Download Fragment

Monday, 4 July 2011
Page: 7451

Mr RAMSEY (Grey) (11:44): On 23 May I raised in this House the plight of the 13 outback communities in South Australia—all within my electorate of Grey and all of whom have had the economic carpet ripped out from under them by the state government's February decision to remove more than $1 million from the remote area energy scheme. Withdrawing the subsidy results in residents and businesses in these towns, the bigger users of electricity, facing increased electricity bills in excess of 100 per cent. It is not as if they start from a low base; already, electricity in these communities is about 50 per cent higher than that paid by similar communities on the grid. Typically, businesses have been paying around 29c to 30c a kilowatt hour. New tariffs will mean it will go as high as 60c a kilowatt hour.

For some businesses it will mean extra bills in excess of $100,000 a year. The largest of the 13 affected communities is the opal mining town and tourist icon of the South Australian outback, Coober Pedy. Andamooka is another opal town, adjacent to Roxby Downs, that is also affected. Other towns are Yunta, Nundroo, Marla, Oodnadatta, Marree, Kingoonya, Glendambo, Parachilna, Blinman, Mannahill and Cockburn.

On 15 May I attended a meeting in Coober Pedy with Senator Nick Xenophon and John Darley, an Independent member of the state's upper house. Around 200 people attended, with representatives from Oodnadatta, Andamooka and Kingoonya. The underground venue was crammed, and they were incensed at their treatment by the state government. For most Australians, electricity provision is as simple as ringing up an electricity supplier and asking them to turn on the power. The supplier purchases electricity through the national electricity market and resells it to the customer. Customers can shop around for the best deal but, whichever supplier they select, the same deal is available to customers in Adelaide, Mount Gambier, Ceduna or Yorketown. In effect, electricity is seen as an essential product and supplied to all at the same rates. This situation is brought about by government regulation. A general tariff enables businesses to operate on a more competitive basis across the state. However, the situation only applies where the local distribution network is connected to the national grid.

The reasons for any particular community being connected to the national grid are largely historical and/or opportunistic. In the past, local councils were instrumental in rolling out local networks and, in some cases, generating the electricity locally from diesel generators. At a time when the electricity sector was government owned and controlled, decisions were made to extend the network where practical and communities were given little option but to give their assets to the state in return for reasonable rates supplied through the state network. Other communities were seen as too remote to link to the grid, and generation subsidies have been provided to these communities so they have not been significantly disadvantaged in comparison with the rest of the state. Every other state in the Commonwealth with off-grid generation has developed a similar policy which, in effect, means remote off-grid power is provided at the state-wide price.

On 18 February all this changed in South Australia, when the Rann Labor government announced it was slashing $1 million from the remote area subsidy scheme. For the 13 affected communities this is a staggering blow. The biggest rises savage the business sector, where some major employers are facing annual rises in the tens and hundreds of thousands of dollars. It should be noted these towns are in some of our harshest environments, where summer-time temperatures regularly reach the high forties; refrigeration and cooling costs are high, but absolutely essential; and frosty winter nights are bitter.

It seems to be not understood by the city-centric Rann government that all of these communities are in direct competition with other states in Australia for business, skills and staff. Providing a higher cost environment will cost business and it will cost jobs. Like a carbon tax, a higher electricity price must cascade through the whole community. If a worker cannot afford to live in communities like Marree or Oodnadatta or Coober Pedy, why would they stay when the rest of Australia beckons? The state government has abandoned these communities and stands to be condemned.

Take, for example, the case of Coober Pedy. Not only is electricity difficult there; it is a pretty dry spot as well, so water is also difficult. The Coober Pedy council provides potable water by desalinating a salty groundwater aquifer. The mean average rainfall in Coober Pedy is 156 millimetres a year. Clearly, a reliable water supply is not a luxury; it is an essential. The electricity increase will cost the council an extra $185,000 a year, and they will be compelled to pass on that cost to the water consumers. Before the increase, the consumers were paying $4.93 a kilolitre; now they are paying $5.70 a kilolitre. Australians generally are reeling from savage increases in water and electricity prices—and who could blame them?—but very few will pay $5.70 a kilolitre. The Coober Pedy economy relies heavily on the tourism market and must pitch its product into a competitive environment. Extra expenses in the supply of water, electricity and general services must be passed on to the customer. Coober Pedy is being penalised by the handicapper—in this case, the state government.

This parliament should condemn the South Australian government for its uncaring and savage attack on these 13 communities. Where is the Australian principle of a fair go? Critics may say that this is not the province of the federal government and that South Australians will have their opportunity to express their anger at their government at the next election, and I am sure they will, but as their representative I must take every opportunity to bring pressure to bear on the state Minister for Energy, Michael O'Brien, who dismissed the collective communities by saying: 'These people choose to live there. They can pay the bill.' Okay, Mr Minister, you are right; they do choose to live there, but by the same token the people of Coober Pedy, Oodnadatta and Andamooka do not choose to support public transport subsidies in the city. They do not choose to support the Adelaide Symphony Orchestra, the Adelaide Festival of Arts, the V8 supercar races taking to the streets each year, the new tramlines in the city or, indeed, the $500 million plus that will be spent on the upgrade of Adelaide Oval. When will the Rann government recognise the outback's rights? What is fair is fair. If outback communities are expected to support the city then that support should be reciprocal.

While the state Labor member for Giles and Speaker, Lyn Breuer, says she is not happy with the tariff increase, it seems that her government is not listening. Energy Minister O'Brien has announced a phase-in period. That is not good enough. It is like offering someone a slow poison: it will get you in the end; it just takes longer to kill you.

The government is prepared to put millions of dollars into supplying electricity to our remote Indigenous communities. Towns like Coober Pedy, Oodnadatta and Marree have significant populations of Indigenous people, and their electricity prices are affected by the cuts in the subsidy. The increases flow right through the economy, affecting the price of everything. As a society, we should be doing all we can to attract remote Indigenous populations to communities where there are employment opportunities. This policy is a direct disincentive. Surely we should have consistent policies right across the region. The withdrawal of the support effectively places another barrier in front of good outcomes in this area of Indigenous engagement.

This policy also exposes the state government's attitude to harvesting the fruits of the regions but not supporting the communities from which those profits come. The government is happy to promote the regions as the great new financial benefactors of the state through a much promoted and announced mining boom. These towns are the lifeline for many of these proposals and exploration ventures. I call on this parliament to condemn the government.