Premier Peter Malinauskas says average water bills to rise $20 per quarter to pay for $1.5bn water infrastructure surge

A $1.5bn bill to fix what the Premier says is a “public policy disaster” in Adelaide’s north will hit household budgets across the state.

Average water bills will rise by $85 annually to fund a $1.5bn water and sewer infrastructure surge to unlock 40,000 home allotments within four years, Premier Peter Malinauskas has revealed.

Labelling water and sewerage connection failures to Adelaide’s growing north a “public policy disaster”, Mr Malinauskas said $1.2bn of the record spend would fund connections to northern greenfield developments.

As revealed by The Advertiser on Tuesday, the $1.5bn spend will be funded through a mix of increased water bills, government debt and land developer charges.

SA Water customers from July 1 will face bill rises capped at 3.5 per cent above CPI, or $21 per quarter, for an average metropolitan residential customer with typical use and an average property value.

“You can imagine how enthusiastic we are about having this imposition on hardworking families in a cost-of-living crisis,” Mr Malinauskas said.

An average metropolitan business SA Water bill of $4920 is forecast to increase by $348.

Property industry leaders applauded the plan but warned it risked adding to home costs, while the Liberals said they were concerned pensioners would contribute to housing developments through their water rates.

Launching his Housing Road Map before 960 people at an Adelaide business lunch, Mr Malinauskas flagged that extra water bill concessions would be announced soon.

Mr Malinauskas said developers had raised the alarm about water and sewage connections holding back land development in Adelaide’s north, fuelling a supply crisis.

The Advertiser in March revealed water bill increases and deepening state debt were being considered to fund urgently needed connections to major outer suburban housing developments, particularly in the north.

Premier Peter Malinauskas announcing South Australia's Housing Roadmap in a major speech at the Adelaide Convention Centre. Picture: Keryn Stevens

Mr Malinauskas on Tuesday said governments had “kicked the can down the road” for too long on water infrastructure, which had triggered the government’s policy response through the housing road map.

“The truth is the more inquiries we make the more shocked we become. I want to be frank with you – if you believe the water problem is bad it’s actually a lot worse,” he said.

“ … We need major investment in water infrastructure. There’s no capacity for growth, particularly in the north, if we don’t do it.”

He blamed incremental decisions by governments and structural failings within agencies including SA Water.

Under the shared cost model, the $1.5bn infrastructure spend will include $440m shouldered by state debt, which Mr Malinauskas said had been factored into the June 6 state budget.

Developers will pay $10,000 per allotment for greenfield connections – $5000 apiece for water and sewerage.

Infill developments will pay a new $2500 charge from 2024-25 ($1250 apiece for water and sewerage), scaling up to $10,000 by 2027-28. Apartments will not pay water augmentation fees, nor will build-to-rent and not-for-profit housing.

Payments will not be made until settlement occurs on the homes.

Planning reforms include councils being given strict time frames to assess land division applications and an ability for a new state government panel to seize control if these are not met.

Other changes, including accelerating planning code amendments, are predicted to result in houses being built 18 months faster – down to 36-63 months from 54-75 months.

Opposition Housing Affordability and Urban Development spokeswoman Michelle Lensink said Mr Malinauskas’s announcement of the largest single release of residential land in the state’s history, made in February last year, now “appears to be in complete and utter tatters” because of inadequate water and sewer connections.

“My understanding is that the Premier didn’t actually even talk to SA Water before he went out and made these grandiose announcements about greenfield sites, and now the chickens have come home to roost,” she said.

“We’re also very concerned that pensioners are going to be asked to contribute to the developments through their water rates. We’re in the middle of a cost-of-living crisis, and that is something that I think all South Australians, including small businesses, should be very concerned about.”

Property Council SA executive director Bruce Djite Picture: Tom Huntley

Property Council SA executive director Bruce Djite said charges to developers were likely to be passed on to home buyers, adding that the measure of the Housing Road Map’s success would be if supply increased and house prices rose at a measured rate, rather than skyrocketing.

“Look, it’s part of business. If you take the cost on board, you do pass that on,” he said.

“ … Announcements are fantastic and the ambition is great. We really need to see the rubber hit the road. We heard about the greatest land release in the history of the state 18 months ago. Nothing’s happened. There’s not one shovel in the ground.

“The announcements are good. The Premier is right. He’s ambitious for the state. He’s making the right announcements. He really needs that message to trickle down.”

Mr Djite urged an end to the “politicisation of development’, particularly singling out NIMBY politicians opposed to any developments in their area.

Forklift driver dad Tim Masters said new households facing bills of an extra $80 to help fund new water infrastructure would be an added financial blow at a time families could ill afford it.

“Another $80 … that is my kids’ swimming lessons (these extra costs) take away from the things you can do with your kids and the life skills they can be learning,” he said.

The 33-year-old said he was fortunate to work for a good company that looked after its employees but still times were tough.

“Everyone I know is absolutely feeling the cost-of-living crunch … especially when it comes to trying to save money – saving money has almost become a joke now,” he said.

In a bid to keep costs down, the Munno Para family – wife Jessica Blades and children Amelia, 8, and Ryker, 2 – have moved in with relatives while they wait for a house in Kapunda to be built.

“The cost of renting is horrific, electricity is horrific … just everything from petrol to a punnet of strawberries,” Mr Masters said.

Originally published as Premier Peter Malinauskas says average water bills to rise $20 per quarter to pay for $1.5bn water infrastructure surge