Mount Lofty Ranges Water Allocation Plan

The Hon. D.W. RIDGWAY (Leader of the Opposition) ( 14:33 :49 ): I seek leave to make a brief explanation before asking the Minister for Sustainability, Environment and Conservation a question about the Mount Lofty water allocation plan licences for the Adelaide and Mount Lofty Ranges.

Leave granted.

The Hon. D.W. RIDGWAY: I am advised that in late 2013 the respective NRM board consulted with the industry on imposing a levy on the water licences which were soon to be issued. My understanding is that this would be in addition to the NRM levy. The amount suggested was in the order of $7 per megalitre. I have received some advice from the industry about a range of concerns it has. One of the arguments that was made for the levy at the time of the consultation was that it would create equity across the regions. I am informed that the Eastern Mount Lofty Ranges pay less than $6, the River Murray about $5 and the South-East or Limestone Coast considerably less.

Industry has informed me that about $200,000 of the expected money to be collected from this $7 per megalitre will be returned to an industry fund, but the industry would rather keep the money in the first place than have it paid into another fund. It is certainly not interested in such a fund being expended on anything other than the water allocation plan management. I am told that transparency is lacking in how the board intends to expend the fund. Of course, we have to understand that this is a water allocation imposed on landowners who have provided all the infrastructure on their own properties to access this water.

Most importantly, I am told that prior to the board recently announcing the levy to industry an investigation was undertaken that included economic modelling and demonstrated that this industry cannot sustain such a levy due to diminishing returns and greater costs. I am told the industry cannot afford to pass on this cost to consumers, and the levy potentially will be indexed to CPI, despite the fact that, as we all know, farm gate prices are not.

I have been made aware of one landowner who has a 450 megalitre licence and is now expecting that the $7 levy will be an $3,000 extra impost on top of his farming operation, on top of his NRM levy which has increased, and of course on top of the government's outrageous emergency services levy increases. My questions to the minister are:

1.Will the minister confirm the details of this levy and the proposal that the surplus will go to an industry fund?

2. Is the minister aware of any economic modelling and research which demonstrated that the industry cannot be sustained under such a levy?

3.Is the minister aware that the levy is not equitable across other regions?

4.Has the minister considered a reduction on other land-based levies so that there is less or no impact on the hip pockets of growers?

5.Will the minister confirm that this new charge of $7 per megalitre will be indexed with CPI?

6.Will the minister confirm now that the government is taxing the rain that falls from the skies over our farmers' properties?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) ( 14:36 :40 ): I thank the honourable member for his slightly dodgy question and I will endeavour to give him some information that will set him straight in these matters. Eight regional and natural resource management boards contribute to the management of South Australia's natural resources. The Natural Resources Management Act 2004 enables the NRM boards to be funded through water-based natural resources management levies. Holders of a water licence, imported water permits or persons who are authorised to take water under the NRM Act are liable to pay an NRM water levy.

An NRM water levy is collected by the Department of Environment, Water and Natural Resources on behalf of the boards. Six of the eight NRM boards collect water-based levies. The AWNRM Board and the Kangaroo Island NRM Board do not have any prescribed water resource areas, I am advised, and therefore do not collect water levies. The NRM Act provides a number of options for collecting NRM water levies, including a fixed charge or rate on the quantity of water allocated, or the quantity of water that has been taken, or the quantity of water used, or a combination of these options. A board can also set differential levies.

The NRM Act provides that a levy cannot be imposed under this section with respect to the taking of water for stock and/or domestic purposes. The water levies for 2014-15 were gazetted on 29 May 2014. I am advised that for the first time a water levy will be applying to holders of forest water licences in the Lower Limestone Coast prescribed wells area, something honourable members here will be well aware of, having debated it in the not too distant past.

The levy of $2.67 per megalitre is consistent for that area with the volumetric rate that applies to water allocations for irrigation in the Lower Limestone Coast. The forest water levy will help fund South-East NRM Board programs and activities that assist in the sustainable management of the water resources in the region for the benefit of all water users.

In terms of the Adelaide and Mount Lofty Ranges prescribed resources, I understand that the rates are set at $5 per megalitre of water allocated and $5 per megalitre of water used for the Barossa Prescribed Water Resources Area, the McLaren Vale Prescribed Wells Area and the Northern Adelaide Plains Prescribed Wells Area. The Western Mount Lofty Ranges Prescribed Water Resources Area has a fixed charge, I understand.

I spoke about the arid lands and Eyre Peninsula, Musgrave and Southern Basins prescribed well areas, and I understand the charge there is $40.40 per megalitre of water allocated for the purposes of providing a reticulated water supply, and $24.90 per megalitre of water allocated for purposes other than providing a reticulated water supply. For the Northern and Yorke and Clare Valley prescribed water resources area it is $16.90 per megalitre of water allocated. For the Angus and Bremer prescribed wells area it is $5.53 per megalitre of water allocated, and so on. All of this information (and it is quite extensive) is available through the NRM boards' websites.

The government does not, will not and has no intention of taxing rainfall. I do not know how many times we have to say that in this place. This is how irresponsible comments in the media get out to people and cause great concern. It is wrong, it is false, it is not true. In a prescribed water resources area, a water licence is generally only required for irrigation for industrial or commercial purposes. Where a water licence is required, a once-off licence application fee is required. In addition to this, a natural resources management board has the option, as I said earlier, to introduce a management levy in prescribed water resource areas for water taken for irrigation and commercial purposes.

A tax is a money amount collected for the government's general revenue whereas a levy, as we all know, is for the specific purpose outlined in the act. Water levies collected are used to help manage local natural resources in the region. The Natural Resources Management Act 2004 specifically disallows the raising of a levy on water taken for stock and domestic purposes, regardless of whether that water comes from roof run-off, a dam or a bore. Without boring the house any further with all the details about this, as I say, all of this information is available for the honourable member on a website. He can go and look it up himself instead of making up facts.

The Hon. D.W. RIDGWAY (Leader of the Opposition) ( 14:41 :02 ): Supplementary: is the minister aware of any economic modelling or research which has been done to demonstrate that the industry could not afford this levy?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) ( 14:41 :16 ): I cannot recollect seeing any such research.

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