(Continued from 25 May 2016.)
Mr VAN HOLST PELLEKAAN ( Stuart ) ( 15:41 :11 ): I advise the house that I am the opposition’s lead speaker on the Statutes Amendment (Electricity and Gas) Bill 2016. Let me say at the outset that the opposition will not oppose the passage of this bill through the house, but we do reserve our right to make amendments in the other place. I have discussed this bill at length with my colleagues, and there are certainly some areas which the opposition has some concerns about.
I accept the value in having sensible laws, and I accept the value in tightening them up, improving them, and making them more modern and contemporary. I think there is no doubt that that is something governments need to do from time to time. We in the opposition are never very excited about additional regulations, additional red tape, and, potentially, additional costs.
It is important to try to get the balance right when attempting to improve regulations which are essentially for the safety of the community, whether that be consumers, tradespeople or operators of equipment and/or infrastructure, etc. We are concerned about the potential for unnecessary red tape and increases in costs, increases in fines, etc. We certainly do not want people who work in the electricity or gas industry—and when I say ‘work’ in it, there is a very broad range of work or involvement that is considered by this bill—to do the wrong thing.
We also certainly do want anybody who does the wrong thing to be identified and appropriately pursued by the law and its enforcers, whether through a police matter, or the Office of the Technical Regulator, or some other relevant party. We certainly do not want to go overboard with regard to pursuing those people in a way that could make doing their work properly onerous, inefficient or costly.
We do find, in opposition, that the government quite regularly increases regulation and red tape for, I am sure from its perspective, the right reasons. But, there are often negative consequences that come from; some of them are unintended, some of them are perhaps considered to be outweighed by the benefits, in the government’s mind, and some of them perhaps not even considered at all.
I will step through this bill the best I can. My colleagues will certainly do that as well, and I know that they will raise issues which are very relevant to their own electorates. I know that they will touch on issues with regard to regulation, legal principle and frustrations that their constituents have experienced with regard to issues like those covered in this bill. I say again: we will always support sensible improvements, but we will always be cautious about trying to make sure that they are sensible.
The Statutes Amendment (Electricity and Gas) Bill 2016 is an omnibus bill developed after reviews of the electricity and gas acts, first mooted in 2012-13, to improve the effectiveness and operation of the legislation. The Minister for Mineral Resources and Energy introduced this bill into the house on 25 May, which was the last Wednesday of sitting. The bill seeks to address a number of wideranging issues relating to the electricity and gas industries, including safety and technical standards, administrative and legal matters, many of which have become apparent over time.
I will just touch on a few key measures in the bill in no particular order. If passed as tabled, this bill would enable electricity entities to prune or remove hazardous trees outside of the currently prohibited buffer zones around powerlines, which includes allowing trimming or removal of trees that may fall onto power lines but are outside the buffer zones. It would enable authorised officers to enter land for the purposes of inspection without written consent in prescribed bushfire zones. Currently, officers are only allowed to enter land with written consent. The provisions still exist for areas outside of the bushfire zone.
This bill would grant authorised officers additional investigatory powers. It would increase the maximum penalties and expiation notices and introduce some new offences. It would enable prosecutions for noncompliant work to be brought within three years instead of two, as noncompliant work is often not identified within two years. It would modify privilege for self-incrimination, making information a person gives relating to the safety of electrical installations or equipment inadmissible as evidence.
The bill would transfer the administration process for approving safety, reliability, maintenance and technical management plans from ESCOSA to the Technical Regulator. It would establish a regime for assurances and enforcement orders to avoid legal proceedings ending up in court. It would extend the Technical Regulator’s authority to direct an electrician or gasfitter to rectify defective electrical or gas installation work or equipment if the work was carried out within the last two years. That is a fairly quick summary. There is more to discuss, but I think that is a fairly quick and fair summary of what the bill aims to do.
I want to touch on the electricity market in general because one of the potential impacts of this bill is to increase the cost of energy, whether that be through the production of electricity or through energy supply directly into households and businesses as gas. I really want to touch on that issue because I think it is actually very important, given that our energy costs are regularly increasing in South Australia. Currently, with regard to installed capacity in the South Australian energy market, we have approximately 5,000 megawatts of installed capacity. Essentially—
The Hon. A. KOUTSANTONIS: Point of order: I have sat quietly and given the member plenty of latitude. He is now speaking on matters that do not relate to the bill before us.
The DEPUTY SPEAKER: I should ask the member to make sure he does relate to the bill then.
Mr VAN HOLST PELLEKAAN: Deputy Speaker, I did say very clearly that this bill has the impact to increase electricity costs, and I think it is important to include in the debate then a summary of the electricity market as it exists at the moment.
The Hon. A. KOUTSANTONIS: The National Electricity Market is not being debated here, ma’am. It is the electricity and gas acts.
Mr VAN HOLST PELLEKAAN: My comments were, again, Deputy Speaker, very clearly about the South Australian market, not the national market.
The DEPUTY SPEAKER: We are going to listen very carefully then.
Mr VAN HOLST PELLEKAAN: Thank you, Deputy Speaker. We currently have approximately 5,000 megawatts of installed capacity in South Australia, and that is made up of approximately 52 per cent gas, approximately 30 per cent wind, approximately 11 per cent solar and approximately 5 per cent diesel.
Juxtaposed against that is the fact that demand we know now we did not know a few years ago, but demand is actually decreasing slightly, approximately one to 1.5 per cent per year in this state. I think that is an important point to point out. Certainly we have in remote outback locations (11 of them I think) remote area energy electricity schemes, which support remote standalone microgrids in towns in outback South Australia. They are fuelled with diesel, and often diesel and gas combined in those areas.
We have 39 wind farms. Very importantly, a feature of our electricity market is that approximately 25 per cent of homes in South Australia have rooftop solar on them. This is a very positive move: we are seeing a general move from fossil fuels towards renewable energy. So there is no misunderstanding, I point out that there is an increased cost to consumers throughout our South Australian electricity consumption market at the moment, and it relates directly to this bill, because this bill has the potential to contribute further to that increase.
We have seen the federal government provide Renewable Energy Certificates, which provides funding support (subsidies, in essence) for renewable energy—
The Hon. A. KOUTSANTONIS: Point of order: he is now debating legislative measures in the commonwealth parliament. There is nothing in this bill that impacts on commonwealth subsidies to wind.
The DEPUTY SPEAKER: We will keep listening. Off you go.
Mr VAN HOLST PELLEKAAN: Thank you, Deputy Speaker. Simultaneous to those federal government subsidies is the state government permissions, and those two things work hand in hand and they are both incredibly important with regard to our South Australian electricity market.
The Hon. A. Koutsantonis interjecting:
Mr VAN HOLST PELLEKAAN: What was that?
The DEPUTY SPEAKER: Order! It is unparliamentary to interject and it is just as unparliamentary to take notice of it. We are listening to you and that is the important thing. The member for Stuart.
Mr VAN HOLST PELLEKAAN: Deputy Speaker, I think it is entirely appropriate to say that the federal subsidies contribute—
The DEPUTY SPEAKER: We are not arguing it now, we are listening to you. Off you go.
Mr VAN HOLST PELLEKAAN: And the state government provides the permissions for where and when these renewable energy projects can be developed, built, installed and operated in South Australia. I say again that this links to cost. The state government has been extremely free with regard to providing these permissions for new wind farms particularly. When I say ‘free’, I do not mean ‘not conscientious with regard to considering their safety’ or anything like that, but they have certainly been deliberately allowing them so that—
The Hon. A. KOUTSANTONIS: Point of order: for the benefit of the house, could the member please point to the clause being debated in reference to what he is saying to the house now about DPAs on wind farms within the bill?
Mr VAN HOLST PELLEKAAN: Deputy Speaker, I have said several times that this is about the cost of energy.
The DEPUTY SPEAKER: I am advised by the Clerk that this wideranging discussion is within normal procedure, so the faster we hear it the faster you can have your rebuttal at the end. Off you go.
Mr VAN HOLST PELLEKAAN: Thank you very much, Deputy Speaker. So the state government provides the permissions to allow renewable energy to be installed in this state, and that is entirely appropriate. However, what has happened is that the state government has allowed so many wind farms to come into our state—and I say wind farms that cannot store the energy that they produce—that it has actually been disruptive to our market and it has increased the cost of electricity in this state.
Very quickly, renewable energy, if you put aside the capital cost, is actually very cheap energy when the renewable energy source is available. When it is windy, wind farms produce cheap electricity; when it is sunny, solar farms produce cheap electricity. That is a really positive thing. There is no doubt and nobody would deny that but, of course, they cannot produce their energy when it is not windy or it is not sunny or the renewable energy source is not available to them. That means that the cheap energy that is provided when it is windy or sunny, etc., has driven some base load capacity out of our marketplace in South Australia.
Port Augusta power station is a very good example of that. The power station did not have the flexibility to turn on and turn off quickly in response to the market. It took 24 hours or more for it to enter and leave the market, so it could not respond quickly to the sunny times or the not sunny times, the windy times or the not windy times. That meant that when the Port Augusta power station was trying to compete in a low price spot market, it just could not do it and it was losing lots and lots of money.
Of course, the flip side was true. When it was not windy and it was not sunny, the Port Augusta power station and other base load providers were able to make very good money, but when they weighed all those ups and downs against each other and when they looked at their overall profitability at the end of the month or the end of the year, they found that the ups and downs were too damaging for their business, so they had no choice but to actually leave the market.
Once that base load provider is gone, then when it is not windy and it is not sunny and we have even less base load capacity, the price of electricity at those times is even higher because it cannot actually be met by a base load supplier. Again, with relation to cost and how this bill might add to costs in our market, it is important to recognise that electricity prices in South Australia are going up for a few reasons, but one of them is definitely government policy allowing too many wind farms to be built in our state—that is, wind farms that do not have storage capacity.
We all know that storage is the thing everybody is hanging out for. All sorts of extremely clever people are working very hard at it and they have made extraordinary progress with regard to small-scale storage in houses and with regard to solar panels on residential roofs. It could even work for small industry with a very light load of electricity. Batteries are coming into the market. They exist at the moment and that is a very positive thing, but until we have essentially storage for the very large scale—let’s say 20 or 50 or 100 wind farms at a time—we are going to keep running up against this problem, which has been created by the government policy of giving permission for these wind farms. Certainly, these remarks are borne out by real-world prices—
The Hon. A. Koutsantonis interjecting:
The DEPUTY SPEAKER: Well, if you’ve got some problem, come and speak to me.
The Hon. A. Koutsantonis interjecting:
The DEPUTY SPEAKER: I can hear what you are saying to the member for Wright.
The Hon. A. Koutsantonis interjecting:
The DEPUTY SPEAKER: Dear, oh dear. Is it going to be like that this afternoon?
The Hon. A. Koutsantonis: No, I’m not going to put up with it. What’s the—
The DEPUTY SPEAKER: Order! If you didn’t want to come and speak to me, you are not going to take up the time of the house. Member for Stuart.
Mr VAN HOLST PELLEKAAN: Thank you, Deputy Speaker. This issue is borne out in real-world prices, and I will come to that shortly. It is also important to comment, with regard to the cost of electricity, that privatisation has absolutely nothing to do with this. It has absolutely nothing to do with it whatsoever because, typically, South Australia has the highest electricity prices in the nation and, typically, Victoria has the lowest electricity prices in the nation and both of those markets are privatised. In terms of other markets that are in between—not the highest and not the lowest—there is a range of different ways that they operate too. Privatisation really has absolutely nothing to do with the cost of electricity within our state because it is proven that Victoria is the cheapest and it too is privatised.
I said I would touch on prices to support the things I have been saying and link them to the cost of electricity, which is linked to this bill. I have here in front of me a printout of regional reference prices for the south-east of Australia, for some different states. The most recent date I have is 8 June, which is yesterday. It shows that South Australia has the highest priced electricity both with the regional reference price for the day, at $89.80 per megawatt hour, and also with regard to a peak for the day, at $105.28 per megawatt hour.
I also point to the futures prices. I should say that the numbers I have just quoted with regard to regional reference prices come from AEMO (Australian Electricity Market Operator) and that the prices I am just about to quote with regard to base futures contracts come from the ASX. They show that South Australia has the highest futures prices in 2017. I should also say that this is a national average, because they can be provided monthly or quarterly. For 2017, the average base futures contract price is $86.03; for 2018, it is $90.42; and for 2019 it is $70.00 in South Australia. This is contrasted with Victoria, which has the lowest: for 2017, it is $45.55; for 2018, it is $45.84; and for 2019 it is $45.00.
When we have discussed these issues in the past, not directly but through the media, the minister made a valid point, and I would like to touch on that. He said the futures prices that are available at any one point in time are usually not the prices that eventuate in the market. They are usually offered at higher prices than they turn out to be. The reason for that is that if an electricity provider is offering a contract price to an electricity customer who wants to buy a significantly large quantity of electricity into the forward market, that is usually because that customer has a very strong need for security.
That customer cannot wait for the spot price on the day, not usually because it is so worried about the price—it is often because it wants to factor that in to its forward planning—but usually because security of supply is the key. That is usually the primary reason a customer would buy into the forward market. If you go back to the side of the supplier, to offer genuine security of supply to that major customer on a contractual basis, given what I have said before about there being significant fluctuations in the price—between very low prices when it is very windy and very sunny, to very high prices when it is not windy and it is not sunny, because we cannot store that renewable energy—that supplier who is contracting to deliver will always err on the side of the higher price.
It is actually very difficult, and I would say nigh on impossible, for that supplier to offer, with certainty, a price into the future. So given the fluctuations, that supplier will offer a much higher price. Those prices may or may not be taken, they may or may not be contracted; we find out later the deals that are actually done. I will come back to the point the Treasurer makes, that the forward prices do not always eventuate. He is quite right about that, he is quite right, but what is equally true is that the forward prices—
The DEPUTY SPEAKER: The Clerk has said to me, and it is quite true, that you need to come back to the bill. You are now moving a little bit too far away.
Mr VAN HOLST PELLEKAAN: Yes, thank you, Deputy Speaker. I am working very hard on the vein of the cost of electricity as it is linked to the bill.
The DEPUTY SPEAKER: Come right back to where we need to be.
Mr VAN HOLST PELLEKAAN: I am actually trying to point out an area where the Treasurer has been quite correct.
The DEPUTY SPEAKER: Just keep going.
Mr VAN HOLST PELLEKAAN: They are still a very accurate indicator of the relativity of electricity prices between states, so they will all be higher in terms of forward offers. They were typically all reduced, but the relativity between the states will typically stay the same. So, seeing forward prices higher in South Australia than in any other state will almost certainly eventuate in actual prices being higher in South Australia than in any other state.
I would like to touch on interconnectors too. Interconnectors are often seen as a way of smoothing out electricity prices, and in fact they are the type of infrastructure that is addressed in this bill. This bill touches on a very wide range—
The DEPUTY SPEAKER: You have touched on it. Perhaps we could try to get back to where we need to be. I am being advised that you are way off.
Mr VAN HOLST PELLEKAAN: Are you saying that—
The DEPUTY SPEAKER: We need to look at—
Mr VAN HOLST PELLEKAAN: Are interconnectors not part of this bill?
The DEPUTY SPEAKER: Let’s see him bring it back then.
Mr VAN HOLST PELLEKAAN: Deputy Speaker, to the best of my knowledge, interconnectors are one example of the type of infrastructure that is covered by this bill. If interconnectors are built, they have a very long amortisation period. They are extremely expensive. They do have the capacity to keep electricity prices as low as possible by sharing electricity between states. It is a very sensible concept and it happens already. One proposal in South Australia is that we would increase the capacity of the two interconnectors that we have that link into Victoria. This is exactly the sort of thing this bill is here to deal with.
Of course, the cost of building an interconnector is amortised over a very long time. If the electricity market does not change much, and if the northern power station has gone out of production, as it has, and as a consequence of that we are able to use an interconnector to import more coal-generated electricity from Victoria into South Australia via an interconnector, that certainly will contribute to keeping the costs of electricity down. It would not necessarily contribute to reducing greenhouse emissions or anything like that, but it certainly would do that.
If, on the other hand, well within the amount of time over which the cost of a new or an expanded capacity interconnector was going to be amortised, the technology I referred to before is available to store large amounts of electricity that is generated by renewable energy, we would still have to pay for the interconnector but we would not need it. That is the sort of difficult crystal ball gazing, in some regard, that is necessary in relation to interconnectors because, once it is built, you have to pay for it regardless, and regardless of whether you use it. You cannot get out of that cost at all.
This bill deals with a wide range of matters, from electricians and plumbers, doing electrical work and gasfitting work in residential houses, all the way through to high voltage lines and interconnectors.
The DEPUTY SPEAKER: Where does it deal with interconnectors?
Mr VAN HOLST PELLEKAAN: Under infrastructure, Deputy Speaker. Of course, another very important issue linked to this bill is that of land access. Whether it be land access for a new wind farm, whether it be land access for a new powerline (high voltage or low voltage), whether it be land access for the purposes of inspecting infrastructure or vegetation, or addressing, improving or making any changes whatsoever to that vegetation or infrastructure, land access is incredibly important, and it is also central to this bill.
There have been a lot of very tricky issues—and I would say this for all of us, in government and opposition—difficult, challenging issues to deal with in regard to land access. That has been the case particularly in relation to the wind farms which the government has been giving permission to across the state and which have contributed to higher electricity prices. I know that many of my colleagues in their contributions will also touch on land access.
Land access is changing a lot at the moment, and members will remember a bill we passed through this parliament last year with regard to putting electricity generating infrastructure on pastoral leases. They might be on pastoral leases and linked to the grid, or they might even be on pastoral leases and separate from the grid if there is an appropriately scaled electricity consumer in the vicinity of that new development. So, access to land is very important.
We saw a very unfortunate situation—in fact, it is still being dealt with, to be quite blunt—in regard to the Hornsdale wind farm in my electorate. The government provided permission for a new wind farm in exactly the same place as the government had previously provided permission for exploration and mining. It caused a great deal of angst locally. This sort of thing is incredibly important in the context of this bill because the bill talks about where electricity and gas infrastructure may go.
I now come to the issue of jobs and employment. The bill is linked to the cost of electricity, and the cost of electricity is linked to the profitability of employers. The profitability of employers is linked to our state very clearly because we have the highest unemployment in the nation and we also have the highest electricity prices in the nation. I would be very concerned if this bill were to increase the cost of electricity even more, as it may well do, and then, unfortunately, make unemployment in our state even higher than it actually is.
With regard to consultation on this bill, I would like to thank the minister and the minister’s office, his staff, and also the staff from the Office of the Technical Regulator, and my staff member, Mr Chris Hanna, who does an extraordinary job supporting me in my shadow portfolios and in other things as well. I appreciate the fact that, as always, the minister’s staff are very straightforward, very open, and they answer all the questions they can at the time. One of the difficulties that we always have is that at the time we get the briefing—and this no-one’s fault—I do not know all the questions that I want to ask.
I have no doubt that the minister’s staff would answer more if they could, but from the perspective of a shadow minister you are every day trying to get on top of things a bit more, a bit more, and a bit more, and there are no other people to go to for support. There is nobody else to tell the shadow minister questions you need to ask of the minister’s staff. Some questions have come to light particularly through discussion with my opposition colleagues since we had that briefing. Nonetheless, I again thank the minister’s office and the OTR staff for the way in which they have always, in my experience, gone through this.
The government tells us that it has consulted with SA Power Networks, ElectraNet, Envestra, AGL, Consumer and Business Services, ESCOSA, the LGA and the ASU. The government has advised me that none of the organisations that provided support raised any concerns whatsoever with this bill, so that is positive. The minister’s staff told me that, if any others come with subsequent advice which is contrary to the bill, they will certainly let me know.
With regard to the consultation that I have pursued, again, I have spoken with ESCOSA, SACOSS, the Energy Consumers’ Council of South Australia, the Master Builders Association, the National Electrical and Communications Association, Primary Producers SA, SAPN, the LGA and the Small Business Commissioner. When I said I have ‘spoken with them’ I should have said ‘asked them for feedback’, because that is what I have done.
I have received feedback from some of them, and it has been mostly supportive—not entirely supportive, but certainly mostly—and I am waiting to get more feedback from others who have not had the chance to get back to me yet. When I receive that feedback I will share it with my opposition colleagues, and then we will come to our final position on this bill.
I now want to go through in more detail the key areas that this bill addresses. This bill addresses 20 key areas, and I will step through them one by one for the benefit of the house and anybody who might read Hansard late at night. It is something that we do in this place, but I do not imagine there are too many people out there who would do it for fun, but we do know that there are some who take their opportunity to access Hansard extremely seriously.
I should say for the benefit of the house and the benefit of you, Deputy Speaker, that I am working in the same order through the minister’s second reading speech that he inserted into Hansard. That will help everybody, because that is the order in which the minister’s staff and the staff from the Office of the Technical Regulator briefed me as well. The first issue is that:
The Bill provides that electrical and gas installations must be designed in accordance with technical and safety requirements under the regulations.
The key word there is ‘designed’. Electrical and gas installations must be ‘designed’ in accordance, not just ‘installed’ in accordance. That is very much the key issue, and it certainly seems to be a very fair issue to address but there are a few questions with regard to how far back in the supply chain you can go pursuing people with regard to design. On the face of it that seems to be fair, but we are seeking some feedback on that. The second key issue that the government addresses in this bill is that:
The Bill enables, but does not require, electricity entities to prune or remove ‘hazard trees’ which are outside t he currently prescribed clearance and buffer zones around powerlines in the bushfire risk area…
This is a very significant issue, and I know that many of my colleagues will comment on this. It might interest you, Deputy Speaker, to know that that the regulations that cover this sort of thing are well in excess of 100 pages. I do not think that anybody who deals with it is really happy with those regulations. That is not to say that it would be easy to improve them, but nobody wants to be dealing with 100 pages or more (I think it is closer to 200 pages) of regulations.
They are quite unusual in some ways. There are some very specific zones delineated by metres—meters around towers on high-voltage lines, meters away from the actual high-voltage lines themselves when they are away from the towers. I have seen in my own electorate that they can result in some very unusual tree pruning. You can have trees where half of the tree is hacked out and the other half is left there because the electricity entity is not allowed to touch the other half of the tree if the zone, that is clearly defined in the regulations, stops in the middle of the tree. This part of the bill has the potential to address exactly this sort of thing.
There are of course a lot of different opinions between landholders. You can imagine somebody whose freehold land could be a massive swathe of outer country grazing land in a pastoral zone. That type of person might be very comfortable in saying, ‘Just cut down anything you want. Cut down as much as you want. Just make it safe.’
They would not necessarily say that because they wanted to get rid of the trees but because they want it to be safe, and they do not want the electricity entity to have to come back anytime soon. So, they might be of the mindset to say, ‘Please, just cut as much as you can,’ but, of course, the electricity entity is limited as to how much it can cut. You might get another person in a country area who has a winery, a restaurant, a B&B or a home, and the work that is required to be done by the electricity entity with regard to trimming the trees could be quite practical, could be for all the right reasons, could be well within the guidelines that they are meant to be operating within but, for the person who loves that tree, it could be an absolutely devastating outcome.
No wonder the regulations are nearly 200 pages long, because how on earth would you be able to deal with such a wide range of those sorts of issues? There will certainly be more said on that issue by my colleagues. In conversation with SAPN, they actually indicated that they would like to see those regulations adjusted. They will have an opinion, there will be others who will have a different opinion as well, but it is interesting to see that they find that those regulations are, in their opinion, restrictive.
The crux of what is included in this aspect of the bill I personally support wholeheartedly. It makes great sense to say that, if you have a tree that is outside the zone determined by the regulations, and it has the potential to be dangerous and create bushfires, typically because it is very tall and could fall onto the high-voltage lines—usually it is high-voltage lines, but not always—and if an arborist was to give a professional opinion and say, ‘Yes, there is genuinely serious potential for that to happen,’ then the electricity entity should be able to remove the tree or whatever part of that tree it is appropriate to remove so that the electricity line, in all probability, would not be impacted, and the chance of bushfire would be significantly reduced.
It is interesting to note that, in the last round of price setting submissions/negotiations undertaken by the AER (Australian Energy Regulator), SA Power Networks asked for a very significant increase in their allowable cost, which leads to the foundation of the charges that they can put towards electricity costs. They asked for a significant increase in the cost of tree trimming. The government actually opposed that. The government at the time wrote to the regulator, and it is my understanding that the Minister for Energy asked the former minister for emergency services to write on behalf of the government to say that it did not want that extra tree trimming provision to be incorporated, but it is now here in this bill.
It is important to point out it is not exactly the same thing. The way of going about trying to get an arborist to, essentially, recommend that the tree be cut or trimmed in some way is a bit different, but it is certainly a turnaround in the government’s position. It is certainly something that has the potential to increase the cost of electricity, which comes back to my earlier points.
No doubt the arborist will charge for the opinion. No doubt, if the opinion is that the tree should be trimmed or felled, it will cause a cost to the electricity entity to go and do that. So, when we come around to our next round of AER hearings with regard to what the distributor (SAPN) is allowed to charge, there will be a very real cost that the distributor has incurred because of this bill, which will flow through to electricity prices.
I would have to say this is going to be a difficult issue for the opposition to come to a landing on between the houses. We understand how critical it is to protect our state as much as possible from bushfires, but we also do not want electricity prices to be increased any more than they actually need to be. The bill also:
… strengthens bushfire prevention measures by enabling electricity officers (appointed by an electricity entity) to enter land that is not public land in the bushfire risk area at any reasonable time and without prior notice for the purpose of inspecting infrastructure. This will assist in the identification of hazards, including hazard trees.
I do not think it is going to be hard for the opposition to come to a landing on this issue. While we have not taken a position yet, I foreshadow that the opposition will very likely be quite opposed to this issue. There is any number of situations, and many of them linked to government agencies, where people are allowed to come onto property. I think all members of this house would think it was very fair to give notice beforehand.
I am not talking about a bushfire emergency, nor am I talking about a situation where you need a really urgent repair. This is particularly for entering property for inspections, not in a hazardous situation. I think that removing prior written notice for the purpose of coming onto the property for an inspection is something that is going to be very difficult for my colleagues to support. Once we have gone through this debate and looked at this in the committee stage, I will have more information to take back to them so that we can make our decision. Moving on to the next section of this bill:
Authorised officers are granted further powers under the Acts, including power to stop and inspect vehicles, to require infrastructure, installations or equipment to be tested for safety, to require persons to identify themselves and to require persons to attend for interview and answer questions. These powers, and existing powers, may only be exercised as reasonably required for the administration or enforcement of the Acts. The further powers have been identified as necessary, as electricians and gas fitters have been suspected of hiding evidence of offences against the Acts in their vans, and authorised officers have found unidentified persons working on infrastructure, but have not had power to ask them to identify themselves or to present evidence of their authorisation to perform such work. This will contribute to the safety and security of electricity and gas infrastructure and installations.
Personally, I am quite comfortable with that, but I can tell the house that some of my colleagues who are more legally minded than I am are very concerned about this part of the bill. I guess it is fair to say it is a double-edged sword. When everything is going well, and the authorised officer, on behalf of the electricity entity, is using this power 100 per cent appropriately, then why would it be a problem?
That would be my view, and I do not think for a second that any authorised officer would deliberately use it inappropriately, but it has certainly been the case that a wide range of authorised officers have used that sort of power inappropriately. To use a completely different example, we would have all seen in the media the example of a police officer in Queensland who is currently being investigated and suspended from his duty without pay for the way he pulled over a person in a ute. It is just an example; I deliberately did not use an OTR or electricity entity officer—
The Hon. A. PICCOLO: Point of order, Deputy Speaker: I think we have been quite patient, and I know the member wants to branch out to a whole range of other issues, but could he get to the root of the issue first?
Mr VAN HOLST PELLEKAAN: Deputy Speaker, I very deliberately did not use a South Australian electricity entity authorised officer because I am not trying to point the finger at them.
The DEPUTY SPEAKER: I don’t think that is what they are referring to. They want you to tighten it up and move it along a bit. You are only up to page 1; that is the trouble. If you are going to go through everything paragraph by paragraph, it is going to be a very long contribution, that is all.
Mr VAN HOLST PELLEKAAN: The next issue the bill addresses is:
Authorised officers will also be granted power to issue enforcement notices for the purpose of securing compliance with the Acts. These notices enable authorised officers to require persons to take specified action, comply with standards, undertake specified tests or monitoring, provide reports or stop faulty work from proceeding.
This is certainly something that could increase the cost of electricity. This could certainly be considered additional red tape. The next issue this bill addresses is:
…an increased expiation fee of $1,000 for the offence of reconnecting the electricity or gas supply, or a cathodic protection system, without the written approval of an authorised officer after the supply has been disconnected by an authorised officer or the Technical Regulator for safety reasons. This addresses the serious risks associated with unauthorised reconnections, including those that follow police drug raids on properties.
I think that is extremely fair and I do not think I will have any difficulty explaining to my colleagues that this is a part of the bill that should be supported. The next section of the bill states:
… aligns the maximum penalty for maintaining an electrical or gas installation with that for performing work that might make the installation unsafe…A consistent maximum penalty of $50,000 for bodies corporate and $10,000 for natural persons, is set for both offences. The present maximum penalty of $250,000, is retained, but applied only to infrastructure owned by bodies corporate that act intentionally or recklessly.
Again, I have no problem with that. If those fines are imposed in situations where somebody has committed an offence, particularly causing harm or potential danger, that seems entirely appropriate. The next issue the bill addresses is:
It clarifies the circumstances in which accidents must be reported to the Technical Regulator. It also enables the Technical Regulator to restrict access to infrastructure, installation or equipment involved in an accident during investigations.
Again, I think that is in principle quite fair, as long as it is not used in a heavy-handed way. I give the example of a transport company whose driver has done the wrong thing, maybe has committed some offence—not necessarily on the road, not necessarily a driving offence. That transport company’s truck can be kept off the road while that offence is being investigated. That is an example of a situation where a company, an operator, through no fault of his or her own, could actually be penalised unfairly because the person really has done nothing other than employ a person who broke the law. With regard to this section of the act, I think it is very fair in principle, but there may well be some situations where it may be inappropriate. We will deal with that in the committee stage.
The bill modifies the privilege against self-incrimination for natural persons by requiring them to provide information relating to safety. Such information, however, will not be admissible in evidence in proceedings against the person who has potentially performed the faulty work. This is something that we discussed in our briefing. It is something that I know at least one of my colleagues will raise from a legal perspective. I do not have any personal concerns at all with the idea that this act, if changed in this way, would make it possible to force a person to provide, in my mind, necessary information. However, how that links to modifying privilege against self-incrimination is something that we will again have to deal with in the committee stage.
The next issue this very broad bill deals with is better protection of electricity and gas infrastructure and installations. It increases penalties for persons who, without proper authority, enter enclosures where electrical or gas infrastructure is situated. In particular, it deals with persons who steal copper wire from electrical substations. The bill also prohibits the burning of materials in proximity to electricity and gas infrastructure without the written authorisation of the owner or operator.
Again, I have no hesitation in saying that I think that is perfectly fair. People who are entering these premises or the vicinity of this infrastructure without proper permission or without proper purpose should certainly not be able to do that, whether it is stealing copper wire or whether it is lighting fires in their proximity. It has certainly happened that people have tried to sleep in them or even stay in them for a few days occasionally. While we might all feel for the person who believes they have no choice but to do that sort of thing, it is still not something this house would want to happen.
The next thing the bill does is streamline administrative processes by transferring responsibility for approving safety, reliability, maintenance and technical management plans under the act, and the electricity switching manual, from the Essential Services Commission of South Australia to the technical regulator. I confess that I do not understand. I have not been able to do enough research yet to get to the bottom of everything that is incorporated in this part of the bill, but I am certainly very happy to say that ESCOSA’s feedback on this was certainly positive. ESCOSA said that they were very happy for this to happen. In fact, ESCOSA said that they requested it to happen, and I am sure that the feedback that the government had from ESCOSA would be exactly the same.
The next issue the bill deals with is that, under the proposed regime, ESCOSA or the Technical Regulator may accept an assurance given by a person regarding matters in relation to which they have a power or function under the act. Once an assurance has been accepted, ESCOSA or the technical regulator must not proceed against the person in respect of the conduct specified in that assurance unless the person fails to comply with that assurance.
Again, that seems very fair. Why would you want to proceed to some form of litigation if you did not need to? If a breach could be identified or if a problem needed to be remedied, and if there were good reason not to proceed to some charge or other legal pursuit, why would you not just deal with that person? If you come to an agreement that they will remedy whatever the issue is and, if they do it, then let’s let that be that.
At present, a direction to rectify defective electrical or gas installations or equipment may only be given to the person in charge of the installation or the occupier of the place in which the installation is situated. The bill would enable the Technical Regulator or an authorised officer to give such direction directly to the electrician or the gas fitter who performed the work if the work was carried out within the last two years and if the person in charge of the installation agrees.
I cannot see any great problem with that. It is probably hard to know all the circumstances where that might be an issue. It might, for example, be an issue if the regulator was going to go straight to the electrical or gas installer and require them to do work and, if that was going to result in some cost to the owner of the property, the owner of the property might feel that he or she needed to agree—because, as I have just said, that would be required under the bill—but might have found another way to do it.
We are all familiar with situations where a government entity engages a contractor to do some work and it often might cost more than when a private person or entity engages a contractor to do more work. I understand that this is very much about trying to remedy work that was not done appropriately the first time, essentially, but there might well be other work that is attached to that. It may not be as simple as just getting the contractor to go back and remedy all of it.
If there would not be any cost whatsoever to the property owner or, in fact, the person or company that was initially in charge of the work, that person or company might have wanted to do the work themselves to avoid using the contractor who stuffed it up the first time. They may not want that person anywhere near the job again, but let us just hope that the regulator could work with the property owner and and/or the person who was in charge of the work previously.
The bill enables prosecution for noncompliant work on electrical or gas installations to be brought within three years in place of, currently, two years after the date on which the offence is alleged to have been committed. This is required because noncompliant work is often not identified within two years. I think that would be quite okay. I am not a tradesman. I do not have the experience of a regulator. I am not able to envisage all the situations where that might be necessary.
Suffice to say that, as far as I am concerned, if a person does the wrong thing and it is possible to instruct them to rectify it, as per the last part of the bill I was talking about, or if they are actually to be prosecuted as is included in this part of the bill, then if it takes three years to identify the breach and prosecute them, so be it. I am comfortable that they should have three years.
Next, provisions concerning bodies corporate that have become standard in recent legislation have been incorporated into this bill. They provide the establishment of proper workplace systems and procedures designed to prevent the contravention of the act. On the face of it, that would seem very appropriate. Nobody wants workplace procedures that would contravene the act but, again, I would say this is potentially an area where unintended red tape might be brought into the equation.
Of course, we want everything to be done very safely, but we do not want to raise the bar on a company so that it has to check and double-check and triple-check and comply with rules and regulations that would essentially be red tape, would essentially add cost and would again result in higher electricity prices, because anything that adds costs at this level will flow through to higher electricity prices.
Another thing that this bill does is it provides that directions are to be issued during periods of gas rationing enabling the minister to require information to be provided, usually by the gas entities or large users, at specified times; for example, daily, rather than (at present) only each time in response to a specific notice. I think that seems very fair. In a time of gas rationing, I have no doubt that the government would be doing everything that it possibly could to support not only the gas entity but, more importantly, the gas consumers who would be dealing with very difficult situations. I believe that the government should have as much information at its disposal as it would need.
We can all remember not so long ago (perhaps a year or so ago) the pipeline that became unserviceable. It had a leak. I think it was around Whyte Yarcowie, which meant that a large section of the north of the state had its gas supply cut off, and the Upper Spencer Gulf cities of Port Pirie and Whyalla were the most severely affected. It was a very serious and difficult situation for homes and businesses, for customers and employees, at that time.
I think that the government should have as much information as it needs, and the ability to require provision of as much information as it needs, so that it can help resolve those situations at whatever level it is involved. It might just be with regard to directing the gas rationing or it might be with regard to contributing one way or another to the rectification of the actual fault. The government would do what it could at the time, and needs the information to do so.
The next section of the bill clarifies that metering providers would be authorised to temporarily disconnect the electricity supply while installing or replacing a meter and reconnect the supply after the meter has been installed or replaced. Certainly on the face of it that seems sensible enough, but I can tell you that SAPN are not thrilled with that part of the bill. That does not mean that the opposition would object to it, but it does mean it is something that needs to be thoroughly considered.
SAPN say that if they are responsible for the safe delivery of mains electricity to a property then they should be the only ones allowed to disconnect and connect it, because if anybody else is doing it they do not have complete comfort that it is being done safely. I do not have enough technical or trades experience to know whether that is true or not. It could also be easy for somebody to mount an argument to say that SAPN’s opinion is based on SAPN wanting to retain that work. SAPN would not be the only organisation in the universe to have ever said, ‘No, we would like to retain demarcation. We would like to retain our capacity to be the only ones to do this part of the work.’ I genuinely do not know.
I have no doubt that SAPN provided me with that information with all good intentions, and it is something that we might get to explore during the committee stage of the bill, but that is certainly something that we all need to look at. The only other thing that I would say on that section of the bill is that if it could be shown that costs could safely be reduced or avoided by this section of the bill so that increases in electricity prices across our state could be avoided, then certainly that would be extremely important to me with regard to trying to consider how the opposition would deal with that in terms of trying to juxtapose efficiency, safety and cost.
The next section of this bill attempts to clarify that, if the Technical Regulator considers that urgent action to issue a public warning statement about unsafe electrical or gas equipment or installation practices is required, the Technical Regulator is not required to conduct a hearing or invite submissions. Urgent public warnings, which might, for example, be based on information received from regulators in other states, will not be delayed by hearings and the evaluation of submissions. Again, that seems pretty straightforward to me.
If urgent action is required, whether to make a statement about an unsafe practice or actually deal with an unsafe installation, then I think that that should not be delayed because, both in electricity and gas supply, we are dealing with potentially very hazardous situations. If that process is undertaken appropriately by the regulator—and I have no reason to doubt that it would be—then why would you not let them do that? They would, of course, need to gather all relevant information to begin with so that they could make a responsible statement and provide responsible warnings, but not have to be slowed down by a structure of hearings.
The next issue that this bill deals with is that the maximum penalty for a breach of a regulation is increased to $10,000, and authorised officers, or electricity or gas officers authorised in writing by the Technical Regulator, are enabled to give expiation notices for alleged offences against the act. Again, I think that seems quite reasonable if it is done properly. In general, I am a supporter of the ability for authorised officers, whatever the context is, to give expiation notices. It is typically a way that can identify a breach and provide a penalty for a breach but not require a legal or institutional process to be instigated as long as the expiation fee is set appropriately.
It says that the maximum penalty for a breach of regulation increased to $10,000. I would like to assume that it is not a flat $10,000 and that some responsible decisions would be made along the way. I would, of course, like to see whatever the government or the regulator intends, presumably through regulation, that the actual financial penalty would be, but, yes, in general, if it is possible to give a fine, an expiation notice, and have a very clear record of why the expiation notice was provided and that that record is retained in longevity, because we need to create a history about people who receive these expiation notices, then the principle is exactly the same as a low-level speeding ticket, for example, for a road user.
Deputy Speaker and minister, you will be pleased to know that I now come to the 20th of the government’s 20 aspects of this bill. The bill enables documents required or authorised to be given to a person to be transmitted by email, thereby modernising the day-to-day administration of the act. Who would not want to do that? It seems quite sensible. That is a very straightforward thing. I cannot imagine that any of my colleagues would object to that. There is a range of skills amongst our team with regard to the use of communication technology, but I know that every single one of them is certainly up to speed using emails, on a couple of occasions with staff support. That would seem to be an extremely fair and sensible issue.
There is a summary of the government’s bill to the best of my ability. The reason that I have tried to do that very thoroughly for the government, the OTR and the government’s advisers is that, as I said right at the start, we are not going to object to this bill. We are not going to try to stop passage of this bill in this house, but there are some issues about which a significant number of my colleagues feel very strongly.
After everybody has had their opportunity to speak, and after we have had the opportunity to go through the committee stage of the bill, it will be necessary for us to go through the process of coming up with the actual opposition position, the parts that we support, the parts that we oppose and the parts that we want to amend, and so forth. I say very openly and clearly that those are possibilities. I do not want the government to be surprised or caught out between the houses: I want the government to know exactly where we stand, and I have given comments to those 20 parts of the government’s bill as openly and generally as I possibly can.
I will just wind up by saying that, like so many things that we deal with in this house, we have come up with a balanced landing point. I have no doubt that what the government and the regulator are trying to do through this bill is with good intentions, and we need to consider them with good intentions, but also consider what unintended consequences there might be: unintended consequences with regard to cost and how it might flow through to electricity prices; how those unintended consequences might flow through to ever-increasing unemployment in our state; and how some of those consequences may even (and this is not my area of expertise) have unintended legal consequences that might inappropriately affect people’s civil liberties. With those words, I conclude my remarks.