E&OE...
Thank you very much Mr Chairman. I'm happy again to address the National Press Club on some of the great challenges that face our nation in 2007. Last year I spoke about the great sense of balance in public life and public policy which have been a hallmark of the Australian achievement. Today I want to address in a very direct and detailed fashion one of the great challenges of our time and that is water security.
Before doing so let me, of course, remind you that whatever policies we may have, in areas as specific as water security, ultimately, for their effective implementation, they depend upon the continuing strength and growth of the Australian economy. And there is no greater single challenge in face of this government and of others in public life, than demonstrating a capacity to maintain the enormous prosperity of this nation at the beginning of 2007.
Our lowest unemployment rate in more than a generation, a higher level of business investment, a very pleasing reminder that inflationary pressures are tending downward rather than in the other direction; none of these things have occurred by accident. They are not some kind of automatic God given right, they are only achieved by the implementation of the right policies in the right fashion based on experience and a capacity to take the decisions necessary to maintain the prosperity of our country. Water has always been at the very heart of the existence of the Australian nation.
It influenced the life and the activity of the first Australians. It determined that the British settlement would occur at Port Jackson rather than at Botany Bay, and the great Federation drought of 1892 through to the early part of the next century inspired Dorothea Mackellar to pen those immortal words about droughts and flooding rains. As we grew and prospered as a nation after World War II, we placed heavy demands on our water resources, but that was a time when we invested heavily in infrastructure.
We built the great Snowy Mountains Scheme, we invested heavily in dams and other ways of ensuring that our water resources were there and were available. But by the time of the 1980s, policies began to change. Governments became reluctant, for a combination, in some cases of misguided implementation of environmental policies, became reluctant to invest in the construction of water conservation infrastructure, particularly dams. And that, of course, created understandable concern about the availability of water to look after us in the years ahead.
In the last decade or so, we've begun to turn this around. Billions of dollars both at the state and a federal level have been set aside for projects individual projects. Our own $2 billion Water Fund is leveraging major investments in every state. And through the Living Murray Initiative, we are on the way to restoring six iconic environmental sites in our greatest river system. And with the National Water Initiative, a long-term framework is finally in place to increase the efficiency of water use, to service the needs of communities, and to return our river and groundwater systems to environmental health.
Despite this, the current trajectory of water use and management in Australia is not sustainable. In a protracted drought, and with the prospect of long-term climate change, we need radical and permanent change. I regard myself as a climate change realist. That means looking at the evidence as it emerges and responding with policies that preserve Australia's competitiveness and play to her strengths.
There does appear to have been a contraction to the south in the weather systems which traditionally brought southern Australia its winter and spring rains. Our rainfall has always been highly variable. The deviation around average rainfall is enormous. And it seems to be getting bigger.
We need, so to speak, to make every drop count, on our farms, in our factories and in our homes. Our water management systems must be geared not to a world of steady averages that rarely materialise, but to the variability that has been part of Australia's climate since time immemorial.
Water solutions will vary from place to place. The truth is, as I said last July, we have the capacity to drought-proof our large cities. What is needed is more investment, sensible pricing and an end to state governments using water utilities as cash cows. Our water scarcity problems are bigger in rural Australia given the drought and unsustainable water use in many places.
Against this backdrop, I announce today a $10 billion, 10 point plan on a national scale to improve water efficiency and to address the over-allocation of water in rural Australia, particularly in the Murray-Darling Basin.
The plan has the following quite specific elements. Number one, a nationwide investment in Australia's irrigation infrastructure to line and pipe major delivery channels. Number two, a nationwide programme to improve on-farm irrigation technology and metering. Number three and very importantly, the sharing of water savings on a 50/50 basis between irrigators and the Commonwealth leading to greater water security and increased environmental flows.
Number four, addressing once and for all, water over-allocation in the Murray-Darling Basin. Fifth, a new set of governance arrangements for the Basin. Number six, a sustainable cap on surface and groundwater use in the Basin. Number seven, major engineering works at key sites in the Murray-Darling Basin such as the Barmah Choke and Menindee Lakes.
Number eight, expanding the role of the Bureau of Meteorology to provide the water data necessary for good decision-making by governments and industry. Number nine, a taskforce to explore future land and water development in Northern Australia and finally, completion of the restoration of the Great Artesian Basin.
This 10 point plan opens a new chapter of national water management in Australia. It is a large but prudent investment, especially given the importance to Australia of the Murray-Darling Basin, and the scale of the water crisis that confronts it.
The Basin accounts for the vast bulk of irrigated agricultural production in Australia and roughly 85 per cent of our irrigation water use. It has a population of two million people, and another one million people in South Australia are heavily dependent on the system for their water.
The last five years have been the driest in the Basin since records began. As a result, the operation of the River Murray remains, in the words of the Commission, on a