Senator the Hon. Simon Birmingham

Parliamentary Secretary to the Minister for the Environment

Senator the Hon. Simon Birmingham

Parliamentary Secretary to the Minister for the Environment

Topics: Menindee Lakes annoucement

Transcript: Doorstop, Parliament House
12 December 2013

SIMON BIRMINGHAM: Thanks very much for coming along today. It's wonderful to be here with the New South Wales Minister for Primary Industries and Small Business Katrina Hodgkinson, who has responsibility for water matters in the New South Wales Government. It's great to have Katrina here because it's wonderful to have such a productive working relationship with the New South Wales Government and with Katrina in particular.

In the few months since the change of government took place in Canberra we've worked very hard to get water planning back on track, and Murray-Darling reform back on track, and to ensure that we can honour our commitments to deliver the Murray-Darling Basin Plan in full and on time, in a way that is far more sympathetic to the concerns of irrigation communities and in a way that preserves the productive capacity of those irrigation communities. I've been delighted with the cooperative approach the New South Wales Government, and Katrina in particular, have demonstrated as we're working to resolve terms around the intergovernmental agreement on Murray-Darling Basin implementation, working to progress priority projects across New South Wales, and working to ensure that we can deliver our commitments whilst ensuring that New South Wales farming and irrigation communities have a bright and healthy future, as do all communities throughout the Murray-Darling Basin. Now, today I'm pleased to be with Katrina in announcing two particularly important steps forward in relation to the Menindee Lakes Project. Menindee Lakes is something that has been talked about for far too long. Today we're talking a good step forward to see some action taken to manage to achieve some water savings in Menindee Lakes that can be for the benefit of the environment and irrigators alike. Menindee Lakes are one of the large storages throughout the Basin, some seventeen hundred gigalitres of water is stored in Menindee Lakes. But up to four hundred gigalitres can be lost in any one year, on average, through evaporative losses. We've been working closely with the New South Wales Government and identified a potential suite of works and measures that could try to reduce the types of evaporative losses by up to around eighty gigalitres. This is a significant step, potentially, in meeting the twothousand-seven-hundred and fifty gigalitre gap that has to be bridged towards the implementation of the Murray-Darling Basin Plan. I'm delighted that Katrina and I have signed an agreement between the New South Wales and Federal Governments to provide up to eight hundred thousand dollars to New South Wales to advance the next step of project planning. Project planning that will do the scoping works, that will undertake the consultation with the communities, and within the next twelve months will have us hopefully on track to have a detailed timeline for exactly what and exactly how we will manage to get and achieve water savings in Menindee Lakes for the benefit of the environment and for the benefit of irrigators.

Because if we achieve those water savings, we will ultimately see the water returned to the environment, without having to take it out of the productive capacity of irrigators throughout the Basin. I'm also pleased today to be releasing this wonderful report, great bedtime reading, I've got no doubt, for everybody. A Geoscience Australia report into the groundwater resource potential in the Menindee area. This is a significant body of work and it is really a world first body of work in terms of the way it has analysed the water resource potential in the Menindee Lakes and the water resource potential especially of the groundwater reserves surrounding the Menindee area. It's identified around fourteen discrete groundwater opportunities in that area, and in particular it's identified the potential to be able to supplement Broken Hill's water supply in instances of drought. Now, there's more work to be done and the New South Wales Government, as part of our agreement, will be taking a look at exactly what the sustainable use of those groundwater resources could entail. But this is very promising work that's identified extensive groundwater resources through the Menindee Lakes area and provides great hope that we can manage to structure an arrangement where we secure Broken Hill's long term water supply, as well as managing to secure the water resources by doing works on Menindee Lakes. So I want to again thank New South Wales for their cooperation. We look forward to working through the next few years to get projects like this actually happening, to see the works on the ground, to see the Basin plan implemented, whilst having healthy, productive, vibrant river communities growing food and fibre for Australia. With that, Katrina, thank you very much, and I invite you to say a few words.

KATRINA HODGKINSON: Thanks, Simon. Good morning everybody. Today New South Wales is one step closer to signing the intergovernmental agreement on the Murray-Darling Basin Plan for the Commonwealth Government. It's an area that we had a lot of concern with, with the previous Labor Government, who were absolutely recalcitrant when it came to primary production and the needs of irrigators and sustainable irrigation, particularly in our Western Division and throughout New South Wales. It's great to have a new era of cooperation with a new Commonwealth Coalition Government, particularly under Simon Birmingham as the Water Minister. And the level of cooperation, I think has come forward just in leaps and bounds, just in the last few months alone. Signing the agreement in relation to Menindee is a big step forward. So what we're doing is now making sure that there is an additional supply of water for Broken Hill in times of extended drought. New South Wales has a policy of making sure that we do have secure [inaudible] water supplies for regional communities, looking well into the future, trying to advance that fifty to a hundred years into the future. And what we've signed today with the Menindee agreement, together with the Commonwealth, certainly takes us one step closer to that. The Menindee agreement was a real key sticking point for New South Wales in signing the Murray-Darling Basin IGA and today we're one step closer to getting an agreement with the Commonwealth, so it's a great day.

JOURNALIST: What's left in terms of getting that IGA signed off on now?

KATRINA HODGKINSON: Yeah, we're still talking a few separate things, there's been structural adjustment, there's been constraints, there's been issues relating the eastern and western porous rock regions, and sustainable diversion limits, which looks as though we have now worked our way through. So we are actually very close to being able to sign that agreement, which is very pleasing for New South Wales and I'm sure very pleasing for the Commonwealth as well.

JOURNALIST: What about the funding for the Murray-Darling Basin Authority, you've drawn funding from that?

KATRINA HODGKINSON: Yes, that's right.

JOURNALIST: Where is that all at, because I believe there was going to be a Productivity Commission review, which Craig Knowles was saying was going to answer some of the questions.

KATRINA HODGKINSON: Well, look, I've had great concerns with many of the actions of the Murray-Darling Basin Authority over many years, I've been very concerned about the lack of transparency in their operations, the volumes of staff that they've had, and New South Wales has contributed a lot of money over many years to the Murray-Darling Basin Authority while getting very little in return. What we had under the former Labor Government was a lot of threats, a lot of threats to our irrigation communities, a lot of fear throughout our regional communities for what Labor was intending to do, particularly when it came to non-strategic buybacks. And that is another area where we've had very constructive dialogue with the new Commonwealth Minister, with Simon Birmingham, which I appreciate. So that is where our concerns were with the Murray-Darling Basin Authority, it's former activities, and, you know, we just had to think really rationally when we came into government, are we getting value for money by spending massive amounts - many millions of dollars - on the MDBA. And the answer was, well, no, we don't believe it's value for money, we don't believe there's good transparency there with the Authority. So we - you know, we had to find budget cuts in all of our agencies, and that was an area where we could see the value for money, so there was a budget cut in that area.

SIMON BIRMINGHAM: If I can just - yeah, sorry...


SIMON BIRMINGHAM: If I can just add on that particular point following. It's important to understand in relation to the MDBA, that it essentially operates two clear roles. One role in relation to Basin Plan implementation and Basin Plan functions. The Commonwealth solely funds those functions, and so there is no risk to the implementation arrangements around the Murray-Darling Basin Plan.


SIMON BIRMINGHAM: The other side of the ledger that it operates, though, is in terms of the practical running of the Murray-Darling Basin, the operation of dams and locks and weirs, and that's where there's a level of dispute between the states about exactly how they should be run and funded. Now, we're trying to work through those processes. I'm pleased that at the Ministerial Council Forum a couple of weeks ago, we agreed on a process to look at some governance reforms around exactly how it's managed and how the states get a better, clearer say and line of sight over what's happened in that regard.


SIMON BIRMINGHAM: And hopefully we'll put some - and certainly we'll be putting some reform proposals forward to the states, ideally within the next coming few weeks.

JOURNALIST: Is there still a Productivity Commission review?

SIMON BIRMINGHAM: We're working through that option as well, and that is still a live option, but we're looking at all of those capacities, and if we can agree on reform options without the need for a PC review, then that would obviously be a great way to step forward. But it's all still live options.

JOURNALIST: Senator, you're out saying eight-hundred thousand dollars effectively for a scoping study to reduce evaporation? That's important, but as you say, we've been talking about Menindee for a very long time. How soon might the works to actually reduce evaporation, as opposed to the scoping study, actually start and start saving water?

SIMON BIRMINGHAM: Well, this is actually about progressing some specific options as well. So we need to recognise that, identified in terms of the works that will be undertaken, are certain regulators that can be put in, certain management options for the Lakes. A range of very specific options that now will be worked to a level of detail that will allow us to, within twelve months, receive those works back, know what's going to be acceptable to the communities, know what's going to work and how much water it should save. And then we will be looking as quickly as possible to sign the full funding agreement, to undertake the works and to actually see them happen. And there are some unknowns in relation to exactly when you can start works. If we have a wonderful summer season where the drought breaks in northern Australia and the rains flow and the rivers flow and the lakes fill up, then it will take a little longer to be able to actually physically undertake the work. But the important thing today is that we're taking good step forward, after many setbacks under the previous Labor administration. If we can take that step forward, then we'll actually have some concrete proposals developed, it can go to funding agreement stage within the next twelve months.

JOURNALIST: You also mention in the report you've got here the importance of the Broken Hill water supply. How does the water supply tie in with the use of water by mining companies and looking at that [inaudible]?

SIMON BIRMINGHAM: Well, it's up to the New South Wales Government, in terms of the potential for ground water extractions. We've undertaken with Geoscience Australia - who I can't praise enough for the innovation and work they've done here that is world renowned status now in terms of using the techniques of mining and energy exploration companies to identify ground water reserves. But, ultimately, licensing decisions, water extraction decisions of those ground water reserves will be matters for the New South Wales Government. Their top priority under the agreement we've signed today is to look at what can be sustainably used in extreme drought circumstances to protect Broken Hill. It will be a matter for the New South Wales Government as to whether they look at any other opportunity from the ground water resource.

JOURNALIST: I heard Minister Hodgkinson say that this is another step forwards for New South Wales, perhaps, being able to sign up to the IGA. How confident are you that you can get New South Wales and also Queensland to sign up?

SIMON BIRMINGHAM: Minister Andrew Cripps from Queensland - just like Katrina from New South Wales - has been fantastic to deal with over the last few months. We've been systematically working through the outstanding issues, and I am really very confident that we will be in a position to sign the IGA, have all of the Basin jurisdiction signed on, within the next few weeks, or at least couple of months, dependant, of course, upon delays that might happen over the Christmas period. But we are really very close with both jurisdictions.

JOURNALIST: And any update on we might expect to see the cap on buybacks go through the Parliament?

SIMON BIRMINGHAM: Well, the cap on buybacks is effective now - the Government and an administrative level. We've made it very clear that we will not be exceeding the 1500 gigalitre cap on buybacks. We'll be outlining that in more detail in the water recovery strategy to be released quite soon. And next year we'll introduce legislation into the Parliament.

JOURNALIST: Can we talk about Holden?

SIMON BIRMINGHAM: Anything else on water?

JOURNALIST: Yeah. If we could ask a few quick questions about the future of Holden. South Australian senator, it's obviously big news for South Australia and Adelaide. What are your thoughts on this? Could this have been avoided?

SIMON BIRMINGHAM: Look, I think there's been an inevitability around the Holden situation for quite period of time. Mitsubishi made their announcement that they were going to leave in 2008. Ford made their announcement earlier this year. Clearly, the automotive industry has been losing critical mass for some period of time and has been suffering under the high costs, uncompetitive cost, of doing business in Australia. Now, there are two clear things that need to be done from today. Yesterday was a tragic day, a tragic day where we saw the job losses announced. Today needs to be the day where we start to move forward and secure the future for those workers, their families, the direct communities affected and, indeed, the states of Victoria, especially South Australia, my home state. Now, I expect that we will move forward, as the Prime Minister has announced, in looking at immediate short to medium term responses, to work with the workers, deal with the situations in those communities. But we also need to keep our eye on the long term ambition, which is making Australia a more competitive place in which to invest and do business. That means lower costs, lower taxes, lower regulatory hurdles for businesses to invest. These are the types of things that have really made it uncompetitive for the likes of Holden or Mitsubishi over the years, and Ford as well.

JOURNALIST: Will you personally be lobbying the Prime Minister on behalf of South Australia workers?

SIMON BIRMINGHAM: I've already had discussions with the Prime Minister in his office, as I have with senior ministers, as we've been doing for some period of time. And it's really important to us to make sure that we get the right short to medium term response but, really, we shouldn't lose sight of the long term aspects of this. It is the long term factors that have rendered it impossible for Holden to stay, have left them in a situation where their business costs were just too high. And we've got to address those fundamentals if we are to stop seeing these businesses pack up and leave Australia.

JOURNALIST: As you said - sorry, as you said it was inevitable. I mean everyone saw this coming. So are there specific measures already in place for those workers?

SIMON BIRMINGHAM: Well, there are certain protections already built in for workers, but the Government, of course, has had certain discussions about what might eventuate. The Prime Minister's outlined that he expects to have more to say in the next few days. But also we'll be looking to make sure we adopt the right strategic approach, that we talk to business leaders in South Australia, that we undertake the right steps to ensure that where we do invest, or we do support these communities, we're doing so in a way that delivers real dividends and real jobs that are sustainable for the long term.

JOURNALIST: Labor claims that the half a billion dollars that the Coalition's used to put in - in addition to the subsidies given to the industry is responsible for Holden's decision. Has that had any bearing, do you think, on Holden's decision to leave Australia?

SIMON BIRMINGHAM: That's just political hyperbole from Labor. The reality is that Holden made very clear the business costs of operation in Australia were too high to have a business case that warranted staying. Now, Holden have been quite up front, and it's been evident for a long period of time. They were thinking about making this decision. It seems it's been clear for some period of time that they had probably already made this decision. Our challenge now is not to engage in a blame game, not to engage in a game as to why Mitsubishi left or why Ford left or why Holden left. It's to set Australia up to be more competitive in the future, so that we don't see more businesses go offshore and so that we can attract more investment here in Australia.

JOURNALIST: Isn't it similar hyperbole blaming the carbon tax, though?

SIMON BIRMINGHAM: Well, I'm saying that we get rid of the carbon tax, we make Australia a more competitive place in which to do business. That's just a reality. Lower taxes makes Australia more competitive. Lower regulation will make Australia more competitive. And that's what our Government's getting on and doing. The Labor Party have a chance in the Senate today where they could say we'll actually let the carbon tax repeal go through. Yesterday we moved some changes in environmental regulation to improve the opportunity for investments to get off the ground and to reduce the potential costs for business. We're a Government focused on reducing those costs to business, which is the only thing we can really do to create a sustainable environment for investment in the long term.

JOURNALIST: So you don't think the carbon tax is directly responsible?

SIMON BIRMINGHAM: I think the carbon tax played a role but, obviously, there were many factors in Holden's decision. They've identified those; some of which are outside of the Government's direct control, like the dollar. But others, in terms of the high cost of production, the high tax environment, the high regulatory environment, are matters within not just Federal Government control, but State Government control as well. And Premier Weatherill, in coming to Canberra today, might be right to argue for support and response to assist South Australia in future, but he also needs to state very clearly what his Government will do - what the South Australian Labor Government will do, to again make South Australia remotely competitive as a place to invest in and do business in the future.

JOURNALIST: Is it some form of irony that Paul Keating, who floated the dollar thirty years ago today, is now addressing Labor caucus, given what we've seen with Holden's position and the impact that the floating of the dollar has had on its operations?

SIMON BIRMINGHAM: Well, those economic reforms were important reforms. They opened up Australia's economy to the world, and we are a richer and more prosperous country now, than we were a few decades ago. That's a difficult thing to accept, perhaps, when you look at a decision like Holden's made yesterday, but we need to keep our eye, as I said before, on the long term. There are short term responses necessary to address situations for workers and families, but we need to keep our eye on long term reforms. And opening Australia's economy up to the world has done wonders for our agricultural exports, for our mining exports, for our financial services industry. We need to find ways to ensure that the economies of South Australia and Victoria can capitalise on the industries where we have competitive advantage and opportunities for the future, and diversify those economies beyond areas where, clearly, we have become, sadly too uncompetitive in which to do business.

JOURNALIST: Paul Keating also - his comments, calling Australia - could potentially be a banana republic - was a massive shock to the system, sparking these reforms essentially. Could this decision by Holden have a similar effect on the order - on manufacturing industry and the Australian economy?

SIMON BIRMINGHAM: Well, I certainly hope it provides a wakeup call to the Labor Party that they need to get out of the Government's way and let us set about implementing our policies to reduce taxes and reduce regulation. I hope it provides a wakeup call for the South Australian State Government that they need to start creating an environment where South Australia is an attractive place in which to invest, not a high cost and high tax place in which to invest. So if there can be one good thing coming out of the tragedy of the Holden announcement, I hope it will be that it actually is a wakeup call, especially to state and federal Labor, that we need to have more fundamental reforms to make Australia and South Australia a more attractive place in which to do business. Thanks, guys. Cheers.

Simon Birmingham