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Transcript of doorstop: Sydney: 5 August 2008: more water for Murray Darling Basin; Carbon Pollution Reduction Scheme.

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PW 152/08 5 August 2008




WONG: Well thanks very much for coming. What we’ve announced today is an intention to issue an open tender to purchase more water for the Murray Darling Basin. So we’re announcing that next month, we will issue an open tender to purchase water in Queensland. What we need to do in the Murray Darling Basin, across the Basin, is to do all we can to return water to the rivers. We are seriously up against it in the Murray Darling Basin.

When we were elected to Government, the two years to November 2007 were the lowest inflows in the River Murray on record. They were 43 per cent lower than the previous lows. What we know from the scientific studies which have been done is that in many catchments in the Murray Darling Basin, we are tracking at worse than the worst case climate change scenarios. In many catchments in the Murray Darling Basin we’re tracking at worse than the worst case climate change scenarios. That shows us how much we are up against it. But the Government is acting. We’ve established an historic agreement with the States and Territories for the first time to manage the Murray Darling Basin as a Basin. We’ve established the Murray Darling Basin Authority which will for the first time establish a Basin-wide plan and a Basin-wide cap, based on science. This is the first time this will happen in the nation’s history. But we’re not waiting for that plan to come into force. What we are doing is purchasing water entitlement. There are no easy solutions in the Murray Darling. What the Government is doing, is to act both in the short term and the long term to improve the health of the Basin. Happy to take questions.

QUESTION: New South Wales and Victoria have both expressed an interest in having the carbon market based in their states, do you have any views, any preferences ?

WONG: Well can I welcome the interest from both New South Wales and Victoria in hosting the carbon market. Obviously these are not decisions which have yet been made but it does emphasise that there are economic opportunities which will flow from the Carbon Pollution Reduction Scheme. This is a scheme that is about reducing Australia’s carbon pollution over time and it will also give an incentive to businesses to invest in cleaner energy options.

QUESTION: How confident can you be that Australian businesses can remain competitive while taking something of a lead on international industry ?

WONG: A couple of points about that. First we are not the first country to act. We know that the previous government failed to act on climate change for 12 years. We know that other countries such as Europe - the European Union which covers 27 nations - has had a carbon, an emissions trading scheme, for some time. We know New Zealand is implementing one. Japan has indicated it will commence a trial in October of this year. We know that there are regionally based schemes in

the United States and we also know that both presidential candidates in the current US elections have said they want to also reduce carbon pollution.

So the world is moving. We are very conscious, we are very conscious as a Government of the need to introduce this scheme responsibly. We put a range of measures in the Green Paper, our discussion paper on this Carbon Pollution Reduction Scheme, to assist business making that transition. But I would make this point: we know that in the future the market will place a premium on those goods and services which are low carbon. And what we as an economy can do, is over time develop the competitive advantage of having the technologies, of having the services and goods which are low carbon.

QUESTION: Do you know if the water announcement come as a direct result of [inaudible] ?

WONG: No. This is what the Government said we would do before the election. We said we would bring forward water purchasing and that’s what we’re doing. We allocated money in this year’s Budget for water purchase not only in the last financial year, but in this financial year and in subsequent years. And during the Budget we announced our $12.9 billion dollars investment in water which included over $3 billion dollars in water purchase. So we are simply rolling out the water purchase program as we were elected to do and as we committed to do prior to the election.

QUESTION: Has the Government gone to purchase the cheaper allocations as suggested?

WONG: Look we’re purchasing entitlements - well start from the beginning. Across the Basin in the first purchase, the $50 million dollars, we purchased entitlement across the Basin. I’d make the point we actually purchased high security water as well as generally, general security and low security water. So we did purchase, contrary to what some media reports suggest, high security water in the Murray. What we did do was assess the offers put to us by sellers on the basis of value for money which included an assessment of their, of how environmentally valuable they would be. So we’ll approach this new purchase in the same way. What we are doing, is doing what we said we would do.

QUESTION: What factors will the Government consider in where the carbon markets are going to be based ?

WONG: Oh look those decisions will be decisions made down the track and also will be decisions made by the market. But as I said, I welcome the interest in this and demonstrates that there are opportunities to be had as Australia moves to tackle climate change.

QUESTION: Earlier this week the Australian Institute predicted that state and territories for example could lose $1.4 billion through the ETS. What message do you have for state and also local government ?

WONG: Well what I would say is this. We’ve put a Green Paper out there, a paper which sets out the government’s proposals for what is a very substantial economic reform. We’ve asked the community including different levels of government for their views and we look forward to receiving them. So we’ll certainly consult with the community as we have until now. We’ll certainly consult with different levels of government as we have till now. But I think all of us understand that there isn’t a menu of easy options when it comes to tackling climate change. This is a substantial economic reform.

QUESTION: Minister there has been some indications leaked from government that the LNG industry might get some concessions? How might that sit inside your Green Paper proposals because under those proposals they don’t actually qualify as emissions intensive?

WONG: The threshold and the criteria for emissions-intensive trade-exposed are things we put out there in the Green Paper. But let’s understand what we’re seeking to do. We put out a set of propositions to the Australian community including Australian industry about how we will design the Carbon Pollution Reduction Scheme and how assistance for industry should be structured. Now we welcome discussion and dialogue about that. But what is important is this: the Government has to be guided in the design of the scheme by what is in the national interest. We have to strike the right balance and that’s what we will keep focused on through this process.

QUESTION: [inaudible] Premiers confirmed that NSW Treasury is doing some modelling of the Federal Government’s Green Paper. Do you have any message for him given he’s about to partially privatise the State’s electricity assets ?

WONG: No well those are matters for the Premier. In terms of economic modelling, we’ve said very clearly there is one of the largest economic modelling exercises in Australia’s history being undertaken by the Australian Treasury. The Government will release that when that modelling is completed which we’d anticipate to be in October. And the reason we’re undertaking that modelling is because we do very clearly understand the need to act responsibly when it comes to implementing the Carbon Pollution Reduction Scheme.

Thanks very much.