Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Nation-building Funds Bill 2008 (the bill) is part of a package of bills giving effect to the government’s 2008-09 budget announcement to establish three new nation-building funds that will provide significant investment in transport, communications, water, energy, education, research and health infrastructure to strengthen our economy. These new funds build Australia’s infrastructure needs for the future and will assist in addressing Australia’s immediate challenges in response to the global financial crisis, as well as its longer term challenges over the next decade and beyond.

To help shield Australians from the global financial crisis, the government has announced it will fast-track its nation-building agenda. To facilitate this acceleration, this bill and a consequential amendments bill allow for interim arrangements to begin as early as possible, as investment in critical infrastructure can help secure economic activity in the short term and extend growth potential in the medium to long term. The government believes that the Commonwealth has a central role in meeting the nation’s infrastructure needs. The opposition has taken various positions on the importance of a nation-building agenda, appearing to be for it one day only to come out strongly against it the next. For the sake of our economy both in the short and long term, it is of critical importance that the opposition stops playing politics with nation building and facilitates the passage of this legislation by the end of the year. This is required for the funds to be established by 1 January 2009 and for the fast-tracking of infrastructure projects which are a pivotal part of the government’s Economic Security Strategy.

The government is committed to implementing an infrastructure investment program, allocating funds for transport communications, energy, water, education and health. This year, the government will contribute:

• a total of $12.6 billion to the Building Australia Fund for transport, communications, energy and water, infrastructure, including proceeds from the T3 sale and the balance of the Communications Fund;
• a total of $8.7 billion to the Education Investment Fund for education infrastructure, including the balance of the Higher Education Endowment Fund; and
• $5 billion to the Health and Hospitals Fund, for health infrastructure.

This is an infrastructure program of historical proportions.

The government has committed to making future allocations to the funds as budget circumstances permit.

Where the funds are used to finance capital projects in the states and territories, funding will be distributed through a new Council of Australian Government (COAG) Reform Fund, which the Treasurer is establishing through the COAG Reform Fund Bill 2008, another component of this package of bills.

The nation-building funds will utilise the investment framework that has been established for the Future Fund. The Future Fund Board of Guardians will manage the investments of the funds.

Spending from the funds on specific projects will be subject to rigorous evaluation by independent advisory bodies.

In view of the government’s commitment to strengthen the Australian economy in the face of the global financial crisis, this bill and a consequential amendments bill allow for interim advisory bodies for the Education Investment Fund and the Health and Hospitals Fund to be established as soon as possible. These interim bodies will provide a report to government in December.

For the Building Australia Fund, the government has previously indicated that Infrastructure Australia, the independent statutory council headed by Sir Rod Eddington, will produce an interim report in December on a National Infrastructure Priority List.

The advisory bodies will assess projects against evaluation criteria which are being developed by portfolio ministers. Interim evaluation criteria are also being developed to allow work to commence as soon as possible.

Consistent with the government’s Economic Security Strategy to strengthen the Australian economy in the face of the global financial crisis, the bill permits me, as finance minister, to determine a drawing rights limit for spending from the funds covering the period up to 30 June 2009. This will enable work in key infrastructure areas to commence before 1 July 2009. To apply rigour and transparency to spending from the funds prior to the 2009-10 financial year, the determination will be made in writing and tabled in the parliament.

The funds will be established as ‘special accounts’ in the Consolidated Revenue Fund, meaning that any amounts credited to the funds represent amounts that have been appropriated and clearly committed for future expenditure on infrastructure.

From 2009-10, the government will consider proposals as part of the budget process. Transparency and scrutiny for payments from the 2009-10 financial year onwards is provided by the government including a general drawing rights limit in the appropriation acts. The general drawing rights limit will restrict the total amount that may be paid out in a financial year to support relevant infrastructure expenditure. This is intended to provide the parliament with a mechanism by which it may oversight the rate at which the amounts are being expended for investment in infrastructure.

Portfolio ministers will be responsible and accountable for payments made from the funds in relation to projects brought forward within their portfolio responsibilities, which is consistent with the usual Commonwealth financial management arrangements. Importantly, it will allow for portfolio ministers to be responsible for the delivery of projects, including the meeting of project milestones.

With this bill, we begin a new era of investing in Australia’s short-, medium- and long-term needs. These funds are important to address the challenges Australia faces. The funds demonstrate the government’s commitment to building the nation’s capabilities.

The funds provide a crucial financing source for investment in critical nation-building infrastructure needs.

This is a government that responds quickly at a time of global financial crisis. We intend to invest and build for the future.

I commend the bill to the House.

Debate (on motion by Mr Lindsay) adjourned.