Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

My question is to Senator Minchin, the Minister representing the Prime Minister. Will the minister update the Senate on how the government is assisting rural communities to cope with the devastating drought? Will the minister also advise on the outcome of today’s Water Summit?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I thank Senator Boswell for that question, and I note that it is Senator Boswell and other Liberal and National senators who ensure that this government has a very acute understanding of the severity of this drought and its impact on rural communities. We will continue to develop policies to assist those communities to deal with what is obviously a very severe drought. On that score, on 24 October we announced additional drought assistance worth $560 million. EC assistance was extended to all eligible farmers in 44 regions across the country until 2008. Prior to that, on 16 October, we announced a $350 million extension of EC assistance, including 18 EC declared areas across four states. Together, these announcements will deliver an extra $910 million in drought support to drought-affected farmers.

A drought of this severity has, of course, a wider impact than just the farmers involved. It flows through to rural businesses and other businesses in rural towns and communities. The government has announced today that it is extending eligibility for EC income support and interest rate subsidies to farm-dependent small businesses operating in EC declared areas. Any small business that can demonstrate that 70 per cent of its total income is derived from farm business in an EC declared area and that it has experienced a significant financial downturn because of the drought will be eligible for this new package of assistance. This will provide around $210 million worth of support to rural small businesses. The states have agreed to pay 10 per cent of the interest costs of this measure, which we welcome. That brings to $2.3 billion the total amount of support we as the Commonwealth are providing to EC affected areas.

Financial support is only part of the picture. Of course, to survive this drought and prepare for the future we need to make better use of water, especially in the Murray-Darling Basin area. That is why the Prime Minister today convened a water summit with all the key state leaders. The summit heard this morning from the Murray-Darling Basin Commission about the severity of the drought, about inflows into the basin being 90 per cent below the average, and they heard about the risk that this drought period could extend into 2007-08.

The Prime Minister and the premiers have resolved to accelerate the implementation of key aspects of the National Water Initiative, especially on water trading, over-allocation, water accounting and data sharing. We as the Commonwealth will process speedily our response to major projects under the Australian government water fund. A high-level officials group will report back in December on contingency planning to secure urban and town water supplies in 2007-08. The CSIRO will be commissioned to report progressively by the end of 2007 on sustainable yields of surface water and groundwater systems within the basin. We are encouraging the states to follow Victoria’s welcome lead in providing a 50 per cent rebate for municipal and shire rates to eligible recipients and also to waive or rebate water charges in EC declared areas where water allocations have been substantially reduced.

More generally, we are all committed to gaining a better understanding of the likely water availability over the next 18 months and to making decisions for the good of the entire Murray-Darling Basin. There will be on the part of all governments the requirement to make some fairly tough decisions over the course of this very severe drought. The collaborative approach demonstrated today does need to continue if we are to ensure that the burden of this drought is shared fairly across the community.

Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

I too have a question to Senator Minchin in relation to today’s water summit. Minister, can you clarify the position of the government in relation to buying back water licences? Hasn’t the Minister for Agriculture, Fisheries and Forestry ruled out the government buying back complete licences and only supports a limited buyback? Given the minister for agriculture acknowledged yesterday that ‘far too many’ licences had been granted, and supported an open market on water trading, why shouldn’t the government participate in that market and buy back water for environmental flows? Isn’t that a good way to restore the water flows to our dying inland rivers? Why should the government be restricted to only buying back water gained from efficiencies?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

The government does not have a policy at this stage of outright purchasing of water licences. That is not current government policy. As has been correctly pointed out, we did announce that we would be running a tender to recover water through the Living Murray initiative, and water obtained through the Water Through Efficiency tender, which opened on 1 November, will be from efficiency gains, allowing agricultural production to be maintained. It is a matter we constantly keep under review. All I can say at this stage is that it is not government policy to directly enter into the direct purchase of water licences.

Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I thank the minister for that response. Just last month the Prime Minister told the ABC Four Corners program:

I accept that climate change is a challenge. I accept the broad theory about local warming. I’m sceptical about a lot of the more gloomy climate change predictions.

Does the government now accept that climate change is contributing to the ‘gloomy’ state of the Murray-Darling Basin and that climate change is contributing to what the Murray-Darling Commission itself described as a one in a 1,000-year drought?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

As the Prime Minister said, it is not really possible to accurately say whether this is a one in a 1,000-year drought, a one in 500-year drought or a one in 200-year drought. This is a very severe drought. The Prime Minister met this morning with the four relevant state premiers or their representatives to discuss how we as the federal and state governments dealing with the Murray-Darling Basin can most effectively, properly and reasonably deal with the severity of this drought and its impact on rural communities and cities like my city of Adelaide. Whether or not this particular drought is a function of the general view in relation to global warming is a matter, obviously, which everybody can have a view on. What we have to deal with is the fact of this very severe drought, and that is what today’s water summit was all about.