HON. WAYNE SWAN MP
FEDERAL MEMBER FOR LILLEY
ADJOURNMENT DEBATE (NORTHERN AUSTRALIA INFRASTRUCTURE FACILITY)
MONDAY 27 MARCH 2017
***CHECK AGAINST DELIVERY***
Thank you Deputy Speaker,
Tonight I rise to speak about the Northern Australian Infrastructure Facility or NAIF.
I have always strongly supported the concept of an Australian Government investment corporation to fund critical economic infrastructure and I have had a passionate commitment to investing in infrastructure in Northern Australia.
With the State Government and Townsville enterprise, I strongly pushed for the CopperString Project and made a substantial budget allocation of $355 million for it.
Unfortunately, that project was torpedoed in the Abbott Government’s 2014 Budget.
I support the concept of a NAIF.
At a time when economic growth is depressed across the developed world, organisations like the IMF have emphasised the need for countries like Australia (who have fiscal space) to use the government balance sheet to invest in infrastructure and boost economic growth.
Our future economic growth requires investment in productivity enhancing assets, particularly infrastructure, in an efficient and disciplined way.
Rating agencies and the public are increasingly focusing on what government debt is funding – investments that generate a positive long term return are increasingly preferred to debt that funds grants or recurring expenditure.
The Australian Government already has the Clean Energy Finance Corporation which is immensely successful.
The CEFC’s governance and policies have proven the gold standard of government finance bodies.
In comparison the NAIF looks as dodgy as Lehamn Brothers. We all know how that ended.
Compare the investment mandates. The CEFC must operate with a portfolio benchmark return of the 5 year Australian government bond rate plus 3 or 4 per cent per annum over the medium to long term.
The NAIF doesn’t have a requirement for a positive return. The Board only needs to be satisfied that the government can be repaid or the investment can be refinanced.
And we still have no idea how the Board is going to make those decisions. Indeed they have said they had no documentation about this – none! Nor did they have any documentation about how they would be satisfied a project actually needs the loan. The few policies they do have they are keeping secret.
Imagine what the Business Council would have said if Labor had presented such a flimsy investment mandate to the parliament for the CEFC.
There would have been screams of boondoggles and fiscal irresponsibility for Labor mates.
Despite the success of the CEFC, there have been repeated efforts by Abbott and Turnbull to shut it down and there have been attempts to direct its investment from the political level.
The flimsy investment mandate of the NAIF is now how conservatives in this country operate; the Turnbull government wants to turn it into a boondoggle machine in pursuit of its ideological and political pork barreling.
But the NAIF appears to have been intentionally set up without the ability to operate independently, with a board that has been stacked to favour mining investments and with an investment mandate so broad and vague so that Minister Canavan can essentially treat the NAIF as his own private slush fund.
The government has stacked the board with pro-mining persons who are unwilling to assert NAIF’s independence and that is the most alarming aspect of NAIF.
In comparison to the CEFC that has repeatedly (and very publically) fended off government interference and staunchly guarded the independence of its investment decisions, the NAIF has remained entirely silent in the face of enormous political pressure and manipulation.
For months Ministers Canavan and Joyce have repeatedly promoted a $1 billion loan to Adani to partly fund the Carmichael coalmine railroad - while simultaneously claiming that investment decisions of the NAIF are independent.
If the Adani mine is to go ahead it must be able to stand on its own merit. It should not get one-fifth of Minister Canavan’s slush fund to help make it a profitable investment.
That is one billion dollars that is being taken away from renewables, or tourism, or telecommunications, agriculture, and the jobs that these industries can create.
North Queenslanders deserve an investment fund that provides the long-term certainty and job creation they desperately need.
If the NAIF is to serve its stated purpose it must be given independence and integrity over its investment decisions.
Given the Coalition’s apparent willingness to set the NAIF up so that it risks becoming little more a publicly funded slush fund for the Liberals, I have written to the Auditor-General requesting that he investigate the governance and operations of the NAIF.