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Legislative Assembly for the ACT: 2003 Week 12 Hansard (18 November) . . Page.. 4271 ..

MS DUNDAS (continuing):

The ICRC has recently provided a comprehensive report on the water abstraction charge, detailing options for determining the level of the charge. These take into account the scarcity value of water and generally favour an increase in the charge. While I think the assumptions behind determining the value are restrictive, this is certainly a step in the right direction.

The bill before us makes the determination of prices by the ICRC slightly more transparent, with the government fees being clearer and open. I note that the determination of a fee to be passed on in full to consumers is a disallowable instrument, meaning the Assembly has the authority to scrutinise and overturn a decision if it is inappropriate. I think that is an important part of the bill before us today.

MS TUCKER (8.45): I understand that this amendment bill is a response to difficulties in the current legislation that make it complicated for the government to pass on the water abstraction charge as part of the provision of water services directly to consumers. I understand that the Independent Competition and Regulatory Commission has recommended that the water abstraction charge be increased to recover direct and indirect costs associated with water management, to send a price signal to consumers about efficiency and scarcity of water, and that the commission is supportive of this legislative change to enable the government to pass on to consumers directly charges such as the water abstraction charge.

On the issue of water pricing, I would like to echo some of the concerns of the conservation council and ACTCOSS in their joint position paper on saving our water resources. I quote from the paper:

Only in conjunction with a substantial and significant demand management program should we as a community look at increasing the price of water as a means to reduce demand. ACTCOSS and CCSERAC accept that some price increase at the high usage end may be justified on demand management grounds. However, increased water charges alone are unlikely to be effective and run the risk if they are across the board of causing hardship to low income earners or others affected by poverty. Initiatives to reduce water use, including via appropriate price structures for water are essential to achieve reductions in the ACT's water consumption. The key is determining the right mix so that environmental outcomes are achieved in a socially equitable manner.

I would like to see that, instead of revenue from the water abstraction charge going into general revenue, it is used to encourage, at the household level, uptake of water efficiency devices. An example of such a program is the water wise program in Queanbeyan, which covered the cost of water and energy audits and paid for new toilets and showerheads in households. This sort of program could be used to encourage water saving in low-income or large-family households.

I understand that this bill is a procedural move to ensure the government can easily change the water abstraction charge, with less red tape. However, I do have some concerns that the bill also takes a step to remove the scrutiny of the ICRC in passing on prices directly to consumers. I am concerned that this opens up the scope for a government to introduce charges without any influence from the commission. I am

slightly reassured that the minister's declaration is a disallowable instrument, not

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