25 January 2007

The Business Council of Australia welcomes the long-term plan to address Australia’s water crisis outlined by Prime Minister John Howard today.

BCA Chief Executive Katie Lahey said the plan provided a comprehensive strategy to fix Australia’s rural water problems.

“The ball is now firmly in the court of the states to implement their plans to provide sustainable water supplies for our major cities,” Ms Lahey said.

“We have now reached a crisis in rural water management as a result of inadequate federal–state relations. The Murray–Darling Basin issues best reflect the failure of our federal system.

“While we welcome the solutions being put forward on water the fundamental problems stemming from dysfunctional federal–state relations extend more broadly than this. The BCA believes there must be fundamental reform of federal–state relations if Australia is to sustain strong growth,” she said.

Ms Lahey welcomed the fact the plan recognised the urgency of fixing chronic water shortages and poor management of this scarce resource, and the pressing need for a new framework to manage our water system.

She said the BCA had for some time maintained the problems with our water supplies were not caused by an unavoidable lack of water, but a lack of political will across the board to properly address the issues.

“For over a decade we have seen many promises made and not realised, such as commitments by the states to the National Water Initiative, and the time for action is overdue,” Ms Lahey said.

“Our preference has always been for major issues to be resolved cooperatively under our federal system.

“But as the High Court showed in its decision on our national industrial relations system, the Commonwealth Government has the right to show leadership and step in on matters of national importance when it is clear a key issue of fundamental importance to our economy has reached an impasse,” she said.

Ms Lahey said the BCA hoped that within the new framework there was still room for greater cooperation between Canberra and the states on the water issue.

“We call on the states to refer to the Commonwealth their powers on water management within the Murray–Darling Basin in a timely manner so that the health of this river system can be restored,” she said.

“States can also continue to play a major role in managing Australia’s key catchments and we hope the Commonwealth Government’s announcement does not mean the issue continues to be a political football and framed by short-term considerations.

“Ultimately, any new approach needs to result in sustainable improvements to Australia’s water management, such as an increase in sources and supply, more efficient allocation and incentives for ongoing investment.

“We also need to look at more fundamental issues that prevent effective public and private investment in new water supplies and how better management and allocation of our water resources can result in increased water supplies for our major cities,” she said.