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Proposed water concessions welcome as part of housing supply boost - but questions remain

The concessions boost was flagged as part of the Malinauskas government’s $1.2b Housing Roadmap package to upgrade and expand Adelaide's water and sewer network, which in turn should enable an acceleration in the building and supply of new housing.

SACOSS notes this package imposes on all water consumers vastly greater costs for additional water infrastructure that was neither analysed or reviewed for its efficiency in the Essential Services Commission of South Australia (ESCOSA) in making its final determination for 2024-28.  

SACOSS awaits with interest further details around the proposed water concession increase, recognising that while a decent concession increase will help pensioners and households with low water use, it may still make little difference to low income households with high water usage, or households who are not eligible (waged poor).

And while the Housing Trust’s name has been restored and this water infrastructure might be required as a foundation for the development of vastly more public and community housing, sadly, no such investments form part of the roadmap package.

Quotes attributable to Ross Womersley, SACOSS CEO

The Malinauskas government's roadmap has the potential to be a foundation stone for housing in this state. The supply of all kinds of housing - particularly public and community housing - has dwindled across the state over many decades, and we welcome the government being prepared to take meaningful action to redress this.

However, we are disappointed there was next to nothing in the roadmap around new public and community housing.

SACOSS is keen to see how the property industry steps up to meet this new challenge. Given the support taxpayers are going to be offering developers for the installation of this infrastructure, SACOSS believes the government should ensure the property sector is held properly accountable for building to high energy efficiency and accessibility standards in return.

Building houses now that are accessible and climate change ready will barely cost any extra, and will bring extra benefits over the long term as homeowners and tenants pay less for their energy bills while remaining healthier.

SACOSS is also concerned there were few details about how the roadmap will increase housing supply to the state's regions. We all know that housing affordability and availability is just as much of an issue across non-metropolitan SA as it is in Adelaide and is especially so in regions with focused economic development such as those in the Upper Spencer Gulf.

In order to unlock this increase in housing supply, we are all facing extra imposts. Industry is facing changes to infill augmentation fees, the government is taking on extra debt, and SA Water has been directed by the government to increase its capital expenditure to deliver the associated water and sewer infrastructure – which its consumers will be paying for into the future.

This means consumers face an average increase in their water bills of around $80 for the upcoming 2024-25 financial year to ensure SA Water is able to deliver on what it has been directed to do. However, given most of this proposed expenditure has not been the subject of regulatory review, and the huge cost escalations in the provision for infrastructure projects like that required for TTG replacement program, can the public have any confidence that these amounts themselves, won’t simply escalate in future?

Among SACOSS's key concerns arising with the Housing Roadmap and ESCOSA’s final determination:

  • As noted by ESCOSA, the Ministerial Direction for SA Water to outlay $1.192b in capital expenditure has not been scrutinised for prudence and efficiency and potentially undermines the principles of independent economic regulation of a monopoly essential service
  • The lack of any future plans in the roadmap for the development of public and community housing, as well as housing supply developments in our regional areas
  • The associated risk of SA Water not being able to deliver on the measures outlined in the determination, with flow-on long term risks for consumers, who face an expected $80 rise for 2024-25 water bills
  • Capital expenditure increasing by 75% compared to the last regulatory period - 98% of which is due to Ministerial Direction
  • The removal of the requirement for SA Water to supply free paper bills

ESCOSA final determination measures SACOSS supports:

  • The introduction of a family violence policy and provisions (to be fully implemented by 1 Jan 2026)
  • The extension of consumer protections to tenants (including hardship policy communications, and information on prices, fees and charges)
  • SA Water being required to develop policies for early identification of customers facing payment difficulty
  • Additional hardship reporting indicators
  • Details for the Energy and Water Ombudsman to be included on bills
Published Date: 
Wednesday, 26 June 2024