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COAG Meeting Reaches Water Agreement But State Leaders Walk Out Over Health

This is the text and partial audio of the Council of Australian Governments meeting in Canberra.

Agreement was reached on the Water issue, but the State and Territory leaders walked out of the meeting because of disagreement over Health.

The audio recording is incomplete and begins with the press conference in progress.

  • Listen to the press conference (13m)

Transcript of joint press conference with Prime Minister John Howard and Deputy Prime Minister John Anderson.

HOWARD: Well ladies and gentlemen, the Deputy Prime Minister and I very deliberately have decided to have a joint news conference, particularly in the light of the historic agreement reached at COAG today regarding the national water initiative and the Murray Darling Basin because no person in public life has done more to bring about this historic reform than John Anderson. He’s worked tirelessly on behalf of the Commonwealth and in the national interest, he’s negotiated with farmers, with environmentalists, with scientists and with State Ministers and we have achieved a great result.

The water reforms coming out of COAG today are an illustration of what can be done when people of a different political disposition put aside those differences and rise to match the national interest and that happened. There’s been agreement reached in relation to the Murray Darling Basin. The Commonwealth agreed largely in the interests of helping South Australia to increase its contribution to $200 million so that we will bear 40 per cent and the States 60 per cent. It’s a very generous contribution by the Commonwealth given the historic proportions. The really important… important though that is, the really important long term thing is the agreement on the national water initiative and for the first time we have a national framework which we can now go forward on, it’s a great outcome for farmers, it’s a great outcome for environmentalists and it’s a great outcome for the nation. And I know that John would like to say something about the water agreement before I move to other matters.

ANDERSON: Well PM, thank you. And, you know, we’re the driest continent on earth and yet we use 30 per cent more water per head than OECD averages. No country has a greater interest in getting water right for the next century and beyond than this one.

I wanted to say though that the key to the national water initiative more than anything else is to end the uncertainty and I see all this talk about compensation for farmers and so forth. That’s the, if you like, the underpinning aspect of restoring the certainty that’s needed. But the key to it, the key to it is ending the uncertainty, restoring the investment confidence that will see those major water users in our community who provide us with our tucker and our clothing and a heck of a lot of jobs and export income, having the certainty they need to invest in better production techniques which will give better economic and environmental outcomes. That’s where the bulk of the benefit will flow from, that’s the key to this and I just want to say there’s never been a happier moment in public life for me than to have secured this. There’s a lot of work to do. I pay tribute to the officials who have done a lot of work and have a lot to do, including David Borthwick over there, not normal to mention public officials at these, I know, but he deserves it, he’s a great Australian. And they will have to cover off on how we design a set of trading rules, the transitional arrangements, a national register of who has what and urban water reform because water reform affects every single one of us, whether it’s the water we use in our own homes or the 50,000 litres of water we account for every time we have a steak, or the 650,000 litres of water every time we put on a suit to go to work in.

It would be simply wrong of me not to acknowledge that the breakthrough came when I was able to sit down and talk in a mature and sensible way with Craig Knowles after the New South Wales State election. I want to thank my office. I want to thank the PM in particular for his very strong support for this. I want to thank the scientists, the environmentalists, the farm leaders who have helped us realise that the key to this is to be found in abandoning the command and control approaches that were building too rapidly in the nation and to build an approach based on consultation, on cooperation, on agreed science, on agreed information, on fair transitions and on the restoration of certainty.

So needless to say, I’m absolutely delighted Prime Minister. I thank you in every way and I think this is something that future generations will look back on and say – well, driest continent on earth, we had to get it right and it all happened, perhaps a little later than it should have given that the first COAG on water was 1994, but at the 2003 one we finally set the foundations that will ensure we’ve got a building that’s rooted in stone rather than on sand.

HOWARD: Thank you.

JOURNALIST: [inaudible] success with this water reform why do you think there wasn’t the same level of co-operation on health reform in the states.

HOWARD: Because the states decided to abandon the national interest and play politics. Their walkout was a display of petulant politics. It was pathetic grandstanding. I have made it clear all along that the Commonwealth offer was a final one. It was a generous offer, it was a 17 per cent increase in real terms. But the amazing thing is that they passed up the offer of a reform process which they claimed was the most important thing of all. When Mr Beattie entered the meeting this morning this is what he said, “This is about reform. Look, money’s important but reform is at the top of the agenda”. Last night when we had dinner at the Lodge, I made my position about the funding very clear. They raised this absurd proposition that we should delay the signing of the agreement for 12 months, which would put it bang square up against the next federal election, which is just a piece of political mischief. I made that clear last night. And on behalf of the other Premiers, Mr Beattie raised with me the question of having a reform process. I said I would think about it and at the opening of the meeting this morning I said I was happy to talk about health first up and they weren’t then ready to do that – well they said they weren’t. And we subsequently came to it and I agreed after the debate about the funding issue, where I rejected the claims being made by the states that our offer was inadequate, I said that I would agree to a reform process and that each of the seven items raised by Mr Beattie would be part of that process and they got up and walked out. See… but they’re now saying they’re going to sign the agreement. I mean, they can’t be serious, if they were really raging… I just don’t understand their behaviour, it can only be explained as a political stunt and I believe it will be seen by the Australian public as a political stunt because what they have by their behaviour done is to pass up the opportunity to the very thing they said was more important than money and that is an examination of a reform process.

JOURNALIST: … discussion and reform now.

HOWARD: Well it’s been made, Misha, it’s been made impossible, certainly in the short term, by their behaviour. I mean, what they have done is in one stroke, they have passed up the opportunity of the very reform process they said was necessary but they’re now going to sign the agreement. It is just so contradictory.

JOURNALIST: Is your offer to examine reform still on the table?

HOWARD: No, look it’s not. I mean it was… look you can’t deal with people, certainly in the short-term, who just get up and walk out. I mean obviously they’re the Premiers and they need to talk to me about matters that are important to the nation, I will always talk to them courteously. But this is just a silly little stunt which I don’t believe should impress anybody. I have been quite open for months about our position on funding – open for months. And I made it clear to them last night privately that there was no more money available. I have made that clear publicly. The one additional thing they raised was this reform agenda and I said yes to that. But they got up and walked out. I think in the short-term that makes a reform discussion with them impossible.

JOURNALIST: [inaudible] delay for maybe three months…

HOWARD: Look it’s been on the table…

JOURNALIST: … to get the reform…

HOWARD: Mate it’s been on the table since May, since May. I wrote to each of the Premiers in May and I explained our offer in detail and they want to string it out and nothing would be achieved by that.

JOURNALIST: But your reform agenda has only been on the table today. Why not just delay the agreement for say three months?

HOWARD: No what I put on the table today was a willingness to have a two-year reform process, that we would have something conducted under the auspices of COAG over a period of two years, and then that would come back to COAG and if we reached agreement on anything, I said I’d be perfectly happy to amend the five-year agreement so that in no way was signing the agreement locking out reform. Now that’s what I was willing to do, and I have put out a statement containing the details of that. But they said no.

JOURNALIST: Mr Howard, is this the biggest stunt of this kind you’ve seen at one of these…

HOWARD: Oh I’ve seen a few. This is the best I’ve seen in the last… in the time I’ve been Prime Minister. I saw a couple when I was Treasurer that approached it but, you know, you had Bjelke-Petersen and Court then – they were pretty good. Especially Joh.

JOURNALIST: Mr Anderson, you said before this is the happiest day in public life for you. Might it also be an opportune time for you to consider your retirement from public life given that you’ve achieved this historic reform?

ANDERSON: I’ve got a few things to do yet. I’ve got a National Transport Plan on the agenda right at the moment. Getting pretty close on that one too.

JOURNALIST: Mr Howard, you told the ABC yesterday that the kinds of incentives given to the ACT to get them to sign would be available in deals to the other states. The Premiers say that no such offers were made. Why not?

HOWARD: Well I think you’ll find that we have not treated the ACT in money terms any more favourably than we would be willing to treat the states.

JOURNALIST: But they were given extra incentives, whereas the rest of…

HOWARD: Well they’ve been given no extra money. There are all sorts of arrangements that you can discuss within the embrace of the agreement, but no extra money.

JOURNALIST: Were those available to other states?

HOWARD: Well my advice from the Health Minister is that what was agreed with the ACT was within the embrace of the agreement.

JOURNALIST: So those sorts of things were available to other states?

HOWARD: Yes, my… well obviously if it’s within the embrace of the agreement, if they sign the agreement.

JOURNALIST: Prime Minister, what will happen now with the plan to reform the energy market that was on the agenda?

HOWARD: Well we never got to that, and we never got to talk about indigenous child protection. And as they got up to walk out, I said to Mr Carr – what about indigenous child protection? And he said, oh well you know our position on that. Well, I mean I think this is deplorable and as a social issue it’s very much at the top of the agenda. As you know, I had a major meeting here in Canberra some weeks ago and it’s something that’s very important. And I think it’s pretty lamentable behaviour that the Premiers of the states of Australia should walk out on a discussion of indigenous child protection, aspects of counter-terrorism, energy market reform – those three things alone – the national bushfire inquiry. I mean they are themselves by that behaviour making a mockery of COAG. They seek to be part of the national planning strategy – which is fair enough, they’re heads of government – but they pass up what few opportunities there are. And to walk out before issues like indigenous child protection and bushfire inquiries and aspects of counter-terrorism and energy market reform, before those things are discussed, is a failure of leadership on their part.

JOURNALIST: [inaudible] politically the first shots of the forthcoming federal election campaign, and if so, who do you think won the first round?

HOWARD: Well as you know Mr Walker, even a long way from elections, I’m not a commentator. I’m an advocate. Other people will make judgements about that. I don’t know whether it was the first shot of an election campaign or not. I thought it was a petulant political stunt.

JOURNALIST: [inaudible] topic of the next federal election?

HOWARD: I think health is an issue. I don’t know whether it will be the top issue. But health is always an issue in election campaigns. It’s a very important issue. And one of the observations I made to the Premiers today was that we had a number of initiatives designed to reform the system and to make it work better and they were being cynically blocked in the Senate by their political colleagues, and if they wanted to make a contribution to the national good, they might pick up the phone and suggest the Senate let the legislation through. I mean, people talk about bulk billing. We’ve got some measures to improve bulk billing levels and they’re being blocked in the Senate by the Labor Party at a federal level, yet at a state level their mates are complaining about the alleged deleterious impact of bulk billing rates on the funding of public hospitals. That is breathtaking cynicism.

JOURNALIST: Prime Minister, why does an issue like health funding have to be dealt with on a take it or leave it basis, when you point to water as demonstrating what can be achieved on a cooperative basis between people of different political faiths?

HOWARD: Well Jim, the water issue is not something that has a long history to it. It’s an adhoc issue that has arisen, and you’re dealing of course with a much smaller amount of money. There is a difference Jim between $200 million and $42 billion.

JOURNALIST: That might suggest that perhaps this is something where cooperation is even more…

HOWARD: No, no, I think the more money that is at stake, the more likely it is that State Premiers will be eager to get hold of it.

JOURNALIST: Mr Howard, on indigenous violence, were you hoping that the states might match or contribute some funding to the $20 million that the Commonwealth…

HOWARD: Well I hoped they would but I didn’t even have an opportunity of raising that. But our money has not been made available conditional on their matching it. We’ll make that money available whether they match or not. But I just make the point – we didn’t even get to discuss it. Mr Carr was on his feet halfway out the door responding to my question about it.

JOURNALIST: Prime Minister, the Premiers have indicated they are broad in support of the energy market reforms. Can you sign off on those without having another meeting?

HOWARD: Well I’ll have to look now at where we go on that, but I mean we have lost precious months by this silly stunt.

JOURNALIST: Mr Anderson, [inaudible] to save the Murray. Is this $500 million package just for the next five years?

ANDERSON: Can I make it very plain, because that’s an important point, that what we have not done today is to blow out of the process… out of the water – excuse the pun – the very process that I am saying is critical to us getting it right. In relation to the Murray, you’ve got a process called the living Murray, under which a lot of scientific work is being done. When the science has been done, there needs to be proper consultation with the stakeholders. It will then need to go to governments – all of this to effective governments – to make some very hard, and they will be hard decisions, on what is actually needed. We plainly will have that information and be able to work through what is required by about the time I would think of the next COAG and certainly in time for the beginning of the money flowing. But we’re not preempting the process. We don’t know yet what the best advice will be on what’s needed and how best to get there. And can I just make this point again – you want to get this stuff wrong, you want the stalemate that we’ve had up to date, has farmers and water users on the one hand say they can’t work with uncertainty, and the community says we’re not getting there quickly enough – short-circuit the very process we’ve now put in place, which is to do it properly. And let me give you this interesting example from Queensland, who are not contributing to this because they’ve sorted out the last of their water problems. They had one on the lower Balonne. They had an extraordinary solution which was to cost $100 million to close down one farm. All the locals knew it was the wrong solution. We got the scientists in to work with the farmers and they came up with a solution that doesn’t cost the taxpayers anything, but delivers the desired environmental outcomes at the same time as it saves the production basis of that district.

JOURNALIST: [inaudible] pumping you know 100 megalitres into the Murray, until you come up with this proper science?

ANDERSON: Well why would you actually do something until you had the nation’s most capable people telling you what’s the best way forward – whether it’s in water savings initially or whether it happened to be in environmental flows. I understand it’s important but we’ve had a stand off that’s gone on for years and years and years because you haven’t had a decent framework, some decent architecture in place. Now you’ve got a situation where responsible environmentalists, scientists, politicians, bureaucrats, everyone’s saying that with a proper framework, proper scientific and agreed basis for decision making, decent consultations, you can break these log jams. The fact that there’s money on the table tells you that everyone’s serious. But let me make this other observation, I have long wanted treasuries involved in this because they will bring about the intellectual rigour to ensure that we make wise and informed decisions that strike the right balance between economic and environmental outcomes when we have to make choices about the environment. You can’t have it driven by one side or the other, there must be balance and that’s where we’re getting to now and you know I know everyone wants to move immediately on the living Murray but there’s no done deal, we’re not short circuiting the good faith process that we’re trying to set up with people in that valley, we know that those issues that people are worried about must be addressed, the Australian community’s right to want us to move to sustainability but we’ll sure as hell get there a lot faster now because we’re doing it properly, the idea of throwing a building up without bring an architect in to design it first and then working out how you’re going to treat all of those who are involved, the sub-contractors, the plumbers, the builders, the whatever, will guarantee you a building that just falls over. Well that’s what we’ve had for a decade, this time we can get it right.

JOURNALIST: … cotton Mr Anderson?

ANDERSON: Can I say to you that everyone focuses on cotton and rice, to be quite frank about it the most poorest return is from open flooding of pastures, low value pastures. So again you see, with all due respect, you go immediately to cotton because that’s emotive. I think what I would say is firstly that this gives us a process for determining what levels of water usage are genuinely sustainable, fair transition pathways to get there and then a properly designed, and we haven’t tried to do that today, trading system, we’ll work out where the water should go and which industries on a far better and fair and more economically sustainable basis than a bunch of officials trying to double guess.

JOURNALIST: Prime Minister, is there any point to have meetings like today, heads of government meetings like you had today with a broad agenda? Or do you think it would be better just to have individual meetings, meetings on individual topics?

HOWARD: I don’t think there’s any set pattern to it Dennis. When you get a group of people determined engage a political stunt no matter what the agenda is it’s going to happen.

JOURNALIST: Prime Minister, your letter to Sir Michael Somare, does Papua New Guinea now have to accept that it’s going to be dealing with a tougher Australian approach…

HOWARD: You’re talking about the letter…


HOWARD: Yes. Well I think it’s important to say that he has indicated to the new PNG Prime Minister that the Foreign Minister will be coming to Port Moresby, or going to Port Moresby to discuss the future of the economic and aid relationship and the political relationship between PNG and Australia. It will also be a close and constructive and helpful relationship but obviously we have some views to put and Mr Downer is the right person to put them.

JOURNALIST: Are you worried that if you go too tight though on that issue…

HOWARD: I think we just take it step at a time.

JOURNALIST: Prime Minister, any comment on Jana Pittman’s success?

HOWARD: Oh I think it’s a marvellous race, I saw the last bit of it on early morning news, I congratulate her and she’ll certainly be the toast of the country over the weekend.

ANDERSON: Ditto. Since I was asked this morning and said I wasn’t talking about anything except water, on that one I’ll say ditto.

HOWARD: Thank you.

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Malcolm Farnsworth
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