TOM CONNELL: Well, today the Government has announced the latest grant for water infrastructure improvements. This is part of the Murray-Darling Basin Plan, part of their plan to try to improve, effectively, the way water is used and also give some back to the river for environmental flows and I spoke with Simon Birmingham, the parliamentary secretary, just a short time ago.

SIMON BIRMINGHAM: Well, as a Government, we’ve always committed to bridging the gap to see the Murray-Darling Basin Plan fully implemented and to do that we ultimately have to recover some 2,750 gigalitres of water for extra environmental flows. To date, around 1900 gigalitres has been recovered, so there’s still a gap to be bridged and what we’ve promised to do is to bridge that by partnering up with farmers through infrastructure works like this so that we can take the dividend of the water savings, or a portion thereof, and commit it to environmental purposes, rather than what the previous Government did too much of which was just a lot of non-strategic buybacks that takes productive capacity out of farming communities.

TOM CONNELL: Well, just on the previous Government… I mean, if you look at this generally, this is, is it not, continuing along Labor’s framework when it comes to this issue in the way that there are these water buybacks? Would you not say there’s a fair degree of bipartisanship on this?

SIMON BIRMINGHAM: There’s bipartisanship insofar as implementing the Basin Plan is concerned but the change of direction we’re taking is that we are capping the level of water buybacks at 1500 gigalitres, we will instead give priority to infrastructure works where we invest with farmers in making them more water-efficient, we get to take part of the water savings and use it towards those Murray-Darling environmental targets instead and what we’re demonstrating here, by increasing the funding for this program from $100 million to $158 million, is that we’re deadly serious about giving priority to infrastructure and this is the type of program where we get the best bang for our buck in terms of being able to recover the most amount of water through infrastructure partnering, so it’s a very good outcome and it’s a good outcome for farmers and for the environment.

TOM CONNELL: Well, you’ve mentioned here a strategic approach to this. What about, really broadly on that strategy and looking long-term, when you talk about using Australia’s very scarce water, part of this grant is going towards growing rice crops… long-term, is it going to be the best use of Australian water, for things such as rice and cotton… very water-intense… is that really a smart way to use water in Australia in particular?

SIMON BIRMINGHAM: What you’ve got to be absolutely clear of in this space is that you want to have a proper functioning water market and there’s some reforms that date back to the Howard years when water trading commenced and water licensing and entitlements were properly created and we’ve made some recent changes to strengthen the water market in terms of its operation and what that allows is for water licences to be traded between farmers so that ultimately they should flow to the highest-value use. Farmers should decide what they grow on their land with the water that’s available to them and, of course, you would expect them to try to achieve the highest-value outcome. Water has a value, the land has a value, they want to get the best return from those inputs as well as, of course, their labour and so, whether it is rice or cotton, whether it’s grapes or citrus, whatever the type of irrigated agriculture it is, ultimately I expect farmers to make wise investment decisions and make those investment decisions based on what generates the most wealth for them, their community and, ultimately, the whole Australian economy.

TOM CONNELL: So, just quickly on that, if, down the track, there’s some pressure from you… from interest groups within cotton or rice saying they’re being squeezed out, you’re going to point to this as a market mechanism and say ‘so be it’?

SIMON BIRMINGHAM: Well, of course, ultimately, as I say, farmers will decide what they grow on their lands. We are doing, essentially, two things – one is returning the river use to a sustainable level by implementing the Murray-Darling Basin Plan; the other is supporting the proper functioning of the water market, which will allow water to be used for the highest-value outcomes. Now, what it is that farmers choose to grow on irrigation lands is no different to decisions farmers make on any other landscape around Australia – they choose what to plant; they’re running businesses; they just happen to be farming enterprises; they generate great wealth for Australia and, frankly, what we’ve seen in recent years is  a real return to profit for crops like rice and cotton which have benefited from higher commodity prices and show that they have quite a good future in Australia.

TOM CONNELL: Simon Birmingham, thanks for your time today.

SIMON BIRMINGHAM: Absolute pleasure.