Households to save average $200 a year as SA water bills are slashed, with more for business

SA households and businesses are finally getting major relief from their water bill torture, as the watchdog orders cuts worth hundreds of dollars a year to start flowing from next month.

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Households will save an average $200 a year as SA water bills are slashed, in a major cost of living relief decision handed down today by the State Government’s utilities watchdog.

And businesses are set for even bigger savings, winning an average $1350 annual cut.

Depending on water use and property values, some will save even more.

Premier Steven Marshall said the decision was a “victory” for hardworking families.

“We are delivering one of the single biggest cost-of-living reductions for South Australians in recent years, which will put hundreds of dollars a year back in the pockets of hardworking families and local businesses,” he said.

“This will significantly ease the burden on local household and business budgets, providing welcome economic stimulus in the wake of COVID-19 and, in many cases, will have the potential to create jobs.

“For far too long under Labor, South Australians were pouring hard-earned money down the drain every single time they turned on the tap.”

The Essential Services Commission of SA on Thursday handed down its long-awaited pricing order, which stands for the next four years until 2024, and has been 18 months in the making.

The new billing prices take effect from the start of next month.

Water bills are a combination of use charges, and a sewerage rate linked to property value.

Average household water bills reached $782 in 2018, according to the State Government.

It follows an independent report commissioned by the incoming Liberal Government, which found prices had been artificially inflated for years to drive higher State Budget tax revenue.

SA Water is owned by the Government, and must submit its spending plans to ESCOSA for approval. However, the Cabinet retains key powers over aspects of the pricing decision.

The key component is a ruling on the value of SA Water’s regulated asset base, an estimate of the cost of infrastructure the publicly-owned utility owns.

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If that is set at a high level, household and business bills are also elevated and the Government gets more tax as SA Water’s profits are padded.

Mr Marshall has cut that RAB value, delivering savings.

Other factors bringing prices down include lower interest rates, and SA Water efficiencies.

It comes as the Opposition criticises the Government for announcing increases to other fees and charges including bus tickets at a time when lockdowns are hitting household budgets.

The fee and charges rises this year average 1.9 per cent.

Treasurer Rob Lucas says there are programs targeted at those struggling, but others who can pay modest increases should.

Mr Marshall said the Government was also trying to ease the cost of living squeeze with $100 sports vouchers for primary school-aged children, “massive ESL bill reductions”, abolishing payroll tax for all small businesses and reforms that cut the majority of land tax bills.

New SA Water infrastructure programs permitted under the pricing order include supply and security for regional communities such as Kangaroo Island and Oodnadatta.

There is also money committed for a wastewater management scheme at Tea Tree Gully.

Former regulator Lew Owens’ post-election inquiry found SA Water’s regulated asset base had been inflated by at least $520 million in 2012 dollars, driving up prices and the tax take,

Mr Marshall has said he will reduce the RAB by that amount.

In 2014, The Advertiser revealed a stunning resignation letter from former ESCOSA boss Paul Kerin, who quit the post claiming to have been stymied from delivering bill cuts.

When the fees and charges decision was announced a fortnight ago, Opposition Leader Peter Malinauskas said they should have been frozen in SA as had happened in WA.

“When the state is facing its biggest economic crisis in generations, this is the worst possible time for the government to be increasing fees and charges at more than twice the rate of inflation,” he said. “SA households and businesses are hurting, and the last thing they need is the Marshall Liberal Government reaching into their pocket and jacking up a raft of fees.”