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

I move:

That this bill be now read a second time.

This bill makes important updates to the Northern Australia Infrastructure Facility Act 2016 ('the NAIF Act') to ensure that the Northern Australia Infrastructure Facility ('NAIF') can continue to support economic growth, job creation and investment across the north in a stable, reliable and accountable way.

Because a strong north means a strong Australia.

The bill proposes four key amendments.

This bill extends NAIF's statutory investment decision-making window by 10 years, from 30 June 2026 to 30 June 2036 at section 8 of the NAIF Act.

Under the current legislation, NAIF would be prohibited from making investment decisions after 30 June 2026. This amendment responds to the recommendations of the 2024 statutory review of the NAIF Act and preserves the facility's capacity to continue investment in transformational projects across Northern Australia.

This is a practical measure that provides certainty to investors and project proponents. It ensures that NAIF, after having already delivered commitments exceeding $4 billion supporting economic development in Northern Australia, remains a reliable source of development finance well into the future.

The bill strengthens accountability in relation to NAIF's investment mandate by inserting new provisions into section 9 of the NAIF Act. These provisions will require the NAIF board to notify the responsible ministers when NAIF or a subsidiary fails to comply with the investment mandate and enables the responsible ministers to direct the board to take corrective action. Further, the bill will confirm that noncompliance with the investment mandate does not affect the validity of NAIF transactions.

These amendments strengthen NAIF's governance framework and reflect recommendation 8 of the 2024 statutory review of the NAIF Act, which emphasised the importance of legislative certainty.

The amendments ensure that inadvertent noncompliance cannot undermine financing arrangements or the confidence of project proponents and financiers.

This approach is consistent with comparable legislation establishing other Commonwealth specialist investment vehicles, including the National Reconstruction Fund Corporation Act 2023.

The bill will ensure the NAIF Act aligns with current administrative arrangements for specialist investment vehicles with respect to the role of the Minister for Finance. The addition of the Finance minister to the ministerial responsibilities set out in several places throughout the act will ensure an appropriate level of oversight and accountability consistent with arrangements for all such Commonwealth vehicles.

Finally, the bill updates the statutory review requirements in section 43 to provide for future reviews of the NAIF Act as soon as practicable after 30 June 2029 and 30 June 2034. The amendments clarify that the first review (after June 2029) will not consider extending the investment decision-making timeframe, whereas the second review (after June 2034) will.

This ensures parliament receives structured and timely evaluations of the operation of the NAIF Act during its extended investment period.

Northern Australia is a vast and extraordinary place, rich in resources with remarkable people and communities.

Yet it faces challenges that are unique to Australia's north, including great distances, transport, infrastructure, a lower population than southern Australia, and the challenges of that wonderful tropical climate, with cyclones, storms and floods.

That is why NAIF is so important.

The Northern Australia Infrastructure Facility helps overcome those challenges by supporting finance for projects, helping to remove some of the risk for projects and commercial investors.

NAIF also supports our government's wider northern Australia agenda, driving sustainable development, creating jobs, supporting First Nations communities, building resilient infrastructure, and positioning Australia as a leader in critical minerals.

Since it was first established in 2016, NAIF has become an integral part of the investment landscape across northern Australia.

It has been a catalyst in getting crucial projects off the ground and helping to diversify the economy of northern Australia.

Our government is a strong supporter of NAIF.

In our first budget in 2022, we demonstrated that commitment by providing an extra $2 billion in funding to the facility.

That has given the NAIF a total of $7 billion to invest in economic development, jobs and opportunities across the north.

We have also made sure that NAIF remains fit for purpose.

In our first term, the Albanese government commissioned a statutory review to consider the operation of the NAIF Act.

The government thanks the Hon. Warren Snowdon, the former member for Lingiari; Professor Peter Yu; and Doctor Lisa Caffery for their work on the review.

Their report found overwhelming support for NAIF across government, industry and the public.

Since its establishment, NAIF has now made 37 investment decisions across Queensland, Western Australia and the Northern Territory.

These loans total more than $4.3 billion, and the projects they support are forecast to create more than 18,000 jobs in a range of sectors including infrastructure, agriculture, resources, critical minerals, housing and ports.

NAIF projects are contributing to wider government policy objectives.

For example, in January 2024, NAIF made an investment decision to provide up to $200 million to Arafura for the Nolans Rare Earths Project near Alice Springs in the Northern Territory.

The project aims to develop one of the world's largest deposits of neodymium and praseodymium, which are essential for the permanent magnets used in electric vehicles, wind turbines, robotics and defence technologies.

The finance will support the construction of mining and processing facilities to diversify the global supply chain of rare earths and strengthen Australia's national security.

The project will also deliver significant economic benefits to the community of Alice Springs and the wider Northern Territory. It is expected to generate more than 300 jobs.

Importantly, NAIF's support of Arafura's Nolans Rare Earths Project aligns with, and contributes to, the advancement of the government's Critical Minerals Strategy.

In Queensland, NAIF made an investment decision in August 2024 to provide up to $140 million to Community Housing Ltd and Tetris Capital for the Cairns Seniors Community Housing Project in Queensland.

In partnership with Housing Australia and the Queensland government, the project aims to address the housing shortage in northern Queensland by constructing a purpose-built seniors' community in Cairns.

The project will build 490 dwellings to house around 690 people and will be comprised of 245 social, 223 affordable, and 22 specialist disability accommodation apartments.

The project aligns wholly with the housing policy of the government. It is forecast to create more than 300 jobs across construction and operation across the Cairns region.

In Western Australia, NAIF has made an investment decision worth up to $220 million for the Perdaman Urea Project, supporting what will be Australia's largest urea plant.

The Perdaman project near Karratha is worth $6.5 billion and it is estimated that it will create 2½ thousand jobs during construction and 200 ongoing jobs once operational. Once completed, it will produce approximately two million tonnes of urea per year. It is expected that just under half the urea will be kept for Australia, with the rest to be exported to the Asia-Pacific, Brazil and the United States of America.

The investment decision will create a new multibillion dollar fertiliser industry in Australia. The Perdaman Urea Project is one of the largest downstream processing investments in Australia's history. Starting production in 2027, this investment will ensure Australian farmers have a reliable and secure supply of urea to maintain food production. In turn, this contributes to our food security across our continent.

A smaller investment, but no less important, is the $34 million NAIF loan to the Kimberley cotton gin in Kununurra in northern Western Australia. This cotton gin is a prime example of the impact NAIF is having on regional communities in the north.

The project is forecast to return a public benefit of around $248 million and establish the Ord River Irrigation Area as a major cotton region.

The project is a productivity game changer for the local cotton industry.

Cotton crops can now be processed locally, saving the added cost and burden of sending the cotton hundreds of kilometres away for processing.

The project will be supported by the expansion of port and border services at the nearby port of Wyndham, which will allow exports directly from the region.

While this investment in Kununurra is far from the largest NAIF loan, it is among the NAIF loans with the highest local impact.

The Kimberley cotton gin project demonstrates how the diversity of projects the NAIF backs in supports northern communities in all sorts of ways.

It shows how NAIF is helping to diversify the economy of northern Australia.

The NAIF continues to be a central pillar of the government's commitment to fostering sustainable economic development across northern Australia—supporting infrastructure, unlocking industry potential and helping communities to thrive.

The bill strengthens NAIF's legislative foundation, improves accountability, maintains certainty for investors and ensures the framework remains fit for purpose through the next decade. I commend the bill to the House.

Debate adjourned.