Debate resumed from 14th November.

Page 5494

Ms ALLAN (Blacktown) [9.37]: The Opposition supports the Water Board (Amendment) Bill. That should not come as a surprise to the Minister for Housing. A number of allegations were made in the Chamber last night in the debate on the Hunter Water Board corporatisation. We heard over and over again that the Opposition does not support corporatisation.

[Interruption]

Ms ALLAN: We are still hearing that argument in the form of the bleating from the honourable member for Gosford. It is an indication of the Opposition's support for corporatisation that it is quite enthusiastic about this bill. We certainly agree with the need to involve the private sector, where possible, in the provision of infrastructure for New South Wales water boards. In his reply to the Budget the Leader of the Opposition indicated that the Labor Party's proposal is to achieve greater involvement of private sector resources in the provision of public infrastructure. However, the Opposition believes that the Government must live within its means. This involves restraint in both recurrent and capital expenditure. This bill will help achieve this goal. The Water Board has been the subject of criticism over the past few years, and even in the last few weeks in the lead-up to summer, for its poor record on environmental pollution and, in particular, beach pollution. Various sections of the water industry have criticised the board for not being receptive enough to new and innovative Australian water treatment technology. It is a constant surprise to me that, despite the huge public relations budget within New South Wales water boards, at least one company, Memtec, has been consistently able to do over New South Wales water boards in its ability to get its message to the media and the community. No one believes New South Wales water boards when they say that they support the introduction of new and innovative Australian water treatment technology and that they will provide financial support through contracts that will eventually be entered into, but everybody believes Memtec when it says that it is getting a rough deal from the Water Board. It certainly counsels the Minister to somehow or other get those highly paid officers within the public relations section of the Water Board to get their act together and start getting the message across if the Water Board is sincere about setting up some decent procedures for encouraging Australian-based and innovative technology.

At the same time as the Water Board has been experiencing this criticism it has been under increasing pressure to review its pricing policy. During the past three years both business and household consumers have been subjected to a never-ending cycle of price increases. The answer to both these problems is to ensure that the most efficient and environmentally sensitive facilities are available to the board for use in its provision of services. The 20-year business plan of the Water Board requires $12 million worth of new capital expenditure. To fulfil future capital expenditure requirements the Water Board requires the provision of private sector resources. The private sector will build, finance, own and operate the facility. The Government may purchase the project back from the contractor if the need arises. The principle behind the bill is simple. If the Water Board is to enter into contractual arrangements with private enterprise, it must be suitably empowered by legislation to do so. At present the Water Board Act is ambiguous with regard to the provision of infrastructure by the private sector. There is a danger that the Water Board may be acting ultra vires by entering into contractual agreements. Private investors will not commit money to infrastructure if they fear an unfavourable interpretation of the legislation from a court which will invalidate the contract.

The recent Hammersmith v. Fulham case in the United Kingdom is an example of that. In that case the court found that the relevant legislation did not provide the
Page 5495
government body with the authority to enter into the project. Because of that decision bankers and financiers must be completely satisfied that the government authority - in this case the Water Board - is acting lawfully and consistently under the empowering legislation. In addition to ensuring the validity of such a contract between the Water Board and the private sector, provision is made for the contractor to benefit from various tax incentives. Only large and expensive projects provide the necessary guaranteed return and appropriate tax incentives to attract private investors. As the projects are large, companies may require guarantees from the State of the Water Board's obligations under the contract. The amendments in the bill are designed to remove any doubt as to the capacity of the Water Board to enter into arrangements with private contractors. The Minister for Housing may express surprise that the Opposition is prepared to work with the Government to facilitate the establishment of proper arrangements with private contractors.

Mr Merton: That is a change of heart.

Ms ALLAN: It is a amazing that the honourable member for Baulkham Hills is still able to use his voice after his inane interjections last night. He claims the Opposition has had a change of heart. It has not had a change of heart. The Opposition supports proper attempts to implement rational practices in the Water Board. The Opposition is not interested in rorts, abuse and misuse of private contractors. We are interested in and committed to establishing proper standards so that appropriate arrangements are entered into with private contractors. The bill amends section 12 of the Water Board Act 1987 to clarify the power of the board to enter into contracts. We all know what the Water Board has been up to but contracts must now be properly entered into. The Labor Party supports the additional qualification requiring ministerial approval before the board enters into a contract. Even if a weak Minister is responsible for the Water Board, as is the case at present, ministerial approval is still necessary.

Mr Morris: Get off!

Ms ALLAN: The honourable member for Blue Mountains is becoming outraged. A totally unnecessary $100 million tunnel is being constructed in the Water Board area of the Blue Mountains because the Minister has not been prepared -

[Interruption]

Mr SPEAKER: Order! I call the honourable member for Blue Mountains to order.

Ms ALLAN: I am keen for the honourable member for Blue Mountains to participate in the debate. We read a lot in the Blue Mountains Gazette about his commitment to facilitating the delivery of water services to the Blue Mountains. However, he contributes very little to debate, apart from a few inane interjections. A tunnel is being constructed in the Blue Mountains area which would not have been needed if innovative technology had been applied.

[Interruption]

Mr SPEAKER: Order! I call the honourable member for Blue Mountains to order for the second time.

Ms ALLAN: I am looking forward to the honourable member for Blue Mountains participating in the debate. If an innovative approach had been taken by the Water Board, funds which have been misspent on a tunnel in the Blue Mountains, which
Page 5496
will probably be unnecessary in the long run and will not provide the promised solutions, would not have been expended.


Mr Morris: What would you know?


Ms ALLAN: There he goes again. Interjections such as that are the reason the Opposition wants the honourable member for Blue Mountains to contribute to the debate and demonstrate that he is able to string more than two sentences together. Section 13 of the Water Board Act ensures that the board has the power to contract out its functions to private contractors. The present provisions contained in section 13 prohibit parties such as contractors from exercising the powers of the board. The amendments to section 13 will ensure that these provisions do not affect private contractors to whom the board has contracted out the provision of its services. The Water Board Act gives the board power to enter land to carry out its services. It can also break up roads, sewers and drains. In those circumstances the board must adequately compensate for any damages done during the performance of its functions. The bill amends sections 15 and 17 of the Act to confer these obligations on private contractors. The contractors will be allowed to enter premises and break up roads only if they are providing the services they have been contracted to perform. The board will remain liable for compensation and costs for damages caused by a private contractor while exercising these powers. However, under the contractual arrangements the board can recover these costs.


The Opposition is constantly concerned about the ability of the Minister for Housing. In particular we are concerned about his ability to enforce the contractual arrangements. Ultimately it will be the Minister's responsibility to ensure that the Government is not short changed and that private citizens are compensated. Section 55 of the Act provides for the forced acquisition of land. When land is acquired it can be transferred to a private contractor to construct, maintain and operate various works. The Opposition supports the need for ministerial approval for the compulsory acquisition of land. The Minister must ensure that the land is used only for the purpose of fulfilling the contract and not for other commercial gains. Resources for the provision of infrastructure are provided at present by user-pays charges such as pollution fees or funding through operating revenue or taxes. The alternatives to private sector investment in infrastructure are increased taxes and charges or increased debt. Despite the Government's talk about large pollution fines, little revenue has been raised.


The Government is so embarrassed about the lack of revenue raised that the Minister for the Environment, the Minister formerly responsible for the Water Board and the colleague of the Minister for Housing, did not have the courage to table in Parliament the latest report from the State Pollution Control Commission. He sneaked up behind the desk and handed it to the Clerk. That report confirmed what I have just said, namely, that the Government has not been able to obtain the money it promised it would receive from the million-dollar fines under the Environmental Offences and Penalties Act. The Government's commitment to financing through the user-pays system seems to stop when it comes to the big polluters. Revenue from fines and fees will not raise the funds required to ensure that the necessary works are carried out. Those comments lead me to the interesting question of why the Water Board has been unable to expend the money it is receiving from the present environmental levy. Perhaps this legislation will facilitate that process. The Opposition is right behind the Government's attempts to expend the funds it is collecting from Water Board ratepayers on important environmental protection works. The Opposition would love to see the Government spend the money and not merely sit on it while it earns interest.

Page 5497

Mr Schipp: You are very economical with the truth.

Ms ALLAN: The Minister cannot even use the right word. It is "economic". The Minister alleges I am very economical. The Minister should look at my household budgeting and my housekeeping talents. I am very economical. The Minister should undertake one of the literacy courses the senior managers at the Water Board have been sent to.

Mr McManus: And speed reading.

Ms ALLAN: And speed reading. The Minister should undertake the literacy, numeracy and speed reading courses that the senior managers at the Water Board are being sent off to do instead of employing consultants which cost the Water Board ratepayers a huge whack. If he did that, perhaps he would be able to speak properly. The Government's preferred option is to pass the increase on to ordinary families through increased taxes and charges. It prefers to do that rather than to use the money that has already been collected. The Government's habitual financing - it is like a drug addition - of its waste and mismanagement through increased taxes and charges is not acceptable to the Opposition. The Opposition has estimated that from 1988 to 1991 the average increase in household water bills was a massive $168. This financial year average families suffered a further $20 increase. This came in the form of average household water charge increases of 5.2 per cent immediately after the May 1991 election. Despite a bogus election pledge by the Premier, the increase was higher than the consumer price index. Despite this legislation, the Water Board has already forecast a dramatic increase in charges when the economy improves. According to the board, this increase is needed to fund future capital works projects. The Labor Party will ensure that the provision of infrastructure is maintained but that it will not be paid for by bumping up the cost of water every couple of months. Capital works should be funded within departmental budgets or through the private contribution that this Act facilitates.

There is evidence that the State Government has cash reserves for Water Board projects. The Water Board estimates it will collect more than $400 million in trade waste charges from industry, but because of this Government's mismanagement the funds will remain idle in bank accounts, attracting only a nominal rate of interest. The Minister must assure the House that the contracting of infrastructure and services to private contractors will not result in increased prices. One does not have to be a genius to realise that the Minister, in his reply on the second reading, will not be able to give that assurance. It is his responsibility to keep the prices at a reasonable and satisfactory level. The Labor Party warns the Minister that this bill is not a licence to replace existing Water Board employees with contractors, even though the Minister loves contractors. This is not a licence to do that. It should go without saying that a government that has already broken more than 200 promises since it came to office in March 1988 would think nothing of sacking workers in a secretive and sly fashion. I note that the Opposition has consulted with the relevant union, the Australian Services Union, in relation to the import of the bill. Though the union has some criticisms of the bill, it is prepared to give its support to the Government.

The union is appreciative that the Government has given a commitment - or certainly the Water Board management has given a commitment - that the work force employed by private companies on long-term contractual arrangements will be able to enjoy union coverage. That is a proper commitment from the Water Board. I request that the Minister assure the House that contractors will be used to provide new infrastructure and services and not to replace existing jobs. Massive downsizing has
Page 5498
already occurred within the Water Board. This is not an opportunity for that to continue just for the sake of it. The Opposition agrees with the need to involve the private sector in the provision of infrastructure. At the same time it rejects the funding of further projects through increased taxes and charges and increased debt. The Opposition will support the passage of this bill through the House. It does so not because of the eloquence of the Minister for Housing but because the bill is a step towards allowing private sector input into the Water Board's infrastructure in the hope that it will allow for a considerable and desirable improvement in the provision of services to consumers and increased environmental awareness.

Mr MERTON (Baulkham Hills) [9.55]: I support this legislation because I believe it is a very important step for the people of New South Wales, for whom the Water Board carries on vital activities. If Sydney's expansion over the next 20 years occurs at the anticipated rate, it will be difficult for the Water Board to supply the necessary water and sewerage infrastructure for that growth in economic terms and within the time constraints imposed by the need to avoid possible environmental degradation. It will also be difficult to provide drinking water of an acceptable quality to the community. Sydney's drinking water is among the best in the world and has an international reputation as safe water. Unfortunately it is becoming increasingly difficult to meet consumer demands for higher standards. The Government understands that and has no problem with those demands being imposed by consumers. The Water Board's large capital expenditure program of approximately $12 billion over the next 20 years can provide these essential services, but that will be at the expense of other necessary works. These works must be accorded a priority which reflects their urgency but not necessarily their importance. The reality is, whether we like it or not, community demand is for the urban sprawl to continue. There are always people who want homes on parcels of land as opposed to medium-density development.

Ms Allan: Especially in your electorate.

Mr MERTON: I will deal with that later, and I thank the honourable member for reminding me of it. These situations could be alleviated if the Water Board could count on long-term private sector involvement to relieve it of some of the up-front financial and administrative burdens as a result of the demands of its stakeholders and customers. The flow-on effect of such private sector involvement will be that the Water Board could implement further microeconomic reforms and that will lessen the burden on public funds and lead to more realistic price setting mechanisms. Other advantages of private sector involvement include the financial saving that will result from increased efficiencies in an internationally competitive market; the opening up of avenues for new technology; and the opportunities to utilise new management skills and operating procedures. I should like to emphasise that the Sydney Water Board and its private sector partners, most of whom are to some degree Australian companies, are world leaders in investigation into innovative technologies for sewage treatment. I need only mention the innovative approach of Australian companies such as Memtec with its membrane filter system and the BHP consortium with its magnetite proposals to illustrate that Australian companies are at the forefront of significant scientific breakthrough in the capture, disposal and treatment of sewage.

Unfortunately in the water treatment area Australian technology has not developed the expertise and innovative practices sufficient to cope with ever increasing demands for increasingly higher standards from Water Board consumers. Consequently the board is taking the approach - and this Government believes it is the most cost-effective approach - of using technologies developed overseas. Why duplicate the effort
Page 5499
and spend money unnecessarily? I wish to add that these technologies are being refined by both the Water Board and the private sector to be more suitable for Australian conditions. I emphasise the point made earlier by the Minister for Housing that the Water Board will take full responsibility for the services provided to customers through the use of the private sector. It is not opting out of its essential responsibility and it will assume and retain overall control and responsibility for the provision of services. All private sector infrastructure proposals involving construction, ownership and operation will first require the approval of the Minister. Contrary to what was said by the honourable member the Blacktown, the Minister is indeed competent, is well aware of the problems, and has done an outstanding job for the Water Board during his short term in office.

Mr Schipp: I agree.

Mr MERTON: The Minister agrees. It is essential that he does agree and that might be noted. There will be no lessening of responsibility on the part of the Water Board. There is no contemplation of the Sydney Water Board not being ultimately responsible for the quality of water, waste water, and stormwater services provided to its stakeholders and customers. The residents and future residents of Sydney, the Illawarra and the Blue Mountains can be assured that their interests are being protected.

Mr McManus: Do not mention the Illawarra; it is a disgrace.

Mr MERTON: The honourable member is a disgrace, not the Illawarra. Major projects which at present involve the private sector to some degree include the Water Board's drinking water quality program, the Rouse Hill urban development project and the Blue Mountains sewage transfer scheme. The honourable member for Blue Mountains, who is an outstanding man for that area, will speak about the Blue Mountains transfer scheme. The honourable member for Blacktown does not like my saying that. The honourable member for Blue Mountains beat the Labor candidate in 1988. Labor thought it would win back the seat in 1991. Again the result was a disaster for Labor because the people of the Blue Mountains knew they had a good member and they rejected the Labor candidate. The honourable member for Blue Mountains even beat a Labor Minister, who was a disaster. The people of the electorate have made a very wise choice in the present member. With regard to the drinking water quality program, water treatment plants are to be constructed at Woronora, Avon, Macarthur and Prospect. I am certain that the members who represent those areas will be very pleased about those programs because they have a genuine concern for their constituents. The Government is taking positive steps to improve the quality of water in those areas, which cover the major part of the metropolitan area. A particular advantage of the new water plant at Woronora - I would imagine some honourable members opposite would be interested in Woronora - is that people in the electorates of Miranda, Bulli, Cronulla and Sutherland will benefit. It is very good to see the honourable member for Bulli here this morning. I give him the good news that the new water treatment plant at Woronora will improve drinking water standards in his electorate.

Mr McManus: I will tell you all about Woronora and the filthy water at Engadine that this character, the Minister, cannot clean up.

Mr MERTON: The honourable member is objecting now but I am certain that he does not mean what he says. This is often the case with him. Woronora, Avon and Macarthur will also have trunk mains, tunnels and pumping stations constructed. The Water Board systems currently supply an average of 1,900 megalitres of water per day.
Page 5500
Their peak capacity at the moment is approximately 3,500 megalitres per day. It is estimated that with the new plants the capacity will be increased to 3,660 megalitres per day by 1998 and 5,220 megalitres a day by the year 2020. The four plants will then be supplying 95 per cent of Sydney's total water. The benefits of these new water treatment plants will be enormous but their estimated costs are just as great. This is why this legislation has been introduced. It will enable the private sector to be involved in contractual arrangements with the Water Board without the possibility of any ultra vires action being launched and the contracts being found to be defective because of a lack of contractual capacity of the Water Board.

The Prospect plant will cost about $285 million, Woronora about $44 million, Avon about $85 million, and Macarthur about $132 million - a total of about $550 million. This Government is all about providing better services for the people and using private sector involvement. This is a typical example of the progressive microeconomic reform that the Greiner Government has embarked upon since it came to office in 1988. When expression of interests were circulated amongst the private sector for involvement in the construction of these plants 17 consortia applied and five have been short listed. It is anticipated that detailed tender proposals will be submitted by the consortia by May 1992. It is hoped that Avon, Macarthur and Woronora will be commissioned by late 1994 and Prospect by 1998 - well in time to cope with Sydney's expected expansion. I now turn to an area very dear to my heart. I understand that the honourable member for Blacktown recently attended a meeting at Castle Hill. I think one of the organisers of the meeting was the former campaign director for my opponent at the last State election, Mr Bert Hersch. Unfortunately he did not invite me to the meeting. I understand that as well as the honourable member for Blacktown he invited the honourable member for Londonderry, who is a constituent of mine: he lives at Winston Hills. One or two other notables who shall remain nameless attended the meeting.

Mr Schipp: You cannot select your constituents.

Mr MERTON: That is right. The honourable member for Londonderry made a very wise choice. The member for Blacktown has been in the Rouse Hill area beating the drum and whipping up the people. Those who attended the meeting who were not involved in the ALP and the people who did not come from Doonside and Blacktown - of course Doonside has very little to do with Castle Hill, but that is another issue -

Ms Allan: Snob.

Mr MERTON: That is not true. I have a very high regard for the people of Doonside. My point is simply that the people from Doonside would not have an active involvement in the northwest sector; neither would they have an active involvement in what happens about transport in The Hills. People at the meeting were complaining about transport in The Hills. I understand that the honourable member for Blacktown is on record in this Chamber as opposing the F2 expressway, which is a vital part of the transport system for The Hills.

Mr McManus: On a point of order. The honourable member is straying from the bill by speaking on transport issues when he should be talking about the Water Board. I would ask you to draw him back into line.

Mr SPEAKER: Order! The honourable member for Baulkham Hills is straying somewhat from the leave of the bill. Whilst he may make passing reference to other matters, I ask him to direct his attention back to the bill.

Page 5501

Mr MERTON: Mr Speaker, I do not intend to pursue that subject and I accept your ruling. In relation to the Rouse Hill northwest sector, this legislation will allow a consortium of private landowners in the Rouse Hill development area initially to fund and project manage the provision of infrastructure to the area. This will relieve the Water Board of the financial burden of servicing an area which may not be developed for many years and on which costs cannot be recouped until then. It will probably take 30 years for the northwest sector to be fully developed. People are talking about instant schools, instant kindergartens and instant facilities there.

Mr McManus: You promised them all that at the last election.

Mr MERTON: They will be there when the people are there.

Ms Allan: Rubbish!

Mr MERTON: Just wait and see. It serves the honourable member's purpose to say that. The Rouse Hill consortium, because of its vested interest, will ensure that the area is developed and sold and the costs are recovered quickly. The Water Board will then buy back the infrastructure over a number of years. It should be noted by honourable members that the consortia involved in all these proposals contain a significant number of Australian companies, usually as the senior partner. I shall mention the name of some companies, which honourable members will easily recognise - Theiss Watkins, Transfield, Snowy Mountains Engineering Corporation, CRI, Kinhill, Lend Lease, Civil and Civic - to demonstrate the faith that major Australian companies have in the Government's innovative infrastructure, management and operation proposals. Their continued involvement is, however, largely dependent upon the passage of these amendments to the Water Board legislation. In fairness to the Opposition I note that it accepts the amendments. Private sector involvement in these types of major projects is the only practicable way of realising them in a timely and cost-effective manner. It should be clearly understood that these major projects, which have a long time frame of up to 50 years, will go ahead only with these amendments.

The private sector needs specific legislative assurance that the board is permitted to contract out both construction and other activities including operation, maintenance, the transfer of water and wastewater, the ownership of facilities and the like. The private sector needs to have such necessary long-term contractual arrangements guaranteed by legislation because of the enormous amount of money involved, which can make these ventures seem risky propositions. This legislation is not a backdoor way of privatisation of the Water Board. The board will remain the overseeing authority. The regulations and standards governing water and wastewater transfer and treatment set by Government authorities will not be diminished. As the Minister explained, the board remains primarily liable for payment of compensation and the cost of rectification of damage ensuing from a private contractor's exercise of those powers in cases in which compensation would be payable if the same work were done by the Water Board. This legislation is a positive step. It is essential when people are putting enormous amounts of capital at risk that they know that they can contract with the Water Board with certainty and in the knowledge that they will have no problems later should any dispute arise as to the contractual validity of the matter.

Mr SPEAKER: Order! The honourable member's time for speaking has expired.

Mr McMANUS (Bulli) [10.10]: I support the stand taken by the Opposition on this bill. What was made clear during debate on other legislation brought forward
Page 5502
recently by the Minister for Housing is being made clear here: this is an attempt to do to the Sydney Water Board what was done within the past 24 hours to the Hunter Water Board. I wish to comment on the statement made by the honourable member for Baulkham Hills that this bill would be a means of relieving the administrative burdens of the Water Board. The administrative burden is one that is now borne by the lower sectors. The Minister has increased administrative jobs in the Water Board while deliberately winding down jobs in the lower sector - the maintenance and plumbing and trade waste sectors. Anyone with half a brain who has picked up the job detail of the Sydney Water Board in recent years would have seen that the jobs of people who were being paid in the vicinity of $24,000 and $30,000 a year have been wound down. People in those Water Board jobs have been replaced by highly salaried officers from the administrative sector - anything from managers to project officers - when the Minister tells this House that the Government is running out of money.


It is not difficult to work out exactly what is happening. The Government has done away with jobs paying $24,000 and replaced them with $40,000 or $60,000 jobs. It is no wonder that the Government is in dire financial straits in funding the Water Board. If, as the honourable member for Baulkham Hills has said, the Government is really serious about relieving itself of its administrative burdens, it should weigh carefully what it is doing. If the Government really wants a service industry in the Water Board it should start employing the people who really matter. The Government should stop trying to cover its tail by employing people who have expertise in writing up reports. Basically, that is what it is all about. The Government should stop employing people who put jargon and rhetoric on glossy paper that goes into letterboxes all over this State.


Ms Allan: Joe loves the pictures.


Mr McMANUS: The Minister loves the pictures. The water rates paid by New South Wales taxpayers are going towards the cost of printing glossy pamphlets. The other night I said in debate on the Hunter region - and I say it again now - that this Government has been successful in turning an efficient service industry into a pathetic advertising agency. The Government will continue along that path and, at the same time, it will pay people $60,000 or $80,000 a year to ensure that its tail is covered. Earlier today the Opposition shadow minister told the House that this Minister is totally incapable, incompetent, unable to do the job required of him as Minister responsible for the Water Board. The honourable member for Baulkham Hills referred to Memtec. It is amazing that it took more than two years before this Minister decided to give Memtec a contract to clean the waste products of the Water Board.


Why did it take a Liberal State government two years to decide that Memtec is a great organisation when one year before people from Germany were saying the same thing? Once again we see the total incompetence of this Government and this Minister. We almost lost a company that was prepared to provide jobs and a safer environment for Water Board activities. It took 48 months for this Government to realise that, during which time the rest of the world, Japan included, was keen to obtain the services of that company. Does this Government have a problem? Are some government bureaucrats worried about their jobs and, therefore, giving the Government misinformation? Is the Government not able to think for itself? The Minister has been given a responsible portfolio by the people of New South Wales to make decisions for the benefit of New South Wales. Why has it taken this Government two years to come to a conclusion reached many months before by the rest of the world? The honourable member for Baulkham Hills is not able to speak competently about Memtec. This bill is designed for
Page 5503
one thing, that is, the continual winding down of jobs within the lower echelons of the Water Board.

I wish now to speak about the ranks from which I came. I spent 14 years with the Water Board. I did not start as an administrative officer on $40,000 or $80,000 a year but started as a maintenance man earning $5,000 a year. During that time I rose proudly to the ranks of senior inspector and was responsible for the conservation of water and for trade waste matters and for protecting people's rights. I tried to ensure that the government of the day kept rates down. But what has been happening in the past four years? Inspectors in the wastewater branch - a branch for which I had responsibility - have been wound down from 41 to about 10. One of the tasks of the wastewater branch is to detect faults within water mains and electricity cables. The inspectors that remain in the wastewater branch of the Water Board are now responsible for training people to detect faults in water mains and electricity cables - a very dangerous practice. The Minister will rue the day if one of these inexperienced people strikes a 33kV cable and kills either himself or half the staff. The Minister will be held responsible if that were to occur.

The Government does not understand that certain expertise is needed in the Water Board. The Government is prepared to wind down these positions and to put on contractors. A similar thing is happening in the trade waste sector. The Government is deliberately reducing the number of trade waste inspectors. This is what will occur in the Hunter region. These inspectors have been responsible for protecting the environment and conserving water for the last 100 years. The Minister has now decided to employ inexperienced people and, once again, he has covered himself by employing people to prepare lengthy reports. This is a dangerous practice. The Minister will rue the day if fats and oils appear on our beaches merely because we have lost expertise and no one knows how to solve the problems. Self-regulation will not solve the problem. The Government seems to believe that every businessman is honest. I can say with authority because of my previous experience on the Water Board that the majority of people in the community will try to get away with whatever they can. The Water Board needs a stringent method of policing to ensure that regulations set by the Government are enforced at all times. It is no good cutting costs by doing away with people who have the expertise to carry out this policing.

The honourable member for Baulkham Hills referred with glee to the environmental levy. He talked at length about the Woronora River, which is in my electorate. I will tell the honourable member about the four-year plan for the Woronora River. This Government refused to allocate money for that plan and thus caused major water problems in the Engadine-Waterfall-Heathcote regions. I have received from the $80,000 a year people in the Water Board the sort of rhetoric that I would expect. They have said that there is a pH value problem in Woronora Dam. That may be correct to some degree but, as I worked at the Engadine tanks for six years I can tell honourable members that the problem lies in the distributor main from Woronora Dam to Sutherland shire. Some incompetent people put an overabundance of lime into the 48-inch distributor main and these reticulation mains are all lying in the Heathcote-Engadine region. The other day, after I had had a meeting with the officer second in charge of the Rockdale region, I was told that this problem is being solved with sponges. I have had a look at the work that has been done in the Engadine-Heathcote-Waterfall regions. The Government needs to employ more people. It should employ people with expertise to clean out the mains.

Mr Morris: You should go down and sort them out.

Page 5504

Mr McMANUS: I could go back and do a better job. As a matter of fact, I am doing a better job in this Parliament than honourable members opposite are doing. The Minister should give the people in my electorate immediate relief. He should send in sufficient workers to cover the work instead of issuing press releases stating what he is doing. Why does not the Minister expend money on cleaning out the small drains that are covered in lime? Mothers have to rewash their babies' clothing and when they ask for a mere pittance of relief, the Minister cuts their compensation. Those people are forced to fight the Water Board's legal system. After washing, their babies' nappies are still filthy, their towels cannot be used and their husbands must go to work with dirty shirts.

Mr Merton: On a point of order.

Ms Allan: Has the honourable member got a dirty nappy?

[Interruption]

Mr SPEAKER: Order! I call the honourable member for Blacktown to order.

Mr Merton: The honourable member for Bulli has drifted downstream from this legislation. He is now dealing with dirty nappies, shirts and so on, which do not have any bearing on the legislation. The bill is quite specific in its nature. I ask that the honourable member be brought back to the scope of the bill.

Mr McManus: On the point of order. My explanation of these matters is intended to show clearly to the Minister that, if he employs contractors, these service problems will be exacerbated.

Mr SPEAKER: Order! Previously I upheld a point of order which restricted statements being made by the honourable member for Baulkham Hills, on the basis that the amending bill was very specific. Having cast the debate in that mould I have little option but to warn the honourable member for Bulli that he should not stray from the leave of the bill. Having made passing reference to the effects he believes may occur from the employment of contractors, he should come back to the essence of the employment of contractors, which is the substance of the bill.

Mr McMANUS: I respect your ruling, Mr Speaker.

[Extension of time agreed to.]

The introduction of contractors into the Water Board system will cause a series of problems, one of which I have just explained to the Minister. Concern has been expressed about the previous employment of contractors within the Water Board system. Unless we have a stringent governmental policing system, which is missing in this bill, there will be some detrimental effects, and one of those effects is corruption. During this debate I have made it clear to the Minister that for the two years that I have been trying to warn him about companies like Suresearch -

Mr Schipp: I have had this portfolio for a mere five months.

Mr McMANUS: You took it from your predecessor. Concerns have been placed before the Parliament for two years but the Minister will not give me an answer about a corruption allegation within the Water Board, within his own portfolio. When
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will the Minister give me an answer about when this corruption took place? Suresearch is an organisation that is taking bribes from people, but the Minister will not take any action, will not give an answer to a member of Parliament. This is a dangerous precedent. If contract arrangements are not watched carefully by government, corruption will reach epidemic proportions. At present there is no control over private contractors. How will the Government recoup compensation from small companies that gain tenders? The Minister has often said that small businesses are going broke. If contractors are employed and something goes wrong, as my experience in the Water Board tells me it will inevitably, the Government will be responsible. Say, for example, a contractor was employed to install a main and 12 months later the Water Board finds the main is seriously defective, the Water Board will be forced to take legal action. However, at present with the amount of small business bankruptcies its chances of finding that same company still viable are limited. Who will the Government sue?


Mr Schipp: The Federal Labor Party, for what it has done to the economy.


Mr McMANUS: Never mind the Federal Labor Party. The State Government sold off its real estate at the wrong time. It flogged off the family kitchenware at the wrong time. Government members made a major blunder, yet all they can do is whinge about the Federal Government. They were elected to this Parliament to run a financially viable government and they have failed dismally. Who will pay the compensation if the contractors go broke? It will be the people that the Government claims gave it all its mandates. Honourable members know that a certain percentage of these companies will go down the gurgler and the people who will have to pay for the damages caused by contractors who have gone broke, gone out of business, changed their names, gone into liquidation or bankruptcy -


Mr Merton: The honourable member is merely knocking small business.


Mr McMANUS: I am saying that this Government is responsible for small business going broke. One of my constituents in Wollongong has bad debts amounting to $60,000 because small business has gone broke yet all the Minister can do is blame the Federal Government.


Mr Schipp: The State Labor Party is broke.


Mr McMANUS: Let us get back to the crux of the matter. The Minister should be giving us the answers. If the Minister is to be responsible for taking legal action against these companies, let us hear him explain how he will recoup this financial burden or at least deny that it will not be the people of New South Wales who will ultimately pay the bill for the incompetence of this Government.

[Interruption]

Mr SPEAKER: Order! I call the honourable member for Baulkham Hills to order.

Mr McMANUS: I turn now to the environmental levy. The Minister has stashed away millions of dollars - as he did with the Department of Housing funds when he sold off housing stock and put the money in the bank to gain interest.


Mr Schipp: No, it is in my pocket. I have got it in my pocket.

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Mr McMANUS: You are saying that. If the Minister is corrupt it is not my fault.

Mr Schipp: No, I have been living on the fat of the land.

Mr McMANUS: I thank the Minister for making that admission to the House. The situation is that the Minister pulled the same stunt with housing. He sold off public housing while people waited for back doors and he now has the same system going with the Water Board. He is gathering money from this State - almost illegally taking money - and putting it into the bank. He has looked after his mates. The honourable member for Blue Mountains received something like $34 million this year for his electorate yet the people of the Illawarra received only $1.4 million. Garbage is floating off Bellambi Beach. At the pollution summit in Sydney it was emphasised that the Illawarra has problems with its own sewerage outfall, and with the Sydney sewerage outfall when something goes wrong. Once again the argument is about trade waste. It will be impossible to control the garbage going to the southern beaches if the Water Board does not employ people with the expertise to carry out the job of prevention. The Minister should use some common sense. The matter was debated at length yesterday but nothing has got through to the Minister. A proper policing force must be maintained within the Water Board. The problem seems to be that under this new arrangement in government, because the Independents have some influence, the Labor-held areas seem to be singled out adversely. It concerns me that the Illawarra region received only $1.4 million as a return from its environmental levy -

Mr Schipp: $12 million as of June 1991.

Mr SPEAKER: Order! The Minister will have an opportunity to reply later in the debate.

Mr McMANUS: The Minister will have his opportunity. However, he will not reply, because that is his problem. I have informed him about corruption problems within the Water Board and the hiding of millions of dollars of the environmental levy, which is needed to undertake works in the Illawarra region. I have no qualms about funding being allocated to the Blue Mountains. As a former Water Board inspector I worked in the Blue Mountains and I am aware of the problems there. However, the honourable member for Blue Mountains should not be entitled, simply because he is a member of the Government, to have his electorate allocated a multitude of dollars. Water and drainage services in the Illawarra are just as poor as those in the Blue Mountains, and there should be a fair sharing of the financial cake. The Minister should understand that funds should be allocated to electorates on a needs basis rather than on a political basis, as seems to be the Government's criterion. That shows its incompetence.

Mr MORRIS (Blue Mountains) [10.30]: The Blue Mountains is a beautiful and unique area, but unfortunately it was neglected during the 12 years of Labor Government. Labor published a pretty green book and said that within 25 years it would fix the ills of my area. The coalition Government, on the other hand, will have achieved much of that by 1996. Blue Mountains rivers and streams suffer from extensive and unacceptable levels of pollution which ultimately impact upon the amenity of the area and the Hawkesbury-Nepean river system. Major causes of this pollution are the antiquated water and sewerage supply systems in the Blue Mountains area. That is the result of years of neglect by the previous Labor Government and local administrations. To alleviate these problems the Water Board, which assumed responsibility for the Blue Mountains supply in July 1980, has embarked upon a comprehensive rehabilitation
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program for the area. The program includes in part a new sewage treatment strategy that comprises a detailed and lengthy list of necessary projects. The projects include an investigation into closing six existing run-down sewage treatment plants, which are very old; upgrading other sewage treatment plants, including the main regional sewage treatment plant at Winmalee; the transfer of sewage from areas above Springwood by tunnel to Winmalee sewage treatment plant, bypassing outdated plants; and the installation at the Winmalee sewage treatment plant of full treatment and nutrient removal facilities.

Other rehabilitation works include the alleviation of sewer overflows, the repair of older sewers, the provision of new sewerage connections, the identification and rectification of illegal sewer connections by the Water Board's infiltration-inflow program, and a trial microphytes bed stormwater treatment program at Katoomba. That program is mind-boggling. When the Government was elected the former Minister, the Hon. Tim Moore, expedited that work. Recently I inspected the plant with local residents, and its effect on preventing erosion and so on has to be seen to be believed. Another rehabilitation project is the lining of unlined water mains. When the Government was elected the water pressure at Mount Victoria was very poor, to say the least. The Government has spent about $4.5 million on installing new mains. A new reservoir is on line, with construction to commence in about March or April of next year. Prior to the last election the Minister opened a pilot water treatment plant study at Grieves Creek. As a result, clean water is provided to Medlow Bath, Blackheath and Mount Victoria at a cost of about $6.5 million.

The honourable member for Bulli spoke about treatment plants. Recently with Memtec personnel I visited the treatment plant at Blackheath. The effluent being discharged into the Grosse River was an absolute disgrace; it had to be seen to be believed. Memtec has undertaken a number of trials and has now installed a plant that provides water that is as clear as the water in this glass I am holding. That is quite a change from the clarity of the water when the Government was first elected. The benefits of the Water Board's rehabilitation program will be enormous in an area that I regard as quite special. Unfortunately, so will the costs. Part of the cost will be met by the Water Board's special environmental program - SEP - which is an early action strategy paid for from the $80 levy on ratepayers, which is due to cut out in 1994. In addition the board has embarked upon a $6.5 billion, 20-year, clean waterways program. Some of the clean waterway projects have been allocated SEP funds. That is the case with the Winmalee tunnel. The SEP component of $60 million is only part of the total estimated cost of the tunnel project. A number of retired Snowy Mountains scheme engineers have described this tunnel as one of the wonders of the world. The remainder of the cost will have to come from the Water Board's capital expenditure program. For example, the 39-kilometre sewerage tunnel will cost $83 million and the upgrading of the Winmalee sewage treatment plant will cost $40 million.

Under this Government, 11 kilometres of the sewer tunnel from Winmalee to Faulconbridge is already in place, and the next section to Hazelbrook has been commenced. Just after the election I had the pleasure of having the Minister visit my electorate to launch the construction of that section of pipe. It is well ahead of schedule. On 10th October tenders closed for a private sector funding option for the remaining part of the sewer tunnel from Hazelbrook to Katoomba. Construction is planned to commence in March 1992 and tenders are now being evaluated. The tunnel will intercept Hazelbrook sewage treatment plant by the end of 1993, and treatment plants at Wentworth Falls, South Katoomba and North Katoomba by 1996. That is way ahead of Labor's schedule of 2010 as set out in its glossy green book - in fact 14 years earlier. The result will be that by the end of 1993 sewerage services will gradually be extended
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to Woodford and Linden. Urban runoff quality control and monitoring measures will cost a further $1 million. As tunnel construction proceeds, new sewerage connections will gradually become available at Winmalee, Faulconbridge, Wentworth Falls and Katoomba at a cost of $75 million. I understand that approximately 2,100 connections have been made already. By 1992, 50 kilometres of water mains will be lined at an estimated cost of $5 million. It will be obvious to honourable members that the cost of providing a clean and unpolluted environment in my electorate alone is enormous. The whole issue of financing and operating an infrastructure is complex. It includes providing the resources to install and maintain services without unduly burdening ratepayers, managing those services more efficiently and with more consumer satisfaction than there is at present, ensuring that the real cost of infrastructure is paid for, and taking environmental considerations into account.

Private sector involvement is the only way to ensure that the Water Board can effectively meet the pressure of providing these services and thereby ensure that the people of New South Wales benefit. Private sector involvement will also provide local and wider employment opportunities. The private sector will continue to provide the Water Board with much needed assistance through the contribution of physical, financial and technical resources. If the Water Board Act is not amended to make necessary provision for private sector involvement, the potential benefits from private sector participation in infrastructure provision could very well be lost. The private sector has to be assured that long-term contractual arrangements can legitimately be made, that they will be able to claim the tax benefits they are normally entitled to as part of any development, and that the enabling provisions of the Water Board Act are clear and unambiguous. If the Government can give the private sector these assurances, the rivers and streams of the Blue Mountains ultimately will benefit, as will the residents of the Blue Mountains and all other residents of the State. I support the bill.

Mr SCHIPP (Wagga Wagga), Minister for Housing [10.39], in reply: The temptation in reply would be to respond to all the invective, insults and personal attacks to which we have become accustomed from the Opposition. However, I shall say only that I appreciate the contributions made by three of the four members who participated in the debate. I refer to the honourable member for Blue Mountains, the honourable member for Baulkham Hills, and the honourable member for Blacktown with regard to those parts of her contribution that were relevant to the debate and her understanding of the Government's proposal. I thank her for her opening comment that the Opposition enthusiastically supports this legislation. This proposal will enable the Water Board to engage people of international standing. Officers of the Water Board will gain a better knowledge of other water systems throughout the world. The water delivery system in France was rather lacklustre, but over a period, as a result of the injection of private sector involvement, there have been some exciting advancements. I have been advised of similar advancements throughout the United Kingdom.

The contribution of the honourable member for Bulli was, as usual, insulting. It was typical of his performance in this Chamber. If I thought that he had any credibility either in this Parliament or the outside world, I would reply to the attacks he made on the Water Board. His allegations are unfounded - completely false. The Opposition is continuing with the big lie approach; it believes that if it tells lies often enough, people will begin to believe it. I thank honourable members from both sides of the House for their support of the legislation. The Independent members of the Parliament indicated their support in private discussions held between them and my advisers. The provisions will enable the board to finalise the rather large tenders that are in the system at the moment so far as water treatment is concerned. Though I thank
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honourable members for their support, I repeat that I did not appreciate the comments of the honourable member for Bulli. He just cannot help himself. I am sure that the people of New South Wales will sort him out in due course. I commend the bill.

Motion agreed to.

Bill read a second time and passed through remaining stages.