TONY EASTLEY: There's a lot of general support for the Federal Government's plan for the Murray Darling system, but the question is now how the Labour Party and the States will respond.

So far the Prime Minister has made the early running, as he's seen to be tackling one of the nation's top environmental issues.

The Federal Opposition has signalled its broad support for Mr Howard's plan, but not without some scepticism.

Opposition water spokesman, Anthony Albanese, told Chris Uhlmann that it made sense to streamline the running of the Murray Darling Basin.

ANTHONY ALBANESE: We're very pleased that the Prime Minister has adopted a number of the initiatives that we've been advocating for some time: the creation of a water minister, the single water agency, extra funding for efficiency, addressing the important issue of over allocation of water entitlements, which the National Party has been strenuous in resisting up to this point.

We want to look at the detail of the proposal, the governance arrangements, funding, before we commit ourselves.

But, the principle of streamlining processes and getting rid of red tape so that water flows rather than bureaucracy, is one that we've been advocating for some time.

CHRIS UHLMANN: Do you believe that the Commonwealth should take control of the Murray Darling Basin, and will you be advocating that to Labor premiers?

ANTHONY ALBANESE: Well we believe there should be a streamlining of process.

We're going to have a look at the impact and the details of this proposal, but we don't have an ideological position that says it should be delivered by the Commonwealth or the States.

We believe though that there should be a streamlining of procedures, and what works best should happen.

And there is clearly a role for national leadership. This is a national water crisis, it does require involvement of the Commonwealth, and we want to also express our view that the Commonwealth should also be providing leadership, not just in the Murray Darling Basin, but for the 17 million Australians who live in our urban centres and our capital cities, who are suffering from water shortages.

CHRIS UHLMANN: Well, there is a $2 billion water fund that will address some of that, and of course they are State responsibilities. And this would free up a lot of money for the States.

ANTHONY ALBANESE: Well, the Commonwealth had to concede yesterday, the Prime Minister at the press club, that less than half of that $2 billion Australian water fund has been spent.

And you have worthwhile projects, such as the Western Corridor Recycling Scheme in southeast Queensland - the biggest recycling scheme in the southern hemisphere. That's worthy of Commonwealth support.

CHRIS UHLMANN: Certainly, but the States have a role in supplying urban water, obviously.

ANTHONY ALBANESE: Of course the States have a role. But we also say that the Commonwealth has a role, and the States are somewhat cynical given the Commonwealth underspend.

CHRIS UHLMANN: So, if you were in charge, you'd just fund the lot?

ANTHONY ALBANESE: No, we would work in a cooperative fashion between the Commonwealth and the States, with the Commonwealth providing that national leadership that's necessary.

And what we wouldn't have is a situation shown in last year's budget, where $337 million was allocated for spending that financial year under the Australian Water Fund, and only $77 million spent, less than a quarter.

We've actually had money going back into the surplus, rather than flowing through to increasing our water supply at this time of national water crisis.

TONY EASTLEY: Labor's water spokesman, Anthony Albanese, speaking there with our Chief Political Correspondent, Chris Uhlmann.