of the Government's proposed access regime. Some water companies are uncertain how effective the access regime will be. The only cost effective option may be to bid for the right to provide water services in greenfields residential developments or in relation to large industrial sites. Given that about 80 per cent of Sydney Water's existing customers are small and largely residential, there are legitimate industry concerns that access to large customers only would impact negatively on the viability of businesses under this regime. Hence, Labor's Water Industry Competition Bill may well prove to be only window-dressing in terms of actual competition.
Another concern relates to access prices. It is unclear at this stage how access costs will be determined. These costs will make or break the viability of schemes. It is also unclear whether or not third parties will have reasonable access to Sydney Water lands. At least one major water company has expressed to the Liberal-Nationals Coalition that it will take a wait-and-see approach before entering the market. Clearly, the Iemma-Costa Labor Government is not listening to industry. It introduces this legislation effectively because it has been forced to do so by the actions of Services Sydney and by Federal legislation.
A further concern relates to the length of access. According to the bill, licences will be issued indefinitely, but they will be reviewed every five years. Firms will have to comply with public health, environmental and consumer protection regulations, and the Minister for Water Utilities will have the ability to withdraw licences. After industry complaints, the New South Wales Government has dropped plans to issue licences for 15 years. The National Competition Council recommended a licence period of 50 years to provide certainty of investment. There is a great deal of uncertainty in relation to length of access, and that of course will affect the level of investment in genuine competition in the water and sewerage sector. Generally, commercial loans for these sorts of purposes, or arrangements in relation to superannuation funds and other sources of investment money, relate to a turnover period of 25 to 30 years. The Government is saying that it will review licences every five years and give the Minister the power, basically on a whim, to withdraw licences. That is not encouraging to businesses that may wish to enter this sector.
The reality is that the New South Wales Government has fought recycling for six years. It is only after the ruling favourable to Services Sydney that the Government has been forced to act. Some in the industry have concerns that the Government may have an aim to actually keep companies such as Services Sydney out of the market. Indeed, the Government's previous actions indicate that that is its agenda. Actions speak louder than words, and the Government's actions speak louder than this legislation. In addition, any access regime may take several years to implement.
The New South Wales Government has no credibility on water recycling. Its targets have actually gone backwards. Former Utilities Minister Frank Sartor said in this place on 22 March 2005 that "we will be recycling up to 80 billion litres of water". Premier Morris Iemma said on 23 November last year that the Government would be "increasing the use of recycled water from 15 to 70 billion litres per year by 2011". This means that the Iemma-Costa Labor Government has actually gone backwards on water recycling targets given its current level of 70 billion litres per year by 2015. Introducing competition into the water industry would have provided the real opportunity for large-scale recycling to proceed. The industry is rightfully asking whether the Government is committed to introducing competition or whether it is actually acting to protect its monopoly water utilities from competition and thereby secure the consequent dividends from those utilities that flow to the Government.
There is also the question of the cost of this legislation effectively duplicating existing Federal legislation. One reason that the New South Wales Government did not implement its own access regime before the Services Sydney cases at the National Competition Council and the Australian Competition Tribunal was the significant cost of introducing a legislative framework. It has now backflipped on this matter to avoid giving up its monopoly. Simply put, the Government has been dragged kicking and screaming into change. Another concern that has been raised is the issue of unreasonable penalties. Industry has questioned penalties of up to $500,000 for an initial breach of the legislation. This is extraordinarily high, especially if the breach is trivial. At least one major water company has stated that this penalty has the potential to stop the entrance of third parties into the market.
I should comment also on the overlap of State and Federal legislation and the jurisdictions of agencies tasked with oversight of competition in this sector. The Trade Practices Law Journal notes that there is the possibility that, for at least some time, two regimes—that is, Federal and State access regimes—will extend to water and wastewater. A service cannot be declared at the Federal level if access is already the subject of an effective access regime. However, part IIIA of the Trade Practices Act is silent on the status—as is likely to be the case—of a State regime developed after declaration and specifically whether two regimes, part IIIA and a State regime, may operate concurrently in relation to the same services.
There is no precedent for this in Australia. While this may be explored in greater detail, section 109 of the Constitution provides that when a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid. For these reasons, the Water Industry Competition Bill may itself, in part, be invalid or unworkable. As I have indicated, the Liberal-Nationals Coalition does not oppose the bills, but it places on record a number of concerns and asks a number of questions about this Government legislation. We seek a response from the Minister in his reply.
Ms MARIE ANDREWS (Peats) [5.38 p.m.]: I am pleased to have the opportunity to speak on the Central Coast Water Corporation Bill 2006, which is cognate to the Water Industry Competition Bill 2006. I am of the firm belief that the Central Coast community deserves a locally-owned water utility that can make timely and effective decisions on the supply of water and sewerage services in the region. This bill delivers on that promise. The current structural arrangements for the Central Coast water supply impede the effective management of water supplied by Gosford City Council and Wyong Shire Council. Both councils agree. The legislation was introduced following a formal request by both councils for a new statutory body to improve governance arrangements and streamline decision making.
I agree that the current decision-making structure is inflexible and does not deliver the best outcome for the people of the Central Coast. At present, all strategic decision making must be separately ratified by each council. Problems arise when Gosford and Wyong councils do not agree, which causes important water supply decisions to be delayed. The continuation of those governance arrangements is unworkable, particularly in the context of worsening drought conditions when increasingly difficult decisions need to be made.
One of the main objectives of the Central Coast Water Corporation is to allow councils to better manage their existing supplies of water. The Central Coast Water Corporation will be a locally owned water utility for the benefit of the local community. Let there be no mistake: This is not privatisation. At all times both Gosford and Wyong councils will be the only shareholders in the corporation. It is clearly stated in schedule 1 to the bill that the shareholders may not sell or otherwise dispose of their shares in the corporation. That means that only Gosford and Wyong councils will ever be the owners of the corporation. The corporation will have a constitution and a statement of corporate intent. Those documents will set the parameters of the commercial performance of the corporation. The constitution and statement of corporate intent will be tabled in each House of Parliament by the Minister for Water Utilities or his representative.
The corporation's board will include people with expertise in water and sewerage management, and commercial enterprise. It will have an independent Chair. All operational decisions of the corporation will be made under the authority of the board. The chief executive officer of the corporation will be responsible for day-to-day management. The bill removes wasteful duplicated decision-making processes and makes strategic planning easier and more timely. Importantly, local jobs will be protected. The Minister for Water Utilities, who is at the table, has made sure that the bill locks in employment protections for council staff affected by the establishment of the corporation. Both the consumer and the environment will benefit directly. The bill also specifies that the operating licence must include a condition to require the corporation to join an industry ombudsman scheme. The operating licence will guarantee improved accountability to Central Coast customers.
The corporation will be required to report on its performance against indicators to ensure that its water and sewerage services meet specified standards on water quality, service interruptions and pricing. Price regulation by the Independent Pricing and Regulatory Tribunal will continue to apply to water and sewerage services delivered by the corporation, just as it applies to the water and sewerage services delivered by Gosford and Wyong councils now. I urge both councils to work together on the necessary arrangements for the establishment of this corporation for the benefit of consumers and the environment. The passage of the bill will allow the people of the Central Coast to have their own unified water utility, with local jobs and assets protected, and improved delivery of water and sewerage services.
I refer to recent advertisements in one of the local newspapers in which the Leader of the Opposition and member for Vaucluse, Peter Debnam, and the Liberal candidate for the electorate of Gosford in 2007 claim that they will fix the water problems. The Liberal candidate for Gosford in 2007, Councillor Chris Holstein, is one of the longest-serving councillors on Gosford City Council and a former mayor. He has had ample time in which to fix the Central Coast water supply but has failed to do so. It has taken the Iemma Government to come to the rescue of Central Coast residents, who are now adhering to level four water restrictions. I welcome the Premier's recent announcement of a new dam to be built by the State Government at Tillegra, which will drought proof the Central Coast and the Hunter for the next 60 years. The Premier is on record as saying that he will not leave the Central Coast in the lurch, and he is certainly delivering on that commitment. I thank the Minister for Water Utilities for taking into account concerns raised by the unions involved about job protection and preservation of working conditions of affected employees. I take great pleasure in commending the bills to the House.
Mr THOMAS GEORGE (Lismore) [5.44 p.m.]: As the Leader of The Nationals and the shadow Minister indicated, the Opposition will not oppose the Water Industry Competition Bill. The objects of the bill are quite clear. It establishes a licensing scheme to provide for private sector involvement in the supply of water and the provision of sewerage services, establishes an access regime to ensure that certain monopoly infrastructure services involved in the supply of water and the provision of sewerage services are available to persons seeking access to them, and facilitates the resolution of disputes between persons operating certain sewerage infrastructure and persons seeking access to the contents of that infrastructure.
The bill also facilitates the resolution of disputes between private sector bodies and their customers in relation to the supply of water and the provision of sewerage services, enacts provisions to facilitate the construction, maintenance and operation of infrastructure for the supply of water and the provision of sewerage services, protects private sector involvement in the supply of water and the provision of sewerage services by means of the creation of offences for that purpose, and makes other provisions of a minor consequential or ancillary nature. The bill also makes consequential amendments to a number of Acts and enacts certain savings and transitional provisions, which have been needed for some time.
The Central Coast Water Corporation Bill 2006 is cognate with the Water Industry Competition Bill, which opens the door to competition and new investment in three key ways. First, it promotes new recycling businesses by enabling prospective sewer miners who are not able to reach a commercial agreement with specified service providers to have the terms on which they can mine sewers determined in binding arbitration conducted by the Independent Pricing and Regulatory Tribunal. Second, the bill promotes competition by establishing a comprehensive access regime to help new suppliers to negotiate arrangements for the storage and transportation of water and sewage using existing significant water and sewerage networks. Third, the bill ensures that licensees who wish to construct and operate new water and sewerage networks will be on broadly the same footing as public water utilities for things like laying pipes in public roads and reading meters. But at the same time the Water Industry Competition Bill establishes a licensing regime—
Mr David Campbell: It is not quite Google, but it is straight out of the Legislation Review Committee digest.
Mr THOMAS GEORGE: I remind the Minister at the table that he should be the last one to comment about this.
Mr DEPUTY-SPEAKER: Order! The honourable member for Lismore is referring to copious notes.
Mr THOMAS GEORGE: I thought I would be given that leeway. The reforms proposed by the Water Industry Competition Bill have been subject to extensive community consultation. As I said at the outset, the Opposition will not oppose the bill.
Mr GRANT McBRIDE (The Entrance—Minister for Gaming and Racing, and Minister for the Central Coast) [5.48 p.m.]: I acknowledge the contribution by the honourable member for Lismore. He did a wonderful job under difficult circumstances. Today is a very important day for the reform of the metropolitan water industry and the security of the community's water supplies. I am pleased to support the Water Industry Competition Bill, which will facilitate competition in the metropolitan water industry and encourage recycling for the benefit of consumers, the economy and the environment. The Government is committed to creating an environment in which these businesses can compete. Private sector competition promises to bring dynamism to the metropolitan water industry and, with it, innovation, new investment and technological advances in water management.
The bill gives private operators who want to establish water -recycling businesses an enforceable right to acquire the raw material they need from Sydney Water's sewerage network. The new State access regime draws upon the significant water industry regulatory experience of the Independent Pricing and Regulatory Tribunal. Despite what the Leader of The Nationals incorrectly said, unlike the Federal regime the State system will streamline economic regulation for the water industry under the control of one independent regulator while at the same time promoting competition and providing incentives to reduce costs and improve productivity. Importantly, the Water Industry Competition Bill ensures the continued protection of public health, the environment and consumers. The bill does not privatise existing public water utilities, nor does it change their pricing arrangements. The bill ensures the continuing protection of the community and helps to secure Sydney's long-term water future.
I turn now to address the Central Coast Water Corporation Bill. First, I point out that the water supply system on the Central Coast is owned and operated by Gosford City Council and Wyong Shire Council through the Joint Water Authority. The Central Coast faces many challenges when it comes to water. Currently the region is enduring a 15-year drought that shows no sign of easing. As a result of the drought we have been faced with level four water restrictions, which means tough limits on business and no outside use of water by residents of the Central Coast. I congratulate the residents and businesses on the Central Coast for doing everything they can to reduce the volume of water they are using.
The bill is the result of a request to the Government from the mayors of Gosford and Wyong to develop legislation to facilitate a more efficient and effective management structure. Under the current system the Joint Water Authority is not able to make decisions that are binding on councils. Instead, a recommendation is sent from the Joint Water Authority for ratification by each council. That dysfunctional process, which is often hijacked by local politics to the disadvantage of the local community, has proved to be inefficient in dealing with the ongoing water crisis on the Central Coast. The bill will allow councils to form a stand-alone water corporation that is owned by both Gosford City Council and Wyong Shire Council.
As the joint shareholders of the new corporation, the councils will set the operation and performance agenda, management practices and employment policies. The Iemma Government has stated clearly that it has no intention of taking over control of the Central Coast water and sewerage system. But, as it has failed to do in so many other policy areas, the Opposition so far has failed to outline its intention when it comes to water resources on the Central Coast. That is clearly because it has no plans. The Iemma Government has made significant contributions to secure the Central Coast's water supply. As recently as yesterday, the Premier announced a $342 million package to help to secure the Central Coast and Hunter regions' water supply for the next 60 years.
The heart of the package is a new 450-billion litre Tillegra Dam and water grid which will help to drought proof the Hunter and Central Coast region well into the future. The capacity of the pipeline between Newcastle and the Central Coast will be increased also from 27 million litres a day to 35 million litres a day, which is about half of the Central Coast's current daily usage. That is an investment in infrastructure to ensure that as our population grows we will have ample water resources for families, industry and businesses. That comes on top of other initiatives, including the provision of $2.5 million, again through the State-owned Hunter Water, towards the construction of a pre-treatment plant on the Williams River in the Hunter Valley that will treat nutrient-enriched water before sending it to the Central Coast.
Other initiatives include the extension of the Water Savings Fund to include the Central Coast region, thus providing rebates to Central Coast residents who install rainwater tanks and water-efficient washing machines. We have also reduced the environmental flows on Ourimbah Creek to allow an additional four megalitres to be taken per day from that water source. As well, an important and innovative measure is a commitment from State-owned Delta Electricity to build an $8 million water recycling plant at the Vales Point Power Station that will save 464 megalitres every year, or enough water to supply 2,500 Central Coast homes. The Iemma Government is doing its bit to help the councils to secure the region's water supply. It is unfortunate that the same cannot be said about the Opposition.
I have been advised that the Minister for Water Utilities has not received one piece of correspondence from the Opposition—not one letter of concern from the tired old honourable member for Gosford, not one letter of concern from the shadow Minister for Water Utilities, Andrew Stoner, and not a single letter of concern from the Leader of the Opposition. It is quite evident that the New South Wales Opposition does not care about the State's water crisis. Most important of all, the State Opposition has no policies and no plans to help to secure the Hunter and Central Coast regions' water supply. The Opposition is out of touch and out of ideas when it comes to the Central Coast.
I take this opportunity to encourage the Wyong Shire Council to come on board and embrace the positive change it has requested. The people of the Central Coast deserve clear leadership when it comes to the management of our most precious resource—water. The bill cannot make rain fall from the sky, but it will allow councils to better manage their assets and encourage greater investment in our water supply system. It will allow councils to put in place an effective management team to deal responsibly with the water crisis on the Central Coast. Honourable members would be aware that some council workers on the Central Coast had reservations about this proposal and any impact it may have on their job security and employee entitlements. The secretary of the United Services Union [USU], Ben Kruse, and the northern regional manager, Stephen Hughes, have worked with the Minister for Water Utilities to ensure that the rights of employees are protected.
I was directly involved in the meetings, along with the honourable member for Peats. The securing of local jobs is a priority for me, and I have actively lobbied to keep these jobs under council control and on the Central Coast. The Minister has listened to the USU and its concerns have been resolved satisfactorily. I acknowledge the hard work of USU delegates at the Wyong Shire Council— Tom Baker, George Lewis and Paul Watson—and at the Gosford City Council—Paul Ryan and Max Bugden. These men have been active in standing up for the rights of their colleagues. I congratulate them on their hard work. They stood up and fought to protect the wages and conditions of their fellow workers. The Minister for Water Utilities and the Government have listened. The bill provides a new direction for water management on the Central Coast and deserves the bipartisan support of the House, which I understand will be forthcoming. I commend the bills to the House.
Mr CHRIS HARTCHER (Gosford) [5.56 p.m.]: The Central Coast has been in the grip of a drought for 15 years. The region's major dam is only 15.3 per cent full. The Central Coast faces a serious water crisis. The people of the Central Coast have responded magnificently to the crisis. They are now living with level four water restrictions, which effectively prevent them from watering their gardens in the usual way. When washing their cars they are restricted to using buckets. The people who live on the Central Coast acknowledge that the region faces a severe water crisis and they expect governments, the State Government especially, to take appropriate action to protect them. So far the State Government has not announced any plan for the short-term or long-term provision of future water resources on the Central Coast.
The Government has not put forward any proposal in relation to stormwater harvesting or recycling. The only effort made by the State Government so far is the introduction of legislation to create a different board of management. The State Government is like the Titanic when it was heading towards the iceberg. All the Government wants to do is change the people on the bridge. For many years the New South Wales Government has been aware that the water crisis has been building up on the Central Coast, yet it has descended to politics to address the issue. Meetings have been held only with Labor Members of Parliament. Liberal members of Parliament, such as the Federal members for Robertson and Dobell and me, have been excluded.
The State Government calls for a bipartisan approach to this matter, yet has made every attempt to exclude Liberal members of Parliament from participation. When I mention bipartisanship, what is the response from the Minister for Water Utilities? He replies, in a sneering manner, "Who said that? Who said we should be bipartisan?" In doing so, the Minister reveals that he has sought to play politics with this issue, just as he plays politics with every issue, and he demonstrates that he has no shame. He is quite happy and unconcerned, but the people of the Central Coast are concerned. They want a water plan and they want a coherent policy from the Government upon which they may base their future plans.
What has the State Government done? It has given us the Central Coast regional plan, which will pour thousands more people onto the Central Coast, as announced by the Minister's colleague the Minister for Planning. There is no provision in the Central Coast strategy for increased water services to the Central Coast. No opportunities have been taken up. All we will have is more people—no jobs and no water. That is the Labor Party's plan for the Central Coast. The State Government has attempted on four occasions to take over the Central Coast water system, and this legislation is yet another attempt to do so. The board will have two members drawn from councils who have to be approved by the Minister—in other words, Labor Party members—and one appointed by the Minister. The board will be totally under the Minister's control: it will be a Labor Party board.
This is the Government's fourth attempt to take over the Central Coast water system. The last attempt was in 1996, when the Minister for the Central Coast and the honourable member for Peats, in their usual supine way, supported the Government's attempts, but the honourable member for Wyong, who is retiring in March 2007, and I opposed it. The State Government was forced to back down. In this latest attempt to take over the Central Coast water system, the Government has proposed the establishment of this board, which is to be known as the Central Coast Water Corporation. The United Services Union [USU] has been told that all jobs will be safe, and the Minister's second reading speech referred to that. The Minister said:
I also acknowledge the commitment made by Gosford and Wyong councils to recommend that the corporation sign referral agreements under section 146A of the Industrial Relations Act and common law deeds, which ensure that industrial issues are dealt with under the New South Wales industrial relations system.
That is not the case. Notwithstanding the High Court's decision today to validate the WorkChoices legislation, a legal opinion headed "Memorandum of Advice" signed by Tim Robertson, SC, and dated 10 November 2006 significantly states:
In my opinion, s.146A of the Industrial Relations Act ("IR Act") is almost certainly invalid. The provisions of the Bill which concern security of employment in the Water Corporation are also probably invalid. I am also concerned about the extent to which the Bill when enacted, is capable of preserving accrued entitlements to leave. The reason for my doubt about the validity of these provisions is that they are probably inconsistent with the Workplace Relations Act 1996 (C'th).
In other words, even before the High Court's decision Senior Counsel advised that this legislation provides no protection granted to employees of the Central Coast Water Corporation. All we have are the empty words of the Minister for Water Utilities, echoed by his supine colleague, the Minister for the Central Coast, who simply echoes the party line. He praises the USU delegates but does not tell those delegates that they are literally being sold up the river by the Government, and that they will not have security of employment. In fact, the legislation does not give them security of employment. In 1996 the honourable member for Wyong and I fought for the workers; the Minister for the Central Coast and the honourable member for Peats did nothing for them. Those people have now been betrayed by the Government through this legislation. The proof of the pudding will be in the eating.
The Coalition proposes to move amendments at the Committee stage relating to the structure of the board. The legislation does nothing to protect workers and does nothing to advance the cause of water planning for the Central Coast; it will not give the Central Coast a single litre of extra water. The proposal for a new dam was announced yesterday by the Premier, when he took a helicopter trip over the Hunter and the Central Coast, but was too frightened to include a single Labor member of Parliament in that trip. The Minister locked himself away and did not have one Labor member of Parliament, either from the Central Coast or the Hunter, with him. The proposal is for a dam on the Williams River which will not be completed in 10 years at the very least. The dam will allegedly cost $354 million—no-one knows the final cost—but it will not be available for 10 years. What happens in that 10-year period? What will Labor give the Central Coast in that 10-year period? Zero!
The Labor Government has not advanced one dollar for water on the Central Coast. The money that the Labor Party claimed it is putting into the Central Coast will come through the Hunter Water Corporation, a statutory body that has entered into commercial agreements with Gosford and Wyong councils. No money is coming from the Labor Government. The only money that has gone to the Central Coast has come from the residents of Gosford and Wyong and from the Federal Government. The Labor Party has put not one dollar into the Central Coast water system, and it is disingenuous in the extreme for the Minister for Water Utilities or, more significantly, the Minister for the Central Coast and the honourable member for Peats, to pretend that any money has been allocated by the State Government because it has not.
What does the system that the Minister is setting up give to the Central Coast? It provides not two water bodies, but three. As Wyong Shire Council has stated, if all water, sewerage and drainage functions, including assets and staff, are transferred to a separate body, as proposed by the Minister, there will be three separate bodies on the Central Coast to run water, sewerage and drainage—the new water body plus the two councils— instead of the current two, while drainage and other functions will still vest in the two councils. Supporting three organisations instead of two will result in increased costs to ratepayers, who will get separate bills and will need to go to separate offices to deal with water, sewerage and drainage issues. Approval will have to be sought from two separate bodies to carry out a development. Ratepayers will have to deal with a board covering all of the Central Coast which will be more remote and harder to access. There will be a lower level of service and a significant loss of jobs. Effectively, there will be a transfer of ownership from Central Coast ratepayers to the Government.
To maintain local ownership the Government's proposal provides for the councils to be the shareholders of the new water, sewerage and drainage body. However, once everything is set up and separate from the two councils, there is nothing to stop a future Labor government, if there is one, making a simple legislative change to transfer the shareholding to the State. As shareholder of Hunter Water and Sydney Water, the Government currently takes a huge dividend from those bodies. Dividends are simply ripped out of Sydney Water and Hunter Water, and those dividends come from the ratepayers of the Hunter Valley and Sydney. A similar dividend could be, and probably will be, paid by Central Coast ratepayers into the Government's coffers in the future.
There is no guarantee from the Minister, and certainly not from the supine Minister for the Central Coast or the honourable member for Peats, that they will prevent Central Coast ratepayers being slugged in future to pay a dividend to the Government as Sydney Water and Hunter Water ratepayers are compelled to do. The Government has tried on four previous occasions to take water and sewerage operations away from the two councils on the Central Coast; those attempts have been successfully resisted. If it were not for the water crisis, people would be crying out for this latest usurpation to be resisted. However, because the water crisis is so great and because the people of the Central Coast want the State Government to provide whatever trivial support it can give, they will not rise up against this legislation, as long as it delivers for them. The test will be: Will we get a single extra litre of water through this legislation? The answer is a resounding no. There is no guarantee of extra water for the Central Coast and no guarantee for employees in the union that the Labor Party pretends to protect. [Extension of time agreed to.]
In his written advice dated 10 November 2006, referring to the so-called immunisation legislation that the Labor Party passed in New South Wales some time ago in respect of Crown employees, Tim Robertson, SC, said:
The purpose of the first Act was to immunise these Government employees from the WR Act.
I doubt whether the legislation was effective to do so but its validity is not relevant for present purposes. It is sufficient to note that the legislation did not extend to local government employees, and the Water Corporation may employ such staff as it requires to exercise its functions. When it does so, the Water Corporation will not represent the Crown—
Section 6 (a) of the Act—
or, for that matter, the Councils. Accordingly, it is not excluded from the WR Act.
In other words, workers are not excluded from the Federal Workplace Relations Act; they are caught by the Workplace Relations Act, which is held valid by the High Court. The pretence by the honourable member for the Entrance and by the Minister that they will be protected is revealed simply as hollow words, just as the honourable member for The Entrance had to admit that he does not have a water tank and that he draws his water from the river.
[Interruption]
He said in Parliament that he drew his water from the river.
Mr Grant McBride: Point of order—
Mr CHRIS HARTCHER: Did he have a licence to draw his water from the river?
Mr DEPUTY-SPEAKER: Order! The honourable member for Gosford will resume his seat.
Mr Grant McBride: The honourable member for Gosford totally misquoted me. I said that I live near a river.
Mr DEPUTY-SPEAKER: Order! That is not a point of order. The honourable member for Gosford has the call.
Mr Grant McBride: I made no comment about drawing water out of the river. I never mentioned it. The honourable member for Gosford stands corrected. He should have a look at Hansard.
Mr DEPUTY-SPEAKER: Order! The honourable member for Gosford has the call.
Mrs Shelley Hancock: You touched a nerve.
Mr CHRIS HARTCHER: As the honourable member for South Coast said, I touched a nerve. The Minister has been caught out. When he was asked about water conservation he admitted that he lived near the river and, by implication, that he drew his water from the river. We will see what happens in relation to that issue; we have not heard the end of that story. I think the Minister will be hearing a bit more about it as, tragically, the water crisis on the Central Coast deepens. The Minister's colleague the Minister for Water Utilities is doing nothing to assist people on the Central Coast as a result of the crisis they are now facing. Wyong Shire Council wrote to the Minister for Water Utilities and made a number of relevant points. It said:
Firstly, this current review—
A review that the Minister commissioned—
which is the fifth one over the last 15-20 years, was initiated by your Government in 2004—
In 2004 everybody knew that the Central Coast was facing a water crisis—
when Minister Sartor instructed the two Councils to examine the issue.
In 2006—two years later—all we have is words on paper. This bill will simply set up a new Central Coast water structure. It contains nothing about a water plan, nothing about increasing water for the Central coast, and nothing about State Government funding for water on the Central Coast. Two supine Government members simply go along with everything the Minister proposes because they think that is the way to advance in the Australian Labor Party. At the end of the day the people on the Central Coast are the big losers. Wyong Shire Council went on to say:
In meetings with Minister Sartor in 2005, he indicated that he would leave the final decision to the two Councils...
Lengthy and expensive studies were carried out by consultants... who examined a range of options.
Council brings this issue home to the Minister when it said:
Unfortunately, no progress was made by the State Government officers to advance this matter until early this year when the matter was further pursued by the two Councils. At that stage, you—
That is Minister Campbell—
had taken over the role of Minister for Water Utilities.
Despite the water crisis and the fact that everybody knew the dam levels were dropping each month, under this Government nothing happened in 2004 and 2005. Something happened only at the start of 2006. The water crisis got deeper and Labor did nothing. The ship headed to the iceberg and all we got was a change of members on the bridge. Wyong Shire Council went on to state:
Council officers worked with officers of DEUS to agree on the framework for legislation...
Unfortunately, your Government has not seen fit to honour the undertaking given by Minister Sartor in 2005...
So the Government failed to honour its undertakings and it failed to provide for the workers who are being sold up the river because effectively they will not be protected. As the legal advice states, there is nothing to stop the Central Coast Water Board sacrificing workers. Two members of that board are to be Labor members of councils appointed by the Minister—that is what they will be—and one member is to be appointed by the Minister from outside. We do not know who that will be but it will certainly be one of the Labor Party's mates. Eventually those workers will be sacrificed. They might not be sacrificed before 24 March but their heads are now on the chopping block.
People on the Central Coast will be dealing with yet another bureaucratic structure that will not advance them. The Opposition will move amendments in Committee and it will argue their validity at that time. However, I make this crucial point: I acknowledge the presence in the Chamber of the honourable member for Wyong who, back in 1996, fought valiantly to preserve autonomy on the Central Coast. All honourable members are aware that the honourable member for Wyong is now being forced out of the Parliament by the Sussex Street machine. The honourable member for Wyong can and will speak for himself. I will not shed any crocodile tears for him but the honourable member for the Entrance will.
We now have three bodies, not two, to run Central Coast Water. This Government has no plan for water recycling, water conservation, or stormwater harvesting. We have no State Government money but we are left with the pretence of money through the Hunter Water Corporation. We have a new bureaucratic structure but no guarantee of employment for workers employed by the United Services Union. Nothing has been done over a two-year period since the review was commissioned in 2004. The Minister has done zilch for the Central Coast. This legislation will probably not give the Central Coast anything at all. From this day on the Labor Party will bear responsibility for the water crisis faced by the Central Coast.
Mr PAUL CRITTENDEN (Wyong) [6.16 p.m.]: I support the bill. Over 10 years ago I publicly indicated my preparedness to discuss such a proposal. In 1996, given the projected population growth on the coast, the relatively newly elected Labor Government, of which I was proud to be a part, commissioned a review of the Gosford-Wyong water supply. That was well before the devastating impacts of the most recent drought that are now being felt. It is obvious that that has had a major impact on our water supply—an issue that requires planning and strategic thought.
During the course of his contribution the honourable member for Gosford somehow or other managed to align himself with me. Cursory research reveals an article in the Central Coast Express Advocate of 11 December, which states that Mike Gallacher, Chris Hartcher and Grant McBride were in a bid to block any proposal to remove control over water and sewerage from the coast. Clearly the honourable member for Gosford has confused me with the honourable member for The Entrance, something about which I particularly object.
In reality, the two councils involved in 1996 were able to play a game, erroneously praising themselves and their abilities. They also ran a ratepayer funded media campaign against the review process. This Government joins those same two councils in celebrating this legislation. I regret that it did not occur 10 years ago. Ten years ago we would have had time to plan for the supply difficulties we now face. Yesterday Premier Morris Iemma announced the Tillegra Dam project, which effectively will dam the Williams River. I support a project of vision that will give people on the Central Coast and in the Hunter region added security. I am pleased that that has occurred.
As we go forward into the future we must ensure that there is no repeat of what occurred in 1996 and 1997. Why did the citizens of the Central Coast have to wait until yesterday for some kind of action to resolve the tug of war between Gosford and Wyong? When it came to water the only thing those councils could agree on was the fact that they shared a common enemy. If as much effort had been put into securing water supplies as was put into mobilising against the 1996 review, the current water crisis might have been much less severe. In fact, in December 1996 the editorial of the Central Coast Express Advocate read:
… the people of the Central Coast have forked out around $500 million to have what is described as the Rolls Royce of water and sewerage systems
That system is now better described as a Trabant—far removed from what the people need or desire and they still paid through the nose for it. The real issue for us is how to get service delivery. I think the Premier's announcement yesterday goes a long way towards achieving that goal. I will not quote the comments of the Minister for the Central Coast on 16 April 1997 but I hope we can go forward in a policy sense. There are pressing issues on the Central Coast. Recently I made a private members' statement about the water shortage on the coast and how it is affecting people's lifestyles. We do not need more political hysteria; we need some hard decisions. Fortunately, yesterday I think the Premier started down the path of taking those hard decisions.
Mrs SHELLEY HANCOCK (South Coast) [6.20 p.m.]: The first object of the Water Industry Competition Bill is to establish a licensing scheme to provide for private sector involvement in the supply of water and the provision of sewerage services. I note that the Leader of The Nationals mentioned Services Sydney Pty Limited in his contribution. Representatives of Services Sydney visited me in my office approximately two years ago, when discussion was initiated about proposed increased extractions from the Shoalhaven River. At that time the representatives discussed with me at length—as they have done since—the fact that it would be unnecessary to increase extraction from the Shoalhaven River if Sydney embarked upon a serious recycling and stormwater harvesting scheme.
Much has happened since that first meeting, and this bill is a result of the failure of the Services Sydney bid. I was interested to hear the Leader of The Nationals mention that discussion, because it is relevant to our consideration of the bill this evening. Services Sydney was right, and the Government is wrong in respect of its proposal regarding the Shoalhaven River. The Government proposes to address Sydney's water crisis by taking an additional 30 billion litres of water a year from the Shoalhaven River. That is about the extent of the Government's plan.
In the past couple of years the Government has come up with a number of different ideas—many of which I have spoken about in this place—but the hallmark and centrepiece of the Government's plan was always building big, new pipelines from the Shoalhaven River, at a cost of about $680 million, to pump an extra 30 billion litres of water from the river in order to save Sydney. That is the only real plan the Government has.
In fact, in August 78 per cent of Sydney's water supply was pumped from the Shoalhaven River in a single week. In the following week 82 per cent of Sydney's water supply was pumped from the river. What would this Government do if it did not have the Shoalhaven River? The Government has failed to do as Services Sydney suggested and embark upon serious recycling and stormwater harvesting. In 12 years the Government has not come up with any serious recycling plan. The Government talked about desalination but it put that plan on the back burner when it discovered that a desalination plant would be energy hungry—and it does not want that sort of publicity.
The Government has also talked about aquifers. About six months ago the Government announced the wonderful discovery of two aquifers—at Kangaloon and Leonay—that would apparently meet all of Sydney's water needs. I note that the Minister for Water Utilities is pacing the floor of the Chamber somewhat nervously, because he knows I am right. Those two aquifers will not come up to scratch. The scientific studies that have been undertaken with respect to the aquifers are beginning to reveal that they will not be viable. Yet the Government seems intent upon proceeding to extract water from the aquifers.
Returning to the Shoalhaven River, the Tallowa Dam has been a goldmine for this Government. Water continues to be extracted from the Tallowa Dam, which was constructed in the 1970s by a Liberal-National Coalition Government. It has never been our intention to stop water transfers from Tallowa Dam, which was part of the original plan. Our opposition, and that of the vast majority of people in the Shoalhaven and Kiama regions—probably 99 per cent of them—is to increasing that extraction by 30 billion litres per year. But in the past couple of weeks the water level in the Tallowa Dam has dropped seriously and today there was an announcement that the South Coast and the Shoalhaven—which constituted part of the 3 per cent of New South Wales that was not in drought—are now in drought.
If the Minister were to cross the Shoalhaven River this week he would notice the alarming drop in water levels in that river. Very soon the Government will not be able to extract as much water from the Shoalhaven and Tallowa system as it has done in the past, because that resource will have dried up. The Government will have no alternative and no plan for solving Sydney's water crisis other than to pray seriously for some heavy rain—and that is not on the horizon.
The South Coast is now in drought, which means that virtually all of New South Wales is in drought. The Shoalhaven River—a goldmine—is drying up and residents of the South Coast and the Shoalhaven bitterly resent the fact that this Government is all out of options. Two years ago it failed to consider the Services Sydney plan and it did not look at any other options. It simply decided to rely on the Shoalhaven River system. I am pleased that this evening the Leader of The Nationals referred to Services Sydney and recycling. On many occasions the Leader of The Nationals and other Coalition members have raised the issues of recycling, reuse and stormwater harvesting. I am proud to say that in the Shoalhaven area we have the regional effluent management system, which was instituted by Shoalhaven City Council some years ago and is working very well.
Mr David Campbell: With a subsidy from the Government.
Mrs SHELLEY HANCOCK: Yes, the council received some assistance from the Government. I certainly acknowledge that. But at present the people of the Shoalhaven are extremely angry. They vented their anger at a rally that I organised on 17 September. There has been mention this afternoon of petitions—I think there was discussion of petitions against WorkChoices—and petitions have been flowing in opposition to the Government's plans to build more pipelines and to pump more water from the Shoalhaven River. The Government's response has been to ignore those concerns absolutely. It has ignored the concerns expressed by oyster growers, prawn growers, fishermen, and the tourist industry up and down the Shoalhaven River. They rely on that resource for their livelihoods, as does the town of Nowra and the township of North Nowra.
The people of the Shoalhaven are aware of how precious our water resource is but this Government is not. It favours outdated, antiquated schemes that involve building dams. Construction of the Tillegra dam is proposed for the Hunter. I suspect that the Government will soon resurrect plans to build the Welcome Reef dam on the Shoalhaven River, which will destroy that river absolutely and utterly. I note that a couple of weeks ago the Treasurer was unable to answer a question from Reverend the Hon. Fred Nile in the other place regarding the construction of the Welcome Reef dam. The Treasurer could not rule out that option. So it appears that dams are back on the Government's agenda—and dams must be considered to be twentieth century technology.
The Government is looking for a miracle, but dams take a long time to build. I suggest that the Central Coast is in serious trouble. For 12 years the Government has failed to implement any serious plans that involve being frugal with water. It has also failed in many other areas. The Government does not care about water. The people of the Shoalhaven and the South Coast and those in rural and regional areas generally know how to conserve water. They see where the water comes from, they watch water levels dropping, and they conserve that precious resource. Unfortunately, Sydney residents are sometimes unaware of the source of their water and they waste that resource. The Government is allowing them to waste water while it continues to pump supplies from a beautiful, wild, scenic river.
It is wrong, and the people in my electorate and those in the electorate of Kiama know it is wrong. They can see that the Government will do to the Shoalhaven River what it did to the Hawkesbury River: there will be no environmental flows. Discussions have been held about so-called agreements with the council and this Government but they are yet to be signed. There are all sorts of spin, cover-up and shady deals, which are supposed to benefit the river, but no agreement has been reached and nothing has been signed off. Meanwhile this Government will continue to take as much water as it needs when it needs it from the Shoalhaven to supply Sydney to solve its water crisis.
The lesson to be learned is that governments cannot sit back for 12 years and see an impending disaster and do nothing about it. I understand that the Government is concerned about votes in Sydney and about what will happen when the Warragamba Dam slips below 40 per cent to 30 per cent, as it will. If the Shoalhaven River had not been pumped to the great extent it was in two weeks in August, it is estimated that dam levels would have fallen to below 25 per cent. When pumping from the Shoalhaven River stops, the level of Warragamba Dam will drop below 25 per cent, which will not be a very good media story. So the Minister and this Government have to come up with a much more serious and practical plan to appease the residents of Sydney and Shoalhaven, who feel cheated, who have been lied to, who have not been consulted and whose concerns have been ignored.
[Mr Deputy-Speaker left the chair at 6.33 p.m. The House resumed at 7.30 p.m.]
Mr STEVEN PRINGLE (Hawkesbury) [7.30 p.m.]: I wish to raise some issues that concern the Lower Nepean Hawkesbury Water Users Association, which comprises farmers and food growers who produce in excess of $500 million worth of fresh fruit and vegetables—lettuce, cauliflower, broccoli, berries, potatoes, onions, carrots, pears and apples—consumed by the people of Sydney, as well as much of the turf that is used in new and established housing estates. The farmers are dependent on water that is captured by Warragamba Dam, used by households and industry, goes to sewerage treatment plants, and is then returned to the Hawkesbury River system. I acknowledge that often the water is returned to the river system in an unclean state, but at least there is a flow of water going back into the Hawkesbury-Nepean River so there is some water for the farmers to use. For some it may be difficult to believe that the Hawkesbury-Nepean River largely comprises saltwater, until one gets to the Windsor area. Without the recycled water, the saltwater would go even further up the river and it would be even more difficult for these farmers to provide for the fresh fruit and vegetable requirements of Sydney.
The bill allows new players into the industry. The association simply asks that contracts for these new players contain a clause requiring that some of the water be returned to the river, to ensure a reasonable flow, which will allow the farmers to continue to pump and not have to face any cease-to-pump days. Uncertainty for the industry will severely affect its long-term viability and investment potential. The farmers also want the proposed water sharing plan to be made available in draft form as soon as possible so they can plan for the future. The bill, by at last allowing new players into the industry, is certainly welcome. Indeed, I have long advocated the Services Sydney proposal and all the other recycling proposals we have seen. However, we also need to ensure that there is an adequate return of water to the Hawkesbury-Nepean River. Clean water needs to be returned to the river so it is a viable food source for our many farmers in the Hawkesbury-Nepean region. I simply urge the Government to ensure that future contracts contain a clause requiring that some of the water is returned to the Hawkesbury-Nepean River, so it can be utilised for farming throughout the Sydney area.
Mr BARRY O'FARRELL (Ku-ring-gai—Deputy Leader of the Opposition) [7.36 p.m.]: I welcome this legislation, which seeks to introduce competition into the delivery of water within the Sydney metropolitan area and on the Central Coast. We know the history of this legislation. We also know the history of the attempt by Services Sydney to crack into this market and the obstacles that have been placed in its way, and in particular the former Labor Premier's opposition to any attempt to introduce competition into the provision of water, to enable the sorts of reforms to water and waste water that are envisaged by this legislation.
I raise two issues with regard to the legislation. First, I ask the Minister why it is proposed that the Independent Pricing and Regulatory Tribunal [IPART], rather than the Australian Consumer and Competition Council [ACCC], be the regulatory regime. I say that genuinely, given that it seems we already have in this nation at all ministerial councils calls for harmonisation to reduce regulatory duplication. If we are genuinely committed to that goal—I suspect the Minister would say he is—I ask why we would seek, under the legislation, to make the IPART the competition watchdog.
At the expense of being accused of deviating, my concern about the IPART is not that it is not an independent pricing and regulatory tribunal. If I were to speak honestly on behalf of, for example, public transport users over the past 12 years, I think one would find that there is not a great deal of faith in the IPART's rigour in ensuring that when agencies and others claimed better services if fares were increased, those better services were produced. I do not want to be political about that, but I simply make the point that the legislation would be a far more robust structure if it revolved around the ACCC.
Obviously this legislation is directed at one element of the water policies required to secure Sydney's future water supplies, and the Minister clearly understands the various facets of that. Recycling alone will not provide the security we need for the future, harvesting alone will not provide that security, the amplification of existing dams and the like will not provide that security, and the continued frugal use of these precious water resources alone will not deliver that security. All those things collectively are needed. The way we need to regulate behaviour, largely, is by providing the sorts of incentives necessary to get people to do the right thing.
In my council area, during the first year in which water regulations came in we recorded the greatest reductions in water usage across the Sydney metropolitan area—which is no mean feat for an area that is characterised by single homes on fairly large blocks with the sorts of exotic gardens that Ku-ring-gai is known for. Whilst recent surveys show that other areas, which are perhaps characterised by more medium density housing, have done more, the reality is that the area that I represent understands—as do other parts of Sydney—the need to marshal the use of water and that we will never go back to the way in which we used water previously.
The other matter relates to wider issues that the Minister obviously faces daily and that councils grapple with on a daily basis, but which provide great frustration to many residents across the city in the way in which they seek to do their bit—and perhaps go beyond their bit in relation to water issues. With the Minister's forbearance, I will take three minutes to highlight something that was raised at the Aussies Sustaining Australia seminar, which I think was at the start of last week. One of my constituents spoke briefly at the seminar and said:
I am Alicia Campbell. My husband Jason Young and I have two sons; Zane who is 6, and Luka who is 3. We all live in Turramurra, in Sydney, in a home that we love and are proud of.
Our home has a 25,000L rainwater tank. We drink, wash, and at the moment flush—rainwater! When it rains, like it has this weekend, we are absolutely delighted!
So far, in the 1 year that we have lived in our home; we have saved just over 90,000L of water that DIDN'T come from Warragamba Dam!
We also have a wastewater treatment system that is being monitored; fully cleaned 'grey' water will be used for toilet flushing, the laundry, and irrigating our backyard. The results of the tests on our wastewater system are coming back—as clean as a mountain stream. Next year this will give us an extra 50,000L to be reused and reused endlessly.
That is nearly 150,000L per year that we have saved. Over 25 years we will save 3.75 Million litres of water.
For the moment, we will be growing more of our own vegetables, fruit and looking after our chickens—so we have our own organic eggs. As we can afford, we intend to regularly make improvements to our home to make it more sustainable. We are planning for solar panels to produce electricity. The satisfaction: Of making water when it rains and making electricity when it is sunny is irresistible.
I want to change the world. The first place to make a difference is me. Then my family; and my friends can see what I am doing.
The environment: This world; is the only one we've got.
I believe that all governmental policies should be aimed at rewarding individuals and businesses. Rewards, for each positive step towards reducing greenhouse gases, and rewards for each water saving action.
I want this world to be a better place: it starts with me and you.
I do not think anyone in this House would not admire the spirit that Alicia and Jason have put into their home, which I visited last Thursday lunchtime. What they have achieved is an extraordinary feat. But I regret that in talking to them about the way in which they have gone about this process, too often they made the point that they were pioneering; too often they made the point that they found it difficult to get information; too often, like many of us, they found too much information out there and great difficulty in trying to resolve what to do; and too often governments at both State and local levels provided few examples or incentives for people regarding what to do.
I say again that it is terrific to see the sorts of competition that this legislation seeks to bring into Sydney Water, but we need to do more than that. We need to make it as easy as possible for each and every resident across the city and across this State to do his or her bit in trying to address the water situation that faces this nation. I commend Alicia Campbell and Jason Young for what they are doing. I commend this legislation to the House and I seek a response from the Minister in relation to IPART and the ACCC.
Mr ALEX McTAGGART (Pittwater) [7.42 p.m.]: I support the Water Industry Competition Bill and cognate bill, and I acknowledge the Minister for Water Utilities at the table. The cognate bill deals with water issues on the Central Coast. I merely want to say that it is up to the local members and Central Coast communities to fight for their own water service. Tonight I speak about licensing principles that free up access to infrastructure and resources because it is important to acknowledge that both stormwater and sewage are very valuable resources.
Clause 7 (d) of the principal bill, under the heading "Licensing principles", refers to "the promotion of production and use of recycled water". That is the key point of the bill and I welcome this initiative. In Pittwater we have the Warriewood sewage treatment works, which uses potable water in its treatment process and then discharges treated water into the ocean via the Warriewood sewer outfall. Fortunately, the outfall finishes at the beach line; it does not go one kilometre out to sea as originally planned. I say "fortunately" because we regard that discharge as our own, which gives us an opportunity to take charge of it.
Pittwater Council and the community want to treat that water; clean it and use it on our playing fields. Then we want to discharge it back into environmental flows in our creeks because we have a reduction in creek flow. Also, in the future we want to service the approximately 3,000 new homes that we will have following the Ingleside land release. Ingleside is up on the escarpment, and the Minister for Planning has given instructions to prepare for the land release as part of the Metropolitan Housing Strategy. We want to be able to treat this water ourselves, have it sent up to Ingleside and put through the co-located pipes. We want to be able to use the grey water for flushing and all the other recyclable uses. We want to discharge it into the creek line corridors at Ingleside so that it can run back down and flush through to make up for water we have lost. A couple of significant golf clubs are capturing the water on the creeks that pass through their land and reusing it. Also, as the water passes through, it is picking up nutrients and phosphates, thereby exacerbating the problem of the influx of weeds in the Warriewood wetlands. We need to address these issues.
As a community we want to get hold of that water: we do not want to pay for it; we want to use it and be responsible for the recycling process in our local government area. We have the expertise and the will within our community to do this. On the passing of this bill I will encourage Pittwater Council and seek support from the councillors, over whom I have a little bit of influence, to form a water corporation so that council, on behalf of the community, can lock up this valuable resource for the residents. At the moment Sydney Water discharges this water into the ocean. It is an asset, but it is being thrown away. We want to be able to use this very valuable asset. I support initiatives that freeze up infrastructure to allow us access to it. Clause 59 (3), under the heading "Damage to public roads and public reserves to be made good", states:
The cost of carrying out the work may be recovered by the local council or roads authority in a court of competent jurisdiction as a debt owed to it by the network operator.
Unfortunately, that is not good enough. About eight or nine years ago—and the honourable member for Manly will recall this—contractors cut up the centre of the road to get to our electricity mains, which were underground. We are still suffering from the poor repair job done by the contractors. I will not name them but they were a jolly band of Irish contractors and labourers. I think they went broke three or four times, but they kept reappearing—same trucks, same excavators, same people, just a different name on the side of the truck. Quite obviously, they were avoiding their responsibilities to repair roads and footpaths.
Under clause 59 (3), relating to the cost of carrying out the work, I ask the Minister to insist on a bond to enable the council or the roads authority to recover costs. It is imperative that before work commences, a dilapidation report is done because I understand in previous years disputes have arisen as to the condition of roads before contractors cut them up. Some councils—not Pittwater Council—have endeavoured to have the cut up road replaced by a nice, shiny road. So a dilapidation report needs to be done first, and a bond needs to be put in place because subcontractors tend to go broke. Apart from those two points, which might preserve the integrity of roadworks, I commend the bills to the House.
Mr DAVID BARR (Manly) [7.49 p.m.]: I support the bill. It is an important initiative. The electorate of Manly hosts the North Head sewage treatment plant, through which flows 40 per cent of Sydney's sewage. It could be said that Manly is on the wrong end of 40 per cent of Sydney's toilets. The northside ocean outfall sewer commences at Blacktown, 46 kilometres from Manly, and wends its way to Manly. The content of that sewerage system is treated to a degree, but something like 60 to 65 of the biosolids end up out to sea, and about 35 per cent is recovered for various agricultural uses.
We have not been doing nearly enough recycling, or using interception processes and reusing our sewage and undertaking sewer mining. This legislation is an important step in the right direction because it will enable private sector entities to negotiate with Sydney Water and Hunter Water to use existing water and sewerage infrastructure to avoid the need to build duplicate infrastructure to enter the market. That is a critical issue.
At the moment Sydney uses more than 600 gigalitres of water a year and over 400 gigalitres ends up out at sea. Currently, we are recycling 15 gigalitres, and the Government proposes to extend that to 75 gigalitres. But even 75 gigalitres is not a high proportion of the 400 gigalitres that goes to sea, or of the 600 gigalitres that we use. We ought to be doing much more to waterproof our cities by reusing water in a sensible way to ensure that Sydney is water sustainable. In the past we have undervalued water as an asset, using potable water where there was no need for that, and have not done enough recycling.
I have said in this House before that I think we need a combined Federal-State infrastructure program to provide water sustainability. I think that is the way we should move. But, in conjunction with that, this kind of legislation, which will allow non-government entities to tap into the infrastructure, is a way of providing a varied approach to water recycling. That may mean more interception and a devoluming of the system so that not so much ends up going to the ocean outfall sewers.
Many honourable members have made mention in this debate of Services Sydney. In principle, I support the ideas that those members put forward. That is a kind of centralised model in that they propose tapping into the system at the ocean outfalls, centrally treating the sewage and water, pumping it back into the catchments and using the solids for fertiliser for agricultural or rural purposes. That is one model, but under this legislation I think other things will happen at a local level. That will give councils and local businesses an opportunity to enter into arrangements enabling use and reuse of water in Sydney Water's infrastructure at the local level.
The more we can encourage that sort of thing, the better off we will be. The more we can tap into the system and beneficially reuse the water and biosolids, the more sustainable we will make Sydney. That is the aim of the game. I strongly support this legislation. I would like to see the Government moving more strongly on recycling, going for higher targets than 75 gigalitres, but this is important legislation and I support it. I think it would have the overwhelming endorsement of the people of Manly.
Mrs JUDY HOPWOOD (Hornsby) [7.55 p.m.]: I take this opportunity to contribute to the debate on the Water Industry Competition Bill 2006 and the cognate Central Coast Water Corporation Bill 2006. The object of the Water Industry Competition Bill is to encourage competition in relation to the supply of water and sewerage services and to facilitate the development of infrastructure for the production and reticulation of recycled water. The aims of the bill are to establish a licensing scheme to provide for private sector involvement in the supply of water and the provision of sewerage services; to establish an access regime to ensure that certain monopoly infrastructure services involved in the supply of water and the provision of sewerage services are available to persons seeking access to them; to facilitate the resolution of disputes between persons operating certain sewerage infrastructure and persons seeking access to the contents of that infrastructure; to facilitate the resolution of disputes between private sector bodies and their customers in relation to the supply of water and the provision of sewerage services; to enact provisions to facilitate the construction, maintenance and operation of infrastructure for the supply of water and the provision of sewerage services; and to protect private sector involvement in the supply of water and the provision of sewerage services by means of the creation of offences for that purpose.
The object of the Central Coast Water Corporation Bill 2006 is to provide for the constitution and functions of the Central Coast Water Corporation and for its establishment as a water supply authority under the Water Management Act 2000. The Water Industry Competition Bill largely results from Services Sydney's legal action against the Government through the National Competition Council and the Australian Competition Tribunal. Former Premier Carr apparently did not accept the outcome of that court case, and the Government sought to introduce its own competitive regime, with appeals to the Independent Pricing and Regulatory Tribunal and not the Australian Competition and Consumer Commission. Some concerns have been raised in discussions about the Central Coast Water Corporation Bill.
It has been obvious for some time that Central Coast dam levels have been dropping. They are currently below 16 per cent capacity. Minister Campbell said in the budget estimates hearing that 18 months of water supply is left. Since 1997 communities from the Central Coast to the Hawkesbury River have been fighting for construction of a sewage treatment plant for Brooklyn and Dangar Island. This is when the project was placed on the priority one list with the Sydney Water Corporation. Unfortunately, recycling facilities are not attached to this construction. That is a matter that, in the light of level four restrictions on the Central Coast and low dam levels, is unexplainable.
According to Charles Essery, it would have cost approximately $3 million in extra expenditure when trenches were being dug for the pipe placement, but the Government did not think that was a very good idea. The outfall, which is currently planned to be built under road bridges, could have been extended further so that the water, a valuable commodity in 2006, and a commodity becoming more scarce on the Central Coast, could have been used for industrial and other suitable purposes, but obviously not for drinking. People in the area with fishing and prawn trawlers have had a number of concerns over the years about putting sewage treatment works into Brooklyn and Dangar Island. Recently I received a letter from Ralph Norington, the Hawkesbury representative for the estuary prawn trawl industry, addressed to Mr Terry Outtrim from the New South Wales Food Authority, which states:
Thank you for meeting with myself, Steven Reed and Glen Tritton from DPI on 15/9/06. Following our discussion I am putting the concerns of the prawn fishers of the Hawkesbury River in writing and hoping the Food Authority can achieve some developments in reassuring the community regarding the effects of the Brooklyn STP plume on the processing of prawns for human consumption.
It seems now apparent that the Food Authority, based on information provided by Sydney Water in the 2004 EIS update, will implement an exclusion zone of 500m radius around the discharge point, being the Pacific Hwy Road Bridge, for the processing of oysters and the cooking and cooling of prawns. We are concerned about the small size of this exclusion zone for these activities for the following reasons:
*Sydney Water has stated that they expect the plume to travel from the discharge point in a narrow elongated manner and interact with the surface layer of the water column. Plume distribution model diagrams from the original 2000 EIS … demonstrate that the plume will extend some kilometres from the discharge point with concentrations of dilution rates at the end of the tidal reach of the plume which can match those at the discharge point. These models, of which three represent the approved proposal, are for a total discharge of 0.33MI/day, the original output predicted in 2004 for Brooklyn and Dangar Island only. The model for the approved discharge point at the end of the flood tide (… Road Bridge location) shows the plume beginning to concentrate near Bar Point before the map ends, failing to demonstrate the extent of the plume in a common prawn trawling/cooking area.
The letter continues:
*There has been no appreciation of the effects of tidal transport in this area of the Hawkesbury River. Unanswered queries have been raised by fishers regarding the effects of spring tides in the extent of the STP plume, for example, in the nearby prawn trawling area of Mooney Mooney Creek, where tidal transport of marine kelp and jellyfish occurs during spring flood tides. Also no information has been prepared on the effects of freshwater flows into the Hawkesbury after rains on the plume distribution and effect.
*Sydney Water have stated that further research is unnecessary, time-consuming and costly, as there are only 8 prawn trawlers that will be affected by this new outfall. There is no understanding of the distribution of fishing effort within the Hawkesbury Trawl Fishery. There are about 45 active prawn trawling operations extending from Broken Bay to Lower Portland, and following a strong rainfall pattern and freshwater influx into the Hawkesbury River most of these vessels could be catching, cooking and cooling prawns in the vicinity of the Brooklyn outfall for a period of time, as the prawns settle down river as a result of freshwater abundance in the upper reaches, before they migrate to sea.
*There has been a decline in community confidence of our product [the prawns] as a result of this new outfall. Whilst we know it is not operating yet, members of the local and wider community have expressed concerns about the process and their intention not to purchase our product as soon as it commences. We firmly believe that the community, along with commercial fishers, need to be informed and given assurances regarding this outfall and the extent of the exclusion zone, to eliminate confusion that currently exists with the safety of seafood consumption in this area on commission of the STP.
*The EIS and detached information relies on an efficiency rate of 100%, with no discussion of measures that would apply in times of human error, prolonged power failure leading to STP malfunction and effluent accumulation and possible resulting higher effluent flows from the outfall. We believe that the precautionary principle that is applied to management at all levels, including the fishing industry and commercial fishing on the Hawkesbury River, has not been applied in this case and a re-assessment with regard to possible STP flow variation and increases in the risk factor regarding seafood consumption must take place.
*Concerns exist about effluent increases in the future with future developments in the Brooklyn/Cowan area, and also in the Mooney Mooney/Cheero Point/Mt White areas to the north, and the resulting need to reassess the exclusion zone and the safety of seafood consumption in the Hawkesbury River. The Fishing industry is concerned about the effect of exclusion zones on the value and future of our activities on the Hawkesbury River, an issue that our managers at DPI are unable to adequately address with the current amount of research.
There are many concerns regarding the commissioning of this new outfall. We request that large scale modelling of the expected sewerage plume over a larger area be completed as soon as possible, taking into account the range of tidal, weather and differing flow conditions that are experienced and their effect on the plume, with direct reference to the safe cooking and cooling of prawns for human consumption. We are also asking the Food Authority to provide us, DPI and the community with a documented guarantee that prawns that have been cooked and cooled outside the exclusion zone will be completely safe for human consumption at all times.
The concerns put forward by Rolf Norington, representing the estuary prawn trawl industry, would not exist if there were no outfall under the bridges and if a recycling facility were attached to the sewage treatment plant at Brooklyn and Dangar Island. As I said, it is beyond belief that the Government does not see this as a golden opportunity to provide water not only for local purposes, such as the oval and other industrial uses, but also for the Central Coast, which is not very far to the north. I call on the Minister to address the need for recycling at the site. Although a lot of the construction is under way, the opportunity still exists.
Mr DAVID CAMPBELL (Keira—Minister for Water Utilities, Minister for Small Business, Minister for Regional Development, and Minister for the Illawarra) [8.06 p.m.], in reply: I thank all honourable members who took part in the debate. Most of the contributions were constructive, certainly on the Water Industry Competition Bill. However, some of the debate on the cognate bill was quite laughable. I will refer to that shortly. I will refer first to the Water Industry Competition Bill. First, unlike the Australian Competition and Consumer Commission, the Independent Pricing and Regulatory Tribunal is in a position to balance the objectives of New South Wales, including competition, public health protection and consumer protection. Second, the access regime and licensing framework extends to all customers, not just large industrial users. Third, the price of access is to be negotiated between the service provider and the access seeker.
If agreement cannot be reached, prices will be determined by the Independent Pricing and Regulatory Tribunal in arbitration in accordance with the pricing principles set out in the bill. To facilitate negotiations on price, the allocation of costs for declared services must be publicly disclosed. Fourth, there is no power for the Minister to withdraw licences on a whim, as suggested by the Opposition. Licences will be issued in perpetuity to provide certainty of investment. Maximum penalties for breach of licence conditions will not be imposed for trivial breaches. I stress that this is an important day for the reform of the metropolitan water industry, and the security of the community's water suppliers. The bill will facilitate competition in the metropolitan water industry and encourage recycling for the benefit of consumers, the economy and the environment. Private sector competition promises to bring dynamism to the metropolitan water industry, and with it innovation, new investment and technological advances in water management.
The bill gives private operators who want to establish a water recycling business an enforceable right to acquire the raw material they need from Sydney Water's sewerage network. The new State access regime draws upon the significant water industry regulatory experience of the Independent Pricing and Regulatory Tribunal [IPART]. Unlike the Federal regime, the State system will streamline economic regulation for the water industry under the control of an independent regulator while at the same time promoting competition and providing incentives to reduce costs and improve productivity.
It is of fundamental importance that the Water Industry Competition Bill ensures the continued protection of public health, the environment and consumers through the licensing framework. The bill does not privatise existing public water utilities, nor does it change their pricing arrangements. Private operators will be regulated by IPART, just as State-owned monopolies currently are. Publicly owned utilities will act as suppliers of last resort to protect people in the event of problems arising with suppliers. I remind honourable members that the decision of the Australian Competition Tribunal does not include the comprehensive protections of public health, environment and consumers that this bill contains.
The establishment of a comprehensive regime for licensing ensures that appropriate conditions will be able to be imposed and enforced. The conditions will ensure, for example, compliance with water quality guidelines. Sydney Water and Hunter Water will continue to have their prices independently regulated by the Independent Pricing and Regulatory Tribunal [IPART]. Customers in those areas will still be able to obtain essential services from Sydney Water and Hunter Water. The reforms proposed by the Water Industry Competition Bill have been subject to extensive community consultation. They strike the right balance between facilitating competition and promoting recycling issues, and the protection of the environment and consumers. I am proud to speak in favour of this bill, which will ensure the continuing protection of the community and, as a component, will assist in securing Sydney's long-term water resources future.
Most of the issues mentioned by the Leader of The Nationals and the Deputy Leader of the Opposition have been addressed during my reply. However, I make the observation that the Deputy Leader of the Opposition seemed to want to visit consequences similar to WorkChoices upon consumer protections in New South Wales. He seemed to advocate that New South Wales should transfer all consumer protection issues to the Australian Competition and Consumer Commission [ACCC]. Judging from the experiences people have had with WorkChoices, I do not think his suggestion will sit very well with many people if the end result is similar experiences. In any event, that is the interpretation I placed on what he had to say. The honourable member for Pittwater said that he would encourage the Pittwater Council to utilise the provisions of this bill. I look forward to the honourable member providing that encouragement and to the Pittwater Council showing leadership in the local government sector in taking up the opportunities presented by this bill.
The Leader of The Nationals referred to recycling and said that there is no recycling taking place in this State. In response, I will list some projects that have been introduced as a result of the Government's determined and hard-won policy development during the short period in which I have been the Minister for Water Utilities. The Premier has turned the switch for the largest industrial recycling project in Australia in conjunction with BlueScope Steel at Port Kembla. This means that the equivalent of the fresh water use of 30,000 households now remains in Avon Dam because recycled effluent is being used for industrial purposes. The Government announced a project for recycled water use at Vales Point Power Station and the project will go to tender for construction. As recently as yesterday the Premier announced the Government's intention to make a $28 million investment in recycling at Kooragang Island in Newcastle—yet another industrial recycling project.
In conjunction with the Sutherland Shire Council, the Government announced a recycling initiative that is supported by the Water Savings Fund. Similarly, the Government has supported the Manly Council taking treated effluent from North Head. The Government is also using funds from the Water Savings Fund to work with Caltex and other industrial users at Kurnell. Expressions of interest have been called for in relation to an industrial recycling project at Camellia. That extremely large Western Sydney recycling project has been submitted to public consultation on environmental factors. I encourage people to examine documentation for the project and the consultation process. That project builds on the largest residential recycling project in Australia at Rouse Hill. The Government recently let a tender for the $50 million expansion of the project, which in turn builds on the introduction of dual-use recycled water at Sydney Olympic Park.
Without any doubt whatsoever, the Leader of The Nationals, who is of course missing in action, has failed to notice all of those recycling announcements in recent months. I was surprised that the Leader of The Nationals did not take the opportunity during this debate to endorse the construction of a new dam that will secure water resources for the Hunter and the Central Coast. I can only presume from his resisting the opportunity to express a view that the Opposition opposes the $340 million plus commitment that was made yesterday by the Premier, $300 million of which relates to the construction of a new dam. I make those comments broadly in response to issues raised with respect to the Water Industry Competition Bill.
In relation to the Central Coast Water Corporation Bill, I express my appreciation for the support for the Government's attempts to achieve improvements expressed by the honourable member for Peats, the Minister for Gaming and Racing, and Minister for the Central Coast and honourable member for The Entrance and the honourable member for Wyong who pointed out very constructively the difficulties that exist on the Central Coast. The Minister for Gaming and Racing, and Minister for the Central Coast also pointed out that the honourable member for Gosford has been relatively silent during this debate. I point out that this bill was introduced at the request of both the Gosford City Council and the Wyong Shire Council and that, in part, the purpose of this bill is an attempt to fix the dysfunctional decision making that is occurring on the Central Coast.
I thought debate had turned to comedy when I heard the honourable member for Gosford's contribution to this debate. I really thought that we had switched to Vaudeville. The honourable member for Gosford had the gall to say that there had been no announcement by the State Government of its intention to support the Central Coast during its water resource crisis. His statement shows that he probably spends too much time in Sydney and not enough time on the Central Coast. If he spent more time on the Central Coast, first and foremost he would know that the community is screaming out for a change in administration of water resources in the region. Barely a week passes in which I do not receive correspondence from someone on the Central Coast who wants something to be done about it. Both councils want to do something about it. This Government is providing those councils with the opportunity to address the issue by providing a legislative framework for decisions that will be related to future progress.
When the Opposition attempts to suggest that the Government has provided no support for a water resources utilisation model on the Central Coast it shows that the Opposition simply has no plan. It is hard to think of a more barefaced idiotic statement than that the State Government has made no announcements in support of the Central Coast during its water crisis. With the support of the New South Wales Government, some financial support from the Commonwealth Government and investment from the Gosford City Council and the Wyong Shire Council, a pipeline is being constructed from the Hunter to the Central Coast. That should be completed towards the end of this year and it will provide 27 million litres of water a day that will be transferred from the Williams River in the Hunter River system to the Central Coast. As recently as yesterday the Premier announced as part of the package that the pipeline's capacity would be increased to 35 million litres of water a day and that construction would probably be completed towards the end of the next calendar year. That project alone makes it beyond belief that the honourable member for Gosford would say that nothing is being done by the State Government.
As I mentioned earlier, the State Government, through Delta Energy, has announced that it will invest in water recycling at the Vales Point Power Station. The last time I checked, and certainly when I visited the site to make an announcement, that power station was situated on the Central Coast. It represents another investment by this Government in securing water resources for the Central Coast. The Tillegra Dam announcement yesterday builds on the pipe and grid network to provide positive benefits for the Central Coast. There is an immediate term, a medium term and a long-term strategy that the Government has put in place. Most of that strategy has been implemented with the support of, and through negotiation with, the Gosford City Council and the Wyong Shire Council on the Central Coast. The only people who do not understand what is going on are members of the Liberal Party.
Furthermore, I personally negotiated with the mayors of both the Gosford City Council and the Wyong Shire Council to encourage them to come on board with the Water Savings Fund. Round one of applications for Water Savings Fund support on the Central Coast has closed and the applications are being assessed. That is yet another example of the New South Wales Government doing something about water resources on the Central Coast. But during the debate, as honourable members would expect, the main hang up of the honourable member for Gosford was with industrial relations. He is obsessed with WorkChoices. His contribution merely served to demonstrate yet again that the New South Wales Opposition will not stand up for workers in New South Wales. The Opposition will cede all responsibility, any accountability and any protection of workers in New South Wales to the Commonwealth Government, if, by some mischance, it wins government in this State. I doubt that the Coalition will be in office, because people know it refuses to stand up to Canberra on these issues.
The Government opposes the amendments, and I will address them in detail at the Committee stage. These cognate bills are a result of a great deal of discussion and negotiation. The Central Coast Water Corporation Bill certainly has the strong endorsement of Gosford council. It was agreed to at a joint meeting of both councils. Wyong Shire Council subsequently reneged on the agreement, and that is an example of the absolutely dysfunctional decision making on water on the Central Coast. It is also a demonstration of why the Opposition should look around the Central Coast, wake up to itself and support the bill. I commend both bills to the House.
Motion agreed to.
Bills read a second time.
In Committee
The TEMPORARY CHAIRMAN (Ms Marie Andrews): Order! The Committee will deal first with the Water Industry Competition Bill.
Clauses 1 to 104 agreed to.
Schedules 1 to 4 agreed to.
The TEMPORARY CHAIRMAN (Ms Marie Andrews): Order! The Committee will now deal with the Central Coast Water Corporation Bill.
Clause 1 agreed to.
Mr CHRIS HARTCHER (Gosford) [8.23 p.m.], by leave: I move amendments Nos 1 and 3 in globo:
No. 1 Pages 2 and 3, clause 2, line 26 on page 2 to line 6 on page 3. Omit all words on those lines.
No. 3 Pages 63 and 64, schedule 7, line 25 on page 63 to line 4 on page 64. Omit all words on those lines.
The removal of subclauses (5), (6), (7) and (8) of clause 2 and the relevant parts of schedule 7 will ensure that the two councils, Gosford and Wyong, retain their water authority status after 12 months. The Minister never addressed that issue, but it is, as always, cleverly concealed in the fine print. Subclauses (6), (7) and (8) of clause 2 state:
(6) The day appointed by the proclamation establishing the Corporation as a water supply authority may be a day occurring any time before, or within 12 month after, the first anniversary of the commencement of section 4.
(7) The proclamation establishing the Corporation as a water supply authority may not be made except on the Minister's recommendation.
(8) The Minister's recommendation for the proclamation establishing the Corporation as a water supply authority may not be given unless each of the constituent councils has, pursuant to a resolution of the council, requested the making of the recommendation.
Those subclauses intend to ensure that the councils are stripped of their authority to make decisions for the benefit of the residents of the Central Coast. The residents would not mind if the councils were taken out of the picture so long as they had some assurance that the State Government would accept responsibility. However, the Minister is cleverly seeking to have it both ways. He does not accept that the Government has responsibility for the Central Coast. He simply says, "Here is the new water authority. But after 12 months"—after the State election, that crucial test for every Labor Minister these days—"I can, by simple proclamation, take action to strip the two councils of their authority, to take them out of the picture. But I do not have to accept any responsibility".
This is a disguise under which the Minister seizes control, but he does it very cleverly after 24 March 2007. Oh, what a date 24 March 2007 will be in the annals of New South Wales! Once that date is passed, so many things will happen. Under clause 2 of the bill the Minister will have the power of proclamation. Schedule 7.2 [4] amends schedule 3 of the Water Management Act to include the Central Coast Water Corporation as a water supply authority and schedule 7.2 [2] removes the councils as water supply authorities. Legal advice obtained by the council states:
2. The practical effect of the amendments is to denude the councils of the power to raise funds for water and sewerage services. They will lose the power to levy service charges and impose fees and other charges (s.310) and the power to recover the cost of existing works or to claim the cost of proposed works as a condition of granting a Certificate of Compliance for development (s.306) under the Water Act. Once the councils' water distribution infrastructure is transferred to the Corporation, they will lose the power under the Local Government Act … to impose special rates and charges for water supply, as the condition for doing so is that land is supplied with water from a water pipe of the Council (s.552(1)(a)). Contributions cannot be exacted under s.94 of the Environmental Planning and Assessment Act 1979 … for public amenities or services comprising water supply or sewerage works …
3. Accordingly, the effect of the Councils ceasing to be water supply authorities will be to prevent them from raising money, whether by levies or contributions, for water and sewerage services, and to restrict the power to raise money for drainage purposes. The extent to which it is able to impose a rate or charge for water, sewerage or drainage will depend, in the case of water and sewerage, upon the extent to which Council retains its infrastructure and the proximity of the infrastructure to the land upon which the rate or charge is levied. Once their infrastructure is transferred to the Water Corporation, the Councils will only have a power to impose a drainage charge or rate on land which is already served by drainage works: s.552(4) or where drainage services are actually provided to the land by Council: s.551, LG Act. It does not appear that the Local Government Act authorises the extension of a drainage rate or charge to land which does not already benefit from Council's drainage works.
4. These are severe limitations. Even if the Councils were only to transfer the headworks for water and sewerage to the Water Corporation, and retain other infrastructure, the Councils would be restricted to raising funds by a special rate or charge for water supply or sewerage services which are actually provided to or in the vicinity of the land levied by the rate or charge; s.552, LG Act. This suggests that any proposal to sever the system of water supply and sewerage reticulation is likely to fail without debt financing because it is unlikely that rates could fund new investment in water and sewerage infrastructure, at the same time as meeting the maintenance and repair costs of its retained infrastructure. For this reason, the proposal to divide the water supply and sewerage systems may be impractical. At best, it would increase council's debt. At worst, new projects will need to be funded from general revenue because the user pays system for development contributions and infrastructure payments will not.
There is a massive sting in the tail of this legislation. Clause 2 does not come into force for 12 months after the legislation is enacted, and then it is dependent upon the Minister's proclamation. It gets the Government beyond 24 March 2007 and enables the Minister, at the stroke of a pen, 12 months after the legislation comes into force to effectively strip the councils of their powers and leave them with their responsibilities. Councils will still have to develop water supply and sewerage services but they will be denied the funding to do so. As the legal advice states, at best it would increase councils' debt; at worst new projects will need to be funded from general revenue. That will cost every ratepayer on the Central Coast money; it will cost the ratepayers of the Central Coast a fortune. The honourable member for Peats, the Minister for the Central Coast and the soon-to-depart honourable member for Wyong did not seek to address this matter in their contributions to the second reading debate. I assume that they simply were not aware of the implications of the bill.
The provisions are all tucked away and one has to go through all the clauses and schedule 7 to find them. I am indebted to Wyong Shire Council and to its excellent mayor, Bob Graham, for supplying me with information and with senior counsel's advice. I am not asking the Committee simply to rely on my analysis of the bill; it is backed up by eminent counsel's advice. The Government, by adopting the attitude that it will not accept these amendments, is simply saying, "That is what the legislation is designed to do. The legislation is designed to have a peaceful period of 12 months when we can settle it all down, calm everybody down and ensure that everybody loses interest." Then, as senior counsel said, without any notice or warning the Minister can take action to denude councils of the power to raise funds for water and sewerage services.
I hope that those honourable members who represent Central Coast electorates are conscious of this provision. Let it be on their heads if they are prepared to vote with the Minister on this legislation. Effectively, they will be voting for increased rates in Gosford city and Wyong shire because that is the only way those two councils will be able to fund these works. The Australian Labor Party has run water advertisements on Central Coast radio. The so-called Kincumber branch of the Australian Labor Party financed those advertisements and head office distributed material, which is well known to the honourable member for Peats, in the Gosford electorate that seeks to attack Chris Holstein, the candidate standing against her, over the water issue. It has run similar attacks against Brenton Pavier in Wyong. Chris Holstein and Brenton Pavier are councillors on Wyong and Gosford councils.
The Australian Labor Party has done zilch and the Minister, in his second reading speech, was unable to state why the Government has no plan. The Australian Labor Party, by subterfuge, is now stripping councils of their authority and power. It will force the two councils into a situation in which they either go into debt or are required to increase their rates. I will not have a bar of it and I will not support this legislation. I challenge all members representing Central Coast electorates to join me in opposing this legislation. If they are not prepared to oppose it, the sorts of things they are saying about Chris Holstein and Brenton Pavier will be said about them in the difficult election they face in March 2007. They will be accused of being complicit in and compliant with what the Minister is trying to do, which is, effectively, to strip two councils of their authority after a period of 12 months and to let the bill fall on Central Coast ratepayers. That might be the Labor Party's plan, but it is not endorsed or supported by the New South Wales Coalition.
Mr DAVID CAMPBELL (Keira—Minister for Water Utilities, Minister for Small Business, Minister for Regional Development, and Minister for the Illawarra) [8.33 p.m.]: As I indicated earlier, the Government opposes these amendments for very good reasons. Clearly, the honourable member for Gosford misunderstands how these provisions will work. After 12 months the corporation will become the water supply authority unless the councils request an earlier or later date. That later date may be no more than two years after the establishment of the corporation. The Minister cannot change the date without a request from the councils. The reason for allowing one to two years is to provide for a smooth, sensible and orderly transition of functions.
The bill will certainly change the way in which services are delivered but it will not cost ratepayers money and it will not prevent councils from obtaining funds. I am sure the honourable member for Peats is aware, as she has followed this debate, that councils have obtained independent expert advise that the proposed model will save them a significant sum of money. The honourable member for Gosford misinterpreted, misunderstood or misrepresented—or perhaps all three—those aspects of the bill. The Government opposes the amendments.
Mr CHRIS HARTCHER (Gosford) [8.34 p.m.]: The Minister referred to councils requesting an earlier or later date. The provisions to which the Minister referred relating to a period of two years or longer are simply not in the bill. If the Minister looks at clause 2 and schedule 7 he will see that those provisions are not in the bill. I ask the Minister to draw my attention to any provisions that refer to two years or a longer period. The detailed analysis of the bill to which I referred earlier was not provided by me; senior counsel provided that analysis. When I read out the relevant paragraphs the Minister did not dispute that the provisions of the Water Act or the Local Government Act will impact on the Government's decision to change the corporation into a water supply authority. Where are the provisions to which the Minister referred? If the Minister knows where they are, in either clause 2 or schedule 7, which are fairly short, he should inform me. The Minister said that this proposal will not cost ratepayers on the Central Coast anything. However, senior counsel said it will cost ratepayers on the Central Coast—and it has the potential to cost them quite substantially.
Question—That the amendments be agreed to—put.
The Committee divided.
Ayes, 32
Mr Aplin
Mr Barr
Ms Berejiklian
Mr Cansdell
Mr Constance
Mr Draper
Mrs Hancock
Mr Hartcher
Mr Hazzard
Mrs Hopwood
Mr Humpherson | Mr Kerr
Mr McTaggart
Mr Merton
Ms Moore
Mr Oakeshott
Mr O'Farrell
Mr Page
Mr Piccoli
Mr Pringle
Mr Richardson
Mr Roberts | Ms Seaton
Mrs Skinner
Mr Slack-Smith
Mr Souris
Mr Stoner
Mr Tink
Mr Torbay
Mr J. H. Turner
Tellers,
Mr Maguire
Mr R. W. Turner |
Noes, 43
Ms Allan
Mr Amery
Ms Andrews
Ms Beamer
Mr Black
Mr Brown
Ms Burney
Mr Campbell
Mr Chaytor
Mr Collier
Mr Corrigan
Mr Crittenden
Mr Debus
Ms Gadiel
Mr Gaudry | Mr Gibson
Mr Greene
Mr Hickey
Mr Hunter
Ms Keneally
Mr Lynch
Mr McBride
Mr McLeay
Ms Meagher
Ms Megarrity
Mr Morris
Mr Newell
Ms Nori
Mrs Paluzzano
Mr Pearce | Mr Price
Ms Saliba
Mr Sartor
Mr Shearan
Mr Stewart
Ms Tebbutt
Mr Tripodi
Mr Watkins
Mr West
Mr Whan
Mr Yeadon
Tellers,
Mr Ashton
Mr Martin |
Question resolved in the negative.
Amendments negatived.
Clause 2 agreed to.
Clauses 3 to 31 agreed to.
Mr CHRIS HARTCHER (Gosford) [8.44 p.m.], by leave: I move Opposition amendments Nos 2 and 4 in globo:
No. 2 Pages 21 and 22, clause 32, line 30 on page 21 to line 7 on page 22. Omit all words on those lines. Insert instead:
(1) A constituent council may, by order in writing, transfer to the Corporation such of its staff, assets, rights and liabilities as are specified or referred to in the order.
No. 4 Page 64, schedule 7, lines 8 to 11. Omit all words on those lines.
Opposition amendments Nos 2 and 4 relate to council staff. Councils' control over both assets and staff will be effectively transferred to the Minister and will be lost to the councils. That will have the effect of denying staff the protection that the Minister said in his second reading speech he would afford to them. I refer once again to the legal opinion obtained by Wyong Shire Council. Senior Counsel's advice states:
Currently, Council employees are bound by at least two State awards … If on 27 March 2006 (when the work choice amendments commenced), the terms and conditions of employees were determined in whole or in part under a State award or State industrial law, a notional agreement preserving State awards came into operation …
That occurred under schedule 8 of the Workplace Relations Act. The advice continues:
The notional agreement, or NAPSA as it is known, took effect under Federal law. The NAPSA binds both employees and employers … If the NAPSA conferred a function or power on a State industrial authority, neither must be performed or exercised by that authority, although the parties to the NAPSA may agree to confer the function or power on the Australian Industrial Relations Commission … The NAPSA contains a term requiring disputes to be settled in accordance with the model dispute resolution process set out in the Act.
That is schedule 8. Senior Counsel's advice continues:
That process may involve the parties agreeing to appoint a person to conduct private conciliation and arbitration … The NAPSA has effect according to its terms and despite the State awards on which it is based and the IR Act … None of the terms of employment included in the NAPSA are enforceable under the law of NSW … In effect, it governs the employment relationship between persons who were previously parties to State awards—
as is the case here—
but does so as a Federal instrument which cannot be controlled by State law.
I emphasise that point. The Minister is trying to hoodwink employees into believing they will be protected under section 146A of the Industrial Relations Act when that cannot be achieved. As we are aware, the High Court has upheld the Workplace Relations Act, the Federal instrument has come into force as the awards are now notional awards and, under Federal legislation—that is, schedule 8—the State cannot change that system. Accordingly, the Minister's promise is simply meaningless. The advice continues:
NAPSAs persist for three years after 27 March 2006 unless a workplace agreement or an award has been made under the WR Act.
The only agreement that can be made and the only award that can come into force to protect the conditions of employees of the Joint Water Authority or the two councils must be made under the Workplace Relations Act. The Minister's claim that employees will be protected under section 146A of the Industrial Relations Act is disingenuous. That is the effect of the Workplace Relations Act and of the High Court's validation of that Act today. It means that the Minister's promise to the employees of Gosford and Wyong councils that their rights will be protected when they are transferred to the authority is hollow because section 146A of the Industrial Relations Act, upon which he is relying, no longer has effect. The Minister must have known that when he made the promise to the employees and when he introduced the bill.
The Minister could only have been relying on the High Court invalidating the Federal legislation, but it has not. The Minister's promise to employees that they would be protected is meaningless and cannot be delivered because they are now subject to Federal legislation. Did the Minister know he was making a hollow promise? Even if section 146A were valid, application to confer an arbitrary power by agreement of the parties on the State Commission is inconsistent with the terms of the State awards, which continue as Federal instruments under schedule 8 to the Act. Any agreement by councils to transfer staff will be subject to section 146A and will be equally ineffective if NAPSA binds the Water Corporation.
Put simply, the union was concerned about the establishment of the Central Coast Water Corporation and made representations to the Government. As a result of those representations, the Government pledged to the union that, once transferred to the Water Corporation, employees would be safe. They are safe while they are council employees but the Minister has now given himself the power to transfer them by the stroke of a pen to the corporation and has told them that they will be protected under the Industrial Relations Act even though the Workplace Relations Act overrides that once they are employed by a corporation, as corporations are caught by the Workplace Relations Act. Accordingly, the workers are not protected and it is important that the Minister's hollow promise be demonstrated.
Schedule 9 to the Workplace Relations Act deals with the transmission of business rules for transitional instruments such as NAPSA. These rules are applicable to the Water Corporation if, as claimed, the councils transfer to the Water Corporation staff who will have operated their water, sewerage and drainage services. Clause 32 (1) of the bill authorises the transfer of staff, in which case schedule 5 applies. Schedule 5.4 provides that transferred staff are to be regarded for all purposes as having become employees of the Water Corporation on the day the transfer takes effect. Therefore, as soon as they are transferred they are subject to the Federal legislation and the Workplace Relations Act and have no protection under State law. Yet the Minister solemnly promised the union, and said in this Parliament, that they would be protected. The Minister is disingenuous at best and his advisers are ignorant at worst. The advice of Tim Robertson, SC, states:
If the Water Corporation is established soon, the transferred staff would, in their employment with Council, have been subject to NAPSA as Council is a constitutional corporation …Under Sch. 9, the rules relating to State transitional instruments apply to NAPSAs: …"State transitional instrument".
Where staff of Council are bound by a NAPSA immediately before their transfer, the rules provide that the Water Corporation will be bound by that NAPSA (Sch. 9.19), for the same period as the parties would have been bound had the employees not been transferred.
The relevant cases decided by the High Court in 2000 and 2005 are cited. He continues:
There is no doubt that under those rules the Water Corporation is a successor to the business conducted by the Councils of water supply, sewerage and drainage. Hence upon the transfer of staff to the Water Corporation, both the Water Corporation and its employees will be bound by the NAPSA which had previously applied to the employees when employed by the Councils, but by dint of the transitional transmission of business rules under the WR Act.
Any provision of a State law—
That is now section 146A of the Industrial Relations Act, about which the Minister spoke—
inconsistent with the terms of the NAPSA, or the provisions of the WR Act will be invalid.
Hence, there will be no protection to the workers under State law—a hollow promise by this Minister and the delusion of the United Services Union, which made the representations. Accordingly, I invite the Minister to rebut the argument of Senior Counsel as to the effect of what he is proposing and to justify his pledge to the union and his undertaking to this House.
Mr DAVID CAMPBELL (Keira—Minister for Water Utilities, Minister for Small Business, Minister for Regional Development, and Minister for the Illawarra) [8.54 p.m.]: I oppose the amendments. They make no change to the way in which the bill deals with the employment of staff by councils or the corporation. The amendments once again give the honourable member for Gosford the opportunity to engage his manic passion to get stuck into employees, to support WorkChoices, and to demonstrate yet again what will confront all workers in New South Wales should he become the Minister for Industrial Relations in a Coalition government, which I do not think will happen. The honourable member has a manic passion to sign up to the WorkChoices regime as opposed to trying to work logically to protect workers in New South Wales.
Mr CHRIS HARTCHER (Gosford) [8.55 p.m.]: The Minister did not answer the arguments about the effect of the Workplace Relations Act, about how his promise to the union would be unable to be fulfilled, or how section 146A of the Industrial Relations Act, which he relied upon, is now invalid as a result of the High Court upholding the Workplace Relations Act. The bill has nothing to do with whether the WorkChoices legislation is good or bad, but it is relevant to the genuineness of the Minister's undertaking to employees. If the Minister can look after the employees as he promised the union and the community of the Central Coast, he will not transfer them to the Water Corporation; he will leave them where they are.
The Minister is insistent on having the power to transfer them to the Water Corporation but says that they need not worry as they will still be protected under section 146A of the Industrial Relations Act, a section which has now been invalidated by today's decision of the High Court, which he and everyone else knew would be the most likely outcome. The Opposition is not arguing one way or the other about the WorkChoices legislation; it is arguing about the integrity of the promise the Minister gave to the 300 employees of Gosford Council and Wyong Council who will now be transferred as employees of the Water Corporation and will no longer have the protection he promised them.
I am talking about the integrity of this Government and the promises it makes. The Minister did not answer any of my arguments in relation to the Workplace Relations Act; he merely asserted that I was manic. His advisers know and could have given him advice, but he did not ask for that advice. He just wants to rely on the Government's numbers to defeat the proposals. However, the people of the Central Coast like the people who work for them on Gosford and Wyong councils and want them protected. The Minister promised to protect them, and that promise has now been seen to be hollow.
Amendments negatived.
Clause 32 agreed to.
Clauses 33 to 63 agreed to.
Schedules 1 to 6 agreed to.
Schedule 7 agreed to.
Schedule 8 agreed to.
Bills reported from Committee without amendment and passed through remaining stages.