Page 3880 - Week 12 - Thursday, 29 October 2015

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Pricing of regulated water and sewerage services: Review of the regulatory framework (The Grant Review)—Final report—Government response.

I ask leave to make a somewhat longer statement in relation to the paper.

Leave granted.

MR BARR: I present to the Assembly the government response to the final report Pricing of regulated water and sewerage services: review of the regulatory framework, otherwise known as the Grant review. This has been developed following government consideration of the Grant review’s final report which was publicly released in June this year.

The tabling statement also incorporates the provision to the Assembly, as agreed by the government in its response to the Standing Committee on Public Accounts report No 7, Review of the Auditor-General’s report (No 2) of 2014: water and sewerage pricing process. This is an update on the progress made by the government to improve the water and sewerage pricing framework in the territory.

The government commissioned Mr Peter Grant PSM to undertake a review of the water and sewerage pricing framework in order to action its commitment made as part of our formal response to the Auditor-General’s water and sewerage pricing process report (No 2) of 2014. The Grant review contains four recommendations to the government which reflect Mr Grant’s broad consideration of the overall regulatory framework, governance and accountability arrangements, the legislative framework and resourcing arrangements for the Independent Competition and Regulatory Commission.

The government response represents the government’s considerations of the findings of the Grant review and outlines its preferred way forward for implementing improvements to the regulatory framework for the provision of regulated pricing services in the territory. In considering the ongoing appropriateness of the current independent commission-led regulatory model, the government recognises that the co-regulatory approach has served the territory well since 1997.

However since the introduction of the current regulatory approach in 1997 the regulatory environment for water and sewerage, electricity and gas prices in the ACT has undergone significant structural changes with a diminishing role for the territory-based pricing regulator in particular in relation to pricing in the electricity sector. These changes mean that the ICRC’s responsibilities have reduced over this period and the commission’s remaining pricing responsibilities are for determining regulated water and sewerage prices and regulated electricity prices for small customers.

The government has decided that, in line with recommendation 1A of the Grant review, in the short term the current commission-led regulatory model will continue. The government will seek in the coming months to make a number of improvements to the regulatory framework in line with many of the recommendations for

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