Madeleine King (Brand, Australian Labor Party, Minister for Northern Australia) Share this | Hansard source

I thank the member for Warringah for her participation in this debate and the amendments she's proposed. I will address the second amendment first. The NAIF Investment Mandate contains six mandatory criteria that proponents are required to meet to achieve NAIF finance. Supporting economic empowerment and meaningful engagement with First Nations Australians is a priority shared by the government, and the amendment which the member proposes that the NAIF must first consult First Nations Australians when considering financial assistance is already part of the operation of the NAIF. The NAIF has robust and mandatory mechanisms to achieve this.

Under the NAIF's governance framework, all proponents are required to develop and implement an Indigenous engagement strategy as a condition of financial assistance. The proposed amendment requires NAIF to consult First Nations Australians before providing financial assistance. In practice, NAIF's current requirements already go further than that, because engagement occurs by project proponents, where it can be most effective and specific. Project proponents must demonstrate alignment with community expectations and outcomes before NAIF will consider investment approval, and the Investment Mandate and statement of expectations already require it to support key government priorities, including materially improving the lives of First Nations peoples and communities in northern Australia.

While the government respects the intent behind the amendment, it will not be supporting changes that duplicate or complicate an already effective and well-established framework. The government will continue to ensure that NAIF maintains high standards of Indigenous engagement, supports opportunities for Indigenous economic development and works collaboratively with First Nations organisations, including traditional owners, local Indigenous businesses and land councils.

I'll reflect briefly on the small loans program of the NAIF. It is indeed designed with First Nations communities in mind to make sure they are enabled to get this concessional finance for important projects in their communities.

I return now to the first amendment. The government will be opposing that amendment. In 2024, the government updated the NAIF Investment Mandate to ensure that potential projects aligned with a number of policy priorities. The ones relevant here are sustainability, climate change and circular economy principles and solutions in northern Australia, and materially improving the lives of Indigenous peoples and communities. That refers to your second amendment. The bill strengthens the board's accountability to this investment mandate by requiring that the board notify the responsible ministers if the NAIF fails to comply with that mandate so we can take corrective action.

The statement of expectations, which I provided in December 2022, noted the government's priority to transition Australia's energy sector to net zero emissions by 2050 and that the NAIF has a key role in contributing to this in northern Australia. The NAIF has supported multiple renewable energy projects, as well as including critical minerals projects that are vital for renewable technologies and for national security. The Climate Change Act 2022 introduced changes to the NAIF Act to ensure alignment with Australia's national greenhouse gas emissions targets.

Energy projects are designed to support and strengthen the electricity system on the way to net zero, not as a long-term replacement for renewables but as a stabilising force during the all-important transition, which we support and have legislated. Investment in energy projects assists in supplying electricity to communities where there are shortfalls in renewable generation and prices spike in consequence of that. It's important that any energy transition provides for firming capacity to complement renewables. Grid stability is critical for all communities. Whilst renewable generation batteries and pumped hydro are progressively built right across the country, firming capacity and grid stability help to contain price spikes for households and industry and, of course, make sure people have lights in those communities. So we don't support the amendments, but I do thank the member for her thoughtfulness in this debate.

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