PRIME MINISTER:
Well ladies and gentlemen we have just completed a very successful meeting and will be issuing straight after this news conference a list of the key outcomes from the meeting. It was called against the background of the terrible drought Australia is suffering, with particular emphasis on the impact of that drought on the Murray-Darling Basin and I thank the Premiers of New South Wales, Victoria and South Australia and the Acting Premier of Queensland for attending the meeting. I think it's fair to say that we came out of it with an even more sober assessment, or understanding, of the challenge. We had an excellent briefing by Mr David Dreverman of the Commission, and I thank him on behalf of my colleagues for the very informative discussion and explanation of the challenges.
We've agreed that we have to collaborate and have a basin wide approach to the problem. We've quite specifically asked a group of officials to be convened by my Department to report by the 15th of December to us on contingency planning to secure urban and (inaudible) water supplies during the water year 2007-08, which commences on the 1st of June next year. We've also agreed to accelerate the implementation of proposals under the National Water Initiative and, specifically, permanent interstate trading will commence in the southern states on the 1st of January 2007.
We've asked the CSIRO to report progressively by the end of next year on sustainable yields of surface and groundwater systems within the basin. The Commonwealth will speedily process the projects presented to us by the states for assessment under our National Water Fund. I announced at the meeting, and I will be putting out a separate statement on this, that the Government has decided to provide additional assistance to small businesses within EC drought declared areas. And effectively that means that if a small business receives 70 per cent of their income from a farm business, then they will become eligible for the support available under EC. This will be particularly valuable in relation to interest rate support which is very important for small businesses.
Under the existing EC arrangements the states pay 10 per cent of the cost of the interest subsidies. They've agreed to pay 10 per cent in relation to the interest payments under the small business extension that the Commonwealth has announced. I noted an announcement made by the Premier of Victoria to rebate 50 per cent of municipal and shire rates in EC areas for eligible people and I have asked the states to consider that and also to consider waiving, or rebating water chart in EC declared areas where water allocations for individuals have been substantially reduced.
I should indicate that the next COAG meeting in April already has on its agenda consideration of water and climate change matters. I finish by saying that this country does face the worst drought in living memory. It has already affected many of our farmers. The Commonwealth stands ready to continue to help our farmers, and I know in different ways the states have also provided help. We are very committed to a collaborative approach. We can't act independently, we are Australians on this issue and in our approaches and our policies we must be prepared to obliterate state borders. As I noted on radio this morning, rivers flow across state borders and The Great Artesian Basin of this country lies under the borders of many states and it's very important that we act in a collaborative fashion. I think the great value of today's meeting was to really fully concentrate all of us on the dimension of the problem, but very particularly, put in place a mechanism to give us specific responses because if this drought does not break and we have a repetition in the next water year of what's happened in the current water year, we will have to have contingency plans to ensure that, not only the survival of our irrigators, but also that towns and communities are provided with water and protected against the worst consequences. Thank you and I'll invite the Premier of New South Wales and then the other Premiers and Acting Premiers to say a few words. Mr Iemma.
PREMIER IEMMA:
Thank you Prime Minister. The devastating consequences of this drought dictated that we come together and work together for practical solutions to continue to support our farming communities, families and businesses that are affected by this drought. And today's outcome, we've done that I believe, in a spirit of cooperation, some very practical measures. Firstly to provide more assistance, but secondly, to work together on sharing information and to work in a collaborative way on the allocation of water. I can also advise that New South Wales and Victoria will resume water trading on Friday. We are particularly pleased that the bringing forward, the fast tracking, the commitment on the part of the Commonwealth as part of the projects that we have submitted in the water initiative, getting those assessed quickly. We've got a number that can assist, particularly in the Murray-Darling Basin, so we're pleased at the commitment to work together to bring forward assessment of projects that will assist in using water more efficiently, but above all, the commitment to move to permanent water trading by January 2007. January the first, New South Wales and Victoria will resume trading at the end of this week on Friday.
PREMIER BRACKS:
Well thank you Prime Minister and if I can just add that I'm obviously very pleased that as part of the decisions that we've made today, that the water market will be a feature of how water is treated in the future. It's very important that water goes to its highest value and, of course, resuming water trading, which will happen this Friday and also the complete water trading system, which will happen by the first of January next year, will enable that to happen. That's a significant outcome from today and I'm very pleased that that will undertaken under the conditions and principles which are set out by the ACCC for trading of water between states and within states as well which will occur as a result of this. I'm also very pleased that drought assistance has been extended by the Commonwealth to include small business as well, and particularly where small business has a marked effect because the revenue they earn is a 70 per cent or greater earned by the rural communities in which they operate. That's a good initiative and I support that and our government will certainly be keen to implement that and work with the Commonwealth in implementation of that.
I'm also pleased that there is recognition of the work that Victoria's doing to assist our drought-stricken farmers in Victoria. The municipal rate subsidy, the payments we've made to our irrigators to compensate them for low reserves that they're receiving, low water allocations and also the deferral of those payments as well. And I'm also pleased that we're able to share information and data to better examine the sustainability of our water supply in the Murray-Darling Basin. And that's probably the major and significant implication out of the meeting today called by the Prime Minister and that is that we will put, as a result of this, our water allocations, our water supply on a sustainable footing. We need to acknowledge and recognise that the figures we've used for an average water flow are not the figures that will be required in the future. This is drought upon drought, upon low water reserves and effectively if we use the 100 year average, we are not representing what's happening with the effect of climate change the low water flows and stream flows which are occurring. We need to look at new data, we need to look at new averages and we need to plan for the future based on that. And that's really the outcome of today, is better sharing of information, better examination by the CSIRO of long term sustainability and better application by the states working with the Commonwealth through the Commission to ensure that we allocate on an appropriate and sustainable basis. I support that, I think the initiative today of the Prime Minister was welcomed, we are in a crucial situation and I'm pleased with the outcomes and certainly will act in a spirit of cooperation to make sure we undertake our share of the responsibility in dealing with this difficult situation on water reserves and water flows.
PRIME MINISTER:
Thank you. Mr Rann.
PREMIER RANN:
Well thank you Prime Minister. Obviously this issue is critically important to South Australia and we certainly welcome the Prime Minister's announcement of special assistance to small businesses affected as a result of the drought. But also to the work that we're going to do and to complete by Christmas in terms of how we can better manage the resource that we do have this year and possibly next year as well, as a result of the drought and the fact that we have the lowest inflow ever into the River Murray. I should say that we were told at the meeting by the Murray-Darling Commissioner that we now face, not a one in 100 year drought, but a one in 1000 year drought. So we're into unchartered territory in that respect. So that was a very critical point made today, that the Commission now believes that this is a one in 1000 year drought. Now that means that we all have to work together. The water in the River Murray does not belong to any one state, it's a resource for the nation and therefore has to be managed collaboratively rather than independently. I have to say too, that I'm very pleased that the issue of climate change will be discussed at the next COAG meeting. This is something that's critically important because what we're seeing with this drought is a frightening glimpse of the future with global warming.
On the other issues that have been discussed, of course, we in South Australia will immediately proceed to start planning work on a weir at Wellington, a weir that we hope will never have to be used, but one that we believe is imperative to start work on. We're very pleased too at the announcement by the Prime Minister that...to accelerate the process of considering applications under the National Water Initiative. We've got obviously a desalination plant and a number of other initiatives that we are pursuing.
PRIME MINISTER:
Thank you, are there...I'm sorry acting Premier.
ACTING PREMIER BLIGH:
Given the technical advice that we received this morning was very sobering. Given the nature of that advice we all accepted our responsibilities to redouble our efforts. The responsibilities we have under the National Water Initiative, the states have committed to accelerate wherever possible, but we're very pleased from a Queensland perspective that the Commonwealth has also agreed to accelerate their consideration of major projects under the National Water Initiative. The critical state of the Murray Darling-Basin in the southern reaches of Australia is something that Queensland is...stands ready as the upper reaches of that system to do whatever what we can to alleviate the experience of not only of irrigators but increasingly town water users.
PRIME MINISTER:
Thank you. Any questions?
JOURNALIST:
...that the one in 1000 year drought is due to other factors that we haven't experienced in the past, in other words is more evidence of global warming and demanding more action on that front?
PREMIER RANN:
I think that there's absolutely no doubt. We've just had a CSIRO report that we tabled in the South Australian Parliament, and I think we all agree that the CSIRO is outstanding scientific evidence, showing that not only do we face more of this in the future under global warming but we're also currently experiencing it.
JOURNALIST:
Prime Minister, Premiers arriving this morning said to us that they wanted a faster roll-out of funds for state-based water projects and we've heard that, you've agreed that there will be an acceleration.
PRIME MINISTER:
No I said there would be an acceleration of consideration of the projects. Just let me point out that the first of these proposals arrived late in August, so lest there be any sort of thought that we'd be sitting on them, that's, let me, dispel that.
JOURNALIST:
(inaudible)
PRIME MINISTER:
Yes, Cubbie Station came up in an indirect sort of way. I think it was raised generically by one of my colleagues, the issue, and I said is that Cubbie Station people are thinking about and the answer was yes. I think the debate about Cubbie Station is a bit of a red herring or a diversion. From recollection I don't have the figures in front of me, but the take by Queensland out of the system is about 731 gigalitres on average a year, that's against a figure of about 7,300 by New South Wales, and I am told that Cubbie Station accounts for about 25 per cent of the Queensland take. So you can pretty quickly see that whilst it might be an attractive subject for media focus and debate and interest, the idea that Cubbie Station is the silver bullet is nonsense. Now whether you do something about Cubbie Station and whether it's a good idea to, in a country as arid as Australia, to have intensive cotton farming is another issue, and I don't offer a view on it. But I think we're sort of missing the point and getting diverted by thinking that doing something about Cubbie will solve the problem. It won't.
JOURNALIST:
Mr Howard, on the cotton farming, which is obviously quite controversial and relevant to the debate, why do you not offer an issue...offer a view?
PRIME MINISTER:
Well I will offer a view at an appropriate time.
JOURNALIST:
Well could we have your view?
PRIME MINISTER:
No, not now. I will decide when I offer my view and the circumstances in which I do.
JOURNALIST:
Mr Rann, how many weeks do you think it would take to build the weir?
PREMIER RANN:
It would take about a year (inaudible) less than that. I should point out and put this into perspective that 95 per cent of South Australians are dependent on the River Murray both for our domestic use for Adelaide, for towns, for irrigators and for industry, yet we take out of the water extracted out of the River Murray, we take out only eight per cent, so 92 per cent comes from upstream users of the River Murray. But it is critically important for us and that's why even in a one in 1000 year drought, it is critically important that we manage the resources as best as we can.
JOURNALIST:
So what will you do if the water runs out in 22 weeks?
PREMIER RANN:
The point is this, well we're not...South Australia will not go dry because we are not going to allow it to go dry in terms of Adelaide's drinking water and that's why we have this meeting. The point is that building the weir will ensure that if we need it, it's there to preserve water security for South Australia.
JOURNALIST:
Where will you get electricity from for your desalination plant?
PREMIER RANN:
Can I just say that the desalination plant that is planned and proposed as part of the Roxby redevelopment, which is a multi-billion dollar development, so it's to provide water for that but also to relieve pressure on the River Murray for Whyalla, Port Augusta, Port Pirie, Port Lincoln and the west coast, we use less electricity, less electricity than is currently used to pump water up to the Spencer Gulf cities. So yes it's an electricity-saving measure building a desalination plant.
JOURNALIST:
Mr Howard, I was just wondering, it was just interesting in the dynamic, when was it discovered that we no longer have the worst drought in a hundred years, we actually have the worst drought in a thousand years and we go from your statement to Mr Iemma's statement to Mr Brack's statement, to Mr Rann before we suddenly, before you drop out the headline?
PRIME MINISTER:
Well the thousand year observation was not in the formal presentation.
JOURNALIST:
Sorry it wasn't in the presentation?
PRIME MINISTER:
No it wasn't.
JOURNALIST:
So who's come up with the...?
PRIME MINISTER:
No, no, it was in, yes, but he...it was an observation he made at the end of his formal presentation.
JOURNALIST:
It just sort of seems a bit off-handed, are we in the worst drought in a thousand years or are we not?
PRIME MINISTER:
Well I wasn't in a position to know, I don't think any of us, you say worst drought in a thousand years, I don't think anybody really knows that. But all that, I mean what we are proposing to do is to publish on the net the substance of what was presented by the Commissioner and the thousand-year thing was an observation he made in response to a question, it was not part of the formal presentation.
JOURNALIST:
It's not based in science?
PRIME MINISTER:
Well you would have to ask the Commission that. You would have to ask the person who made the observation on that, I mean, I am not a scientist.
JOURNALIST:
The Commission won't talk to us because they say that this is the responsibility of the Prime Minister and the Premiers. We've been asking for over a week about this and the Commission say they can't say it because they can't talk to the press.
PRIME MINISTER:
Well all I can do is tell you what happened, and my colleagues will correct me, but what happened at the meeting was he made a presentation, and there was no reference to the thousand years, there was certainly a reference to the severity of it, and then in answer to questions, he made that observation. Now that is the honest recounting of what occurred at the meeting. Now you are asking me is it one in a thousand years, I am not qualified to make that judgement, all I know is that it is a very bad drought, it is the worst in our living memory and we need to do things to address it. And that's what the purpose of this meeting was, but whether it's the worst in a thousand years or 500 years, or 200 years or a 100 years, it certainly according to the charts that were thrown up on the screen, the fact that we've had two very bad years very close together, is unlike the experience at the time of the Federation drought, or the drought immediately after World War II. But I can tell you in the presentation that was made, the one-in-a-thousand year observation was not included, it was verbally included in the presentation I think in answer to a question. Now if people want to, I don't think there is any more I can say and my colleagues will correct me if that is an inaccurate re-counting of what was said. So I would make the observation it was not included in the formal presentation.
JOURNALIST:
Prime Minister, are the states contributing enough to drought assistance and did you try this morning to get them to contribute more than 10 per cent?
PRIME MINISTER:
I didn't ask them to contribute more than 10 per cent on the interest, I did ask them however, and I repeat it, I would like the states, all the states, to consider what Victoria has done in relation to rebating 50 per cent of municipal and shire rates for eligible people in EC areas and also where there has been a substantial reduction in the water allocation to consider waiving or rebating the water charges. And I think given the magnitude of what the Commonwealth has done in this area, that is a fair request but that is a matter for the states to decide, that's a matter for them. I am not making our additional help for small business in any way conditional. I mean we don't make any of this extra drought assistance conditional on what the states do, we see it as our obligation. Now Mr Shanahan you've been patiently waiting.
JOURNALIST:
Mr Howard and particularly Mr Iemma, the new water-trading system that will operate from the beginning of next year, what impact will that have on allocation, over-allocation of water rights and the differences between New South Wales and the Federal Government on compensation for irrigators?
PREMIER IEMMA:
Well the trading system would price the water accordingly and of itself by introducing a market, here's one of the measures that can reduce over-allocation and more efficiently allocate water. In terms of the groundwater we've supported the compensation treatment of the groundwater and those that've received the compensation payments. If you are referring to the taxation treatment of that, we have supported them to be treated as compensation payments.
PRIME MINISTER:
That's a very positive development.
JOURNALIST:
Prime Minister do you agree with an observation by a CommSec economist this morning that an interest rate rise tomorrow would put some parts of Australia into recession?
PRIME MINISTER:
No I don't.
JOURNALIST:
The group that's going to report back on the 15th with contingencies is there anything specific you've asked them to look at like reduced environment flows, making people a priority rather than...?
PRIME MINISTER:
Well I don't think the sort of people who will be doing this need any riding instructions from me about what they should include. Their job is to tell us what has to be done to guarantee security of water supply for towns and communities if as we fear we get a repetition of 2006-7 in 2007-8, that's what they're being asked to do. Now I think they know what all the possibilities are and it would be apparent from the material that will be put on the Internet from the Murray-Darling Basin Commission presentation, it will be apparent what some of the options are including the draining of wetlands, allowing an order to prevent evaporation in some of the dams to dry up, there are all sorts of things that will need to be considered and they will be considered. But the whole purpose is to get a warts and all action plan from this group, and it will be all of us; to tell us what has to be done in a collaborative way to respond to this problem. It is serious and I think we all understand that and that's why I have had this meeting. One more question and then we'll finish.
JOURNALIST:
For the current water year, are you presuming that introducing water-trading will be the primary vehicle by which you best allocate water to where it's needed most, will that solve the urban water protection issue?
PRIME MINISTER:
Well I don't think that of itself will solve it. I mean there is no one solution, it's part of a long-term rationalisation and re-ordering of the way in which water is allocated. One of the things that I did announce and hasn't been the subject of any questioning, but I do think is very important, is the CSIRO examination of the capacity of each catchment valley area within the basin, the water sustainability and so forth, that is very, very important to an understanding of water allocations. And look the whole issue of water allocations can't be, I mean it's quite crucial to an understanding of the challenge we have ahead of us. And plainly, you can't properly consider this issue without looking at questions of allocation, but I have said before and I will repeat here today, that I do not believe that people can be dealt with in a way that doesn't involve proper compensation for something to which they're entitled. Thank you.
[ends]