Wednesday, 18 October 2023

Water policy

David DAVIS (Southern Metropolitan) (12:18): (308) My question is to the Minister for Water. Minister, in the three years 2021–22, 2022–23 and 2023–24 the Andrews–Allan Labor government would have drained $596 million minimum from Melbourne’s four water corporations in capital repatriation, effectively cycling water rates back to government in a nasty Labor water tax to mask the true extent of debt on the government’s balance sheet. Minister, you have been the minister through two of these tough financial years. Why have you allowed this nasty water tax to be levied on struggling households?

Harriet SHING (Eastern Victoria – Minister for Housing, Minister for Water, Minister for Equality) (12:19): Thanks, Mr Davis. Well, at last you have gotten a question right, so thank you for your new-found interest in water. It is actually really important to pick up on the preamble of what you have just said in your question, because it betrays a fundamental lack of understanding about the way in which capital repatriations operate but also the work that has been done to make sure that our water bills here have no equivalent in Australia for being lower. Our water bills in Victoria are the lowest water bills in Australia. By owning our water corporations we are really confident that they are running efficiently and providing affordable services, and they are also paying dividends. So Mr Davis, to that extent you have some semblance of an understanding about the way in which water corporations operate. But those dividends remain at a responsible level under the Allan Labor government, and they are a benefit of the state owning water corporations rather than what we have seen with private companies in the energy sector. You would know only too well about what happens with private companies in the energy sector, Mr Davis, and the fact that they do not in fact return benefit to the state.

What we are doing in a range of ways is making sure that dividends are at responsible levels, and they are generally determined using benchmark distribution payments: the government business enterprises of 65 per cent of pretax profit. As you would be aware, Mr Davis, and as I would hope you would be aware notwithstanding the preamble of your question, the payment of a dividend – and let us be really, really clear about this – does not result in increases to customer bills or reduced service outcomes for customers. Nor will it affect water corporations’ investments in capital projects. That is a really fundamental point, Mr Davis, because you seem to have missed it in asking your question about the impact that this would have on water bills. It does not increase customer bills, nor will it affect water corporations’ capacity to deliver investment in capital projects.

Mr Davis, it is a shame that when we talk about this you are too busy scaremongering and using misinformation to presumably launch some kind of narrative about the cost of living. I cannot be any clearer, Mr Davis: no increase to costs for consumers and no decrease in capacity for water corporations to invest in capital projects. But we also know that capital repatriations do not impact upon prices or –

Nicholas McGowan: On a point of order, President, the answer is required to be factual. The minister has stated that taking dividends out does not have any impact on prices, yet the minister would know very well that if you do not take the dividends out you have the capacity to lower prices, so that is not factual.

The PRESIDENT: That is not a point of order.

Harriet SHING: Thanks, Mr Davis. I am always happy to help educate you about how this system works.

David DAVIS (Southern Metropolitan) (12:23): I thank the minister for her answer, but she does appear to be confused about the difference between capital repatriations and dividends. My first question was entirely about capital repatriations – $596 million – but because the minister in her answer referred to dividends not capital repatriations in the main, I am going to ask about dividends in total here. Over the same time period the government collected cash dividends from the four metropolitan water authorities: $306 million on top of the $596 million water capital repatriations. Minister, that is a total of $902 million, just short of $1 billion, in that three-year period. Can struggling Melbourne household budgets afford your $1 billion and growing water tax?

Harriet SHING (Eastern Victoria – Minister for Housing, Minister for Water, Minister for Equality) (12:24): Gee, I love a bit of mansplaining on a Wednesday afternoon, Mr Davis.

Georgie Crozier: On a point of order, President, the minister needs to retract that. That is unnecessary. It was a simple question that Mr Davis asked, and the minister has got no room to be carrying on like that in this chamber. Just answer the questions and stop being so patronising.

The PRESIDENT: I suppose to ask someone to retract I would have to ask Mr Davis to ask for that if he is offended.

David Davis: President, it is a comment that was directed at me when I was actually trying to provide assistance to the minister, who clearly did not understand the difference between capital repatriation and dividends.

The PRESIDENT: I ask Minister Shing to withdraw the comment, please.

Harriet SHING: Okay. Thank you, President. I do withdraw that.

Mr Davis, thank you for explaining at length the framework within which you are seeking to phrase this supplementary question. Again, I just want to be really clear: the ESC has been a very significant part of the work associated with dividends and capital repatriation. This is not new news to you, Mr Davis, and if it is then that shows a pretty significant gap in your understanding of the way in which the pricing work operates. We continue to have some of the lowest water bills in Australia, we continue to be able to support our metropolitan water authorities in the work that they do and we continue to be able to deliver low water bills and continue to invest in infrastructure. That work will go on no matter how much spin you try to put on it.