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Transcript of press conference: Murray-Darling Basin Ministerial Council Meeting, Rydges Lakeside, Canberra: 14 November 2008: Murray-Darling Baisn; climate change; Lower Lakes; water trading; Carbon Pollution Reduction Scheme.

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PW 234/08 14 November 2008 TRANSCRIPT OF PRESS CONFERENCE: MURRAY-DARLING BASIN MINISTERIAL COUNCIL MEETING, RYDGES LAKESIDE CANBERRA SUBJECT: MURRAY-DARLING BASIN; CLIMATE CHANGE; LOWER LAKES; WATER TRADING; CARBON POLLUTION REDUCTION SCHEME E & O E - PROOF ONLY WONG: Thank you very much for coming. We’ve just finalised the 46th meeting of the Murray-Darling Basin Ministerial Council. And there are a number of matters which Council considered today. And I wanted to start first with just showing you where we are in terms of inflows into the River Murray. This is a chart which was part of the report to Council today from the Murray-Darling Basin Commission, which I thought would be useful for you to see. That top dark line is the long-term average in terms of inflows into the River Murray. The very bottom black line was the worst, lowest on record, which was of course 06-07, and the bright red line is where we are in 2008-09. So we had marginally better inflows in September-October but we are now trending down towards the worst-case scenario and the advice provided by the Commission is that we are heading in November and December - on the basis of the weather projections - the inflow projections to a worst case scenario - close to the worst case scenario. So that gives you some sense of what all jurisdictions - and I emphasise that - all jurisdictions, particularly in the southern part of the Basin, are managing. Can I indicate also that we were advised that on current projections and under worst case scenario the Lower Lakes in South Australia are now unlikely to reach the acidification threshold prior to February 2010. You will recall, and some of you were at previous Ministerial Councils where this issue has been discussed, that we had in place an interim strategy around pumping from Alexandrina into Albert, to which $6 million was provided. Can I indicate, as I’ve said, that on current projections and under a continuing worst case scenario, the Council has been advised the Lower Lakes are now unlikely to reach the acidification threshold prior to 2010. We have considered the strategy that the Commission has prepared for us: a strategy for avoiding acidification of the Lower Lakes. I want to make it clear what the objectives of this strategy are. The primary objective is to avoid the Lower Lakes becoming acidified. And the objectives of the strategy that were identified and presented to Ministers today were to avoid irreversible damage due to acidification of the Lower Lakes system; to avoid adverse impacts on the water quality of major water supply off-takes; and to use treatments that, as far as possible, do not compromise mid- to long-term options. We have today, as Ministerial Council, endorsed this strategy. It is a strategy which puts in place a range of monitoring measures, a range of pumping initiatives - as I’ve said, the likely scenario being that acidification would not occur until February 2010. It does contemplate as a last resort - as a last resort - the introduction of seawater, if that was necessary to prevent the Lower Lakes becoming acidified. South Australia has agreed, as the relevant Authority, to initiate the appropriate EPBC Act process. And can I add that the Commonwealth is supporting South

Australia in taking this responsible course of action - the responsible course of action being to avoid the Lower Lakes becoming acidified.

I also want to make clear the engagement with the community. I want to thank first the CAC (Community Advisory Council) for the work they have done on engaging with the community in relation to these issues. I want to make clear that Ministers did consider -very closely - the report from the CAC in relation to the community’s views on the Lower Lakes. We have also asked the CAC to communicate this strategy - and have further dialogue in relation to this strategy - with the communities in relation to the Lower Lakes and the Coorong. So we look forward to the CAC doing that and to responding to us.

So I again reiterate what we have agreed to today is a plan of action to avoid the Lower Lakes becoming acidified and we are supporting South Australia taking the responsible course of action to avoid the Lower Lakes becoming acidified. Can I also indicate, in relation to the strategy, that council has agreed to an additional $10 million, in relation to both monitoring and pumping. So a further $10 million dollars to ensure that this strategy is implemented, to ensure we continue to monitor and continue to pump in the period to come.

So I’m happy to take questions at this point. And then my colleagues may have something to say.

JOURNALIST: When do you expect the application to be made to Peter Garrett in relation to the option of opening up the Lower Lakes to sea water? When is all this likely to be signed off on?

WONG: You will receive the communiqué, which I understand is being finalised, in terms of what’s been agreed shortly. What was agreed by Ministers was that South Australia’s constructing authority will initiate, as soon as possible, a referral on the potential need to introduce sea water into the Lower Lakes in order to avoid the risk of acidification if water levels continue to decline. So the indication is as soon as possible.

JOURNALIST: Senator Wong what is your reaction to the Liberal and Green threat to use the Senate to try and block the Victorian pipeline project?

WONG: Well can I say on this is what we have today is the Liberal Party playing exactly the same sort of political games that got the Murray-Darling Basin into the problems we have now. This is exactly the same sort of political games that have brought us to this point and what the Murray-Darling needs is an end to these political games. And that is what this Government is delivering with the support of the Basin jurisdictions. So what I say to the Liberals is this: it is time we stop playing political games on the Murray-Darling Basin. What we need to have is real outcomes. This is an agreement, an historic agreement, that has been supported by all Basin jurisdictions for the first time in the nation’s history. An agreement that is being progressed through the various Parliaments of the Basin.They should do the responsible thing, they should do the right thing and they should support the passage of this legislation through the Senate. We do not need more political games when it comes to the Murray-Darling.

JOURNALIST: Senator Wong, have you again made the point to Mr Holding that the four per cent cap on trades should be lifted? And Mr Holding, are you firmly sticking by that, your position that it shouldn’t be?

WONG: Can I say, these are matters which are the subject of negotiation and discussion through the COAG process and we are very keen to continue dialogue with Victoria on these issues but we understand these are issues which need to be progressed by agreement and we’ll continue to take that approach.


HOLDING: I’ll take that question when… (inaudible)

JOURNALIST: The Commonwealth and some of the States have yet to bring in the legislation that is required to set up this independent Basin manager. It’s almost a year into the Rudd Government’s …

WONG: I’m sorry I’m not sure if I understand the question correctly. The amendments to the Commonwealth Water Act have progressed through the House of Representatives and are before a Senate Committee as we speak. My recollection - I’m sure one of my colleagues will tap me on the shoulder if I’m wrong - is that the amendments have been passed through the New South Wales, South Australian and Queensland parliaments. The only jurisdiction in which we have some potential hold-up is Victoria which is as a result yet again of the Liberal Party seeking to refer, or referring this matter to a committee in the Legislative Council. So yet again, what we have is the Liberal Party playing political games when it comes to the Murray-Darling. And let’s understand - this is a matter for Mr Turnbull. Because it was Mr Turnbull who said we needed an agreement when it came to the Murray-Darling. He was unable to deliver it because he was unable to obtain agreement with the States. The Rudd Government has now delivered it. Mr Turnbull should ensure that the Liberals in Victoria and the Liberals in the Senate deliver on the agreement that he said, when he was Water Minister, was necessary.

JOURNALIST: [inaudible]…graphic diagram of the worst-case scenario. Were there any water sharing agreements discussed today, particularly with New South Wales?

WONG: The State water sharing agreements, as you know, are in place under the agreement that was struck at COAG. But I would like to make this point: States have reflected in their allocation decisions the seriousness of the situation we face in the Murray-Darling Basin. For example in New South Wales, I think it’s general security water has had over the last three years, zero, zero and two per cent allocation. So if you go to communities such as Deniliquin - there are many areas there - well, I think most of the areas there - in terms of general security water licences which have had zero allocation for two years and have just had their first allocation in the third year of two per cent. So States are reflecting in their allocations and will need to reflect in their allocations the situation we face. All of these Ministers and all of these communities face extremely difficult circumstances as a result of the drought, as a result of climate change and as a result of management decisions in the past. All of us are trying to remedy that situation and all Ministers in all jurisdictions have to make difficult choices in finding the right balance between different requirements. Obviously the first requirement is drinking water - critical human needs. There are also very difficult decisions as between the environment and productive use, which are having to be made by all jurisdictions. And I again refer you to the chart that showed you at the outset.

JOURNALIST: Senator Wong, are you able to make any statements regarding the purchase of water at Tandou Station and what that means for the Murray-Darling Basin?

WONG: I’d probably ask that that be referred to the relevant jurisdiction, New South Wales.

JOURNALIST: Minister, are you facing a revolt from the States over your planned emissions trading scheme? You’ve had Premiers write to the Prime Minister, saying that they think key industries will be moving off-shore as a result.

WONG: Can I start with this, and this is the first point: that if you want to be economically responsible you have to tackle climate change. That is clear from Professor Garnaut’s report: that the economic costs to this nation of failing to act on climate change will be far greater than the cost of responsible action now. I also will say this: this is not going to be easy. This is a difficult challenge and the reform that the Rudd Government is progressing is a response to that difficult challenge but we know this will be difficult. We are very focused on taking the economically responsible approach. We believe that tackling climate change is the economically responsible thing to do. We will continue, as we have to date, to consult with industry and the States, as well as other parts of the community in relation to the design of the Carbon Pollution Reduction Scheme.

JOURNALIST: Are you facing a revolt from the States?

WONG: Well, can I say the States - various States - have made submissions to the Green Paper. We welcome that contribution and we’ll continue to consult with them on these issues. I will say again though, we believe - and I think the Australian community does believe - that taking action on climate change is the responsible thing to do. Can I refer you back to the chart I started this press conference with. What is happening in the Murray-Darling Basin, particularly in the southern part of the Basin, is exactly what the scientists have been telling us would occur as a result of climate change. So if you ever wanted an example why we as a nation need to respond on climate change, one should look particularly at the southern part of the Murray-Darling Basin.

JOURNALIST: Do you think there needs to be a tighter definition of critical human needs?

WONG: The issue of critical human needs is an issue that has been subject to discussion at an officials level. It is included in the Water Act. We do know that there are some differences of views of some stakeholders about how that is to be construed. I think broadly we all understand that what we do have to secure is the drinking water supplies, and critical supplies for communities, but obviously those discussions can continue.

JOURNALIST: Do you think abattoirs and piggeries should come under the definition of critical human needs?

WONG: Look, this is a level of detail that we anticipate we will need to resolve. Currently, as I understand it, we have human needs. We also do have the ability to consider circumstances where the withdrawal of water would create very substantial economic and social disruption, so these are issues that will need to be resolved over time.

JOURNALIST: What do you say to people who say that you have given up over the Lower Lakes? By saying and applying for the flooding of the Lower Lakes with sea water, that you’re saying it’s all too hard?

WONG: I will let Minister Maywald respond because I don’t want to speak for South Australia but I think that all of the jurisdictions around the table are very focused on ensuring, as I said as first priority, avoiding the Lower Lakes becoming acidified and that’s why we’ve put in place a strategy to deal with that. From the Commonwealth’s perspective, this wetland, as in a range of other wetlands and other sites throughout the Murray-Darling Basin, are part of the reason why we are purchasing water for the first time in the Commonwealth’s history. As you know we’ve opened recently a southern tender, we already have a northern tender on foot and these purchases are aimed to ensure that we return water to the Murray-Darling Basin rivers to ensure more healthy rivers as we face the challenges of climate change and drought.

JOURNALIST: Senator, when will the on-farm infrastructure funding start to roll out into the communities? There’s been, you’ve said in the past that you’re discussing with the States when infrastructure funding will be made available, when will that - have first discussions progressed from that?

WONG: We have agreed through COAG $3.7 billion worth of funding to the States for infrastructure and we are looking forward to receiving and finalising the State priority projects in relation to that. I will say in relation to South Australia, I did in South Australia - was it last week or the week before? - last week with Minister Maywald and the Premier, attend the construction of a pipeline for potable water at the Lower Lakes, down for the communities around the Lakes, for the eastern side from memory. And that was part of the $120 million that the Commonwealth has agreed with South Australia for that purpose.

JOURNALIST: With regards to infrastructure and irrigation-specific projects together in that funding, are they a priority under that package?

WONG: The priorities of that package - the $3.7 billion, out of the $5.8 - are the State priority projects. The design of those ultimately is a matter of the States but I have said on a number of occasions, we recognise the benefit of on-farm, as well as off-farm, and if water savings can be achieved through the integration of both on- and off-farm reform that is obviously entirely consistent with the Commonwealth’s policy.

JOURNALIST: Can the Commonwealth achieve its $3 million buyback with that cap in place? The four per cent as well as the ten per cent?

WONG: Well as I said, I think in answer to a question from Sophie, that those are matters which will be negotiated, will continue to be negotiated through the COAG. I think we understand Victoria’s position, they understand our views and we’ll continue to discuss these matters through the COAG process.

JOURNALIST: You can continue to discuss them but you must have a view as to whether or not it is achievable.

WONG: Can I say that depends on where water purchase occurs, so I am not going to engage in a hypothetical discussion there about how much water purchase has or might or will occur. I can say this is our policy, this is our approach, we’ll continue to have a discussion with Victoria constructively about these issues.

JOURNALIST: But are you going to be encouraging other States to get rid of their cap anyway and if Victoria wants to maintain its well… [inaudible].

WONG: Well, as I said these are matters that will be progressed through the COAG and really I am not sure I can take that much further.

JOURNALIST: Minister, if there isn’t decent rainfall between now and February 2010, will there be other tough decisions that have to be made about certain environmental elements along the river system as well as the Lower Lakes?

WONG: Well that’s a very good question because there are unfortunately at this time tough decisions that are having to be made not just by me, but by the Ministers who stand around me in the Murray-Darling Basin. And as we know we have environmental pressures, around and across the Basin - not just in one area - and we are very conscious of the need, the difficulties that Basin

communities and the environment face. We are in difficult times. What we can do is what we are doing and it is unfortunate that this is not an approach that was able to be achieved by the previous Government. But what we can do is purchase water to improve the health of the Basin rivers. We can do what we said we would do: which is to invest in irrigation infrastructure so as to make those industries more efficient so they can meet the challenge of the long-term reduction in water availability - which appears likely - and the communities. And this is obviously of benefit to the communities who rely on them. I think I might … [inaudible] we’ll move to other Ministers, if that’s all for me. Other Ministers may wish to speak now.

Thank you.