The State Government will review the planning and regulatory frameworks governing water and wastewater growth infrastructure investment and specifically how the Essential Services Commission of South Australia (ESCOSA) reviews SA Water's infrastructure plans.
The review is a key initiative from the Housing Roadmap, where the government committed to working with industry to provide a long-term approach to augmentation charging for the 2028-2032 Regulatory Period and beyond.
An independent review will be undertaken and managed through a joint steering committee of the Department of Treasury and Finance and Department for Housing and Urban Development with a particular focus placed on the intersection of economic policy and infrastructure delivery.
The South Australian Government will consider whether legislative change is required regarding the regulatory arrangements around water pricing, including the interaction of ESCOSA and SA Water.
The broad review will consider all relevant legislation, planning and regulatory frameworks and practices that contribute to the detailed planning and investment in growth infrastructure as well as the need for such infrastructure.
It will consider best practices from interstate and overseas and how best to inform landowners and developers of those funding requirements.
The review will make recommendations for improvements that could better ensure that growth infrastructure is in place when required, irrespective of the timing of regulatory periods.
It will also ensure appropriate market signals exist to encourage the efficient provision of infrastructure to areas where it is of greatest value and that infrastructure can be funded equitably and sustainably.
Both SA Water and ESCOSA will be consulted during the review.
Industry bodies have raised concerns with ESCOSA that previous regulatory periods did not prioritise investment in critical infrastructure:
"Members of the UDIA have expressed concern that the draft determination is weighted too far in favour of price reductions at the expense of future investment.
"… without adequate investment and maintenance, the longer-term impacts could be far worse."
Over recent years and successive Governments, SA Water has under-invested in infrastructure necessary to support housing growth.
During this time, land development has also been occurring in locations that require significant new infrastructure investment to service the developments.
These developments have been occurring in the absence of any truly cost-reflective augmentation charge to flag the cost of infrastructure required to accommodate the growth based on zoning in the region.
To view a copy of the Terms of Reference click here.
As put by Stephen Mullighan
The Malinauskas Labor Government is aware that the delivery of water infrastructure for key developments north and south of the city have not kept up with demand for new housing.
That's why we're launching this review to gain a better understanding of the regulatory process that governs water infrastructure investment and how to avoid our State ending up in this position again.
As put by Nick Champion
We are reviewing the framework to ensure continued investment in growth infrastructure is factored into future pricing.
The state must never again find itself with a catastrophic shortfall of critical housing infrastructure constraining the ability of the development sector to support housing growth.
The review will guarantee we have a more holistic view on future investment requirements and the Government has the tools available to invest in growth.
