Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Hansard source

I rise to speak on the Northern Australia Infrastructure Facility Amendment (Extension and Other Measures) Bill 2021. Labor has a long history of supporting development in northern Australia. In fact it was Labor that appointed the very first Minister for Northern Australia, under the Whitlam government. The governments of Chifley, Curtin, Whitlam, Hawke, Keating, Gillard and Rudd have all contributed heavily to the development of northern Australia. More recently we supported the 2015 report, Our north, our future: white paper on developing northern Australia and the initiatives in it, including the star of the show—the $5 billion Northern Australia Infrastructure Facility, better known as the NAIF. It was clear at the time and remains obvious now that the north, which has been neglected for so long, needed a leg-up to achieve its full potential. While Labor supports the northern Australia agenda and the NAIF, that doesn't mean we shouldn't look at ways to improve it. It is the job of an opposition to scrutinise government policy, hold it to account for its failings and suggest improvements. When it comes to the NAIF, for many years we have been making many constructive suggestions about how it can be improved.

Rarely have we seen a program that has so wholeheartedly failed to deliver what was promised. That is from a government that is notorious for making announcements that it doesn't deliver. The fact is, the NAIF is shamefully behind schedule and has woefully underdelivered on what the Morrison government promised it would do. It must be an embarrassing day for the government to have to come cap in hand, admitting that it has wasted five years, and ask for more time to get the NAIF working. It's a bit like a student back at school having to ask for an extension on a class project because they spent too much time talking about what they were going to do and showing off in class, rather than sitting down and getting it done. In fact, the NAIF has been such a flop it's now widely referred to as the 'no actual infrastructure fund'. While I know it's a big disappointment to people on the other side of this chamber, it's even more of a disappointment to communities in the north who were once excited by the opportunities it promised.

For those who haven't had the pleasure of spending time in northern Australia, the region is vast and geographically remote, but it's also home to a number of world-class leading businesses and industries. It is bursting at the seams with opportunities in traditional industries like agriculture, mining and tourism, and in emerging industries like renewables, hydrogen, tropical science and many other things.

As outlined in the government's northern Australia agenda, the NAIF was supposed to offer loan support to projects across Northern Queensland, Western Australia and the Northern Territory as an alternative to traditional bank loans. We know that it can be tough to get business loans in remote regions, and sometimes traditional banks don't appreciate the value of out-of-the-box innovation—the kind we want to see more of in the north. There are organisations from Townsville to Darwin and across to Karratha and everywhere in between that are leading the world with innovations in mining, agriculture, health, education and sustainability. These smaller unique projects which have had a hard time getting a bank loan were hoping to find a partner in the NAIF. Unfortunately, for many this hasn't proved to be the case to date. That's because, in the six years since it was announced, the NAIF has comprehensively failed to deliver what the government promised.

If there's one thing this government is good at, as I say, it's making an announcement. Any time there's a headline to be had, there they are, ready to cut a ribbon. But there's a long way between announcement and delivery, and this government seems to drop the ball every time. The NAIF, sadly, has become just another example of this habit of the Morrison government. We see media release after media release about projects the NAIF has approved or how much they say they'll spend from the NAIF. But when you look at how much has actually got out the door and into communities it's a completely different story. As I mentioned before, the NAIF is so shamefully behind schedule that it has now had to ask for more time to get the job done.

When the coalition government established the NAIF, it promised to invest $5 billion in five years. Instead, now it's expected to take double that or maybe even more. When the NAIF appeared before Senate estimates at the end of March, it revealed that, of its $5 billion budget, only $314 million had actually been released. That's about six per cent of its budget that has been released after five years. In my home state of Queensland, the NAIF has released only $56.7 million. I really think that people in North Queensland and northern Australia generally would have thought they'd see more come out of the NAIF by now. As I say, it means that, at this point in time, only six per cent of funding has got out the door in the time in which 100 per cent of the budget was supposed to be spent. So there's still 94 per cent of the NAIF's funding to get out the door and into northern Australia. At this rate, it will take nearly 80 years to release the full $5 billion that was promised to northern Australia via the NAIF. That money is no good sitting in a Canberra bank account. We need to get those funds out to businesses in northern Australia so that they can start building infrastructure, employing locals and improving services in the north.

It's good that the Morrison government will have more time to fix its mistakes, but with this track record it's fair for communities to be sceptical about the government picking up its act. Even when the NAIF does approve a project for funding, this government's prejudices are blocking it from proceeding. Only last week it was revealed that the Minister for Resources, Water and Northern Australia, Minister Pitt, had personally intervened to veto a NAIF loan to a $380 million renewable energy project near Cairns in Far North Queensland. The NAIF board had approved this project. They'd finally found a project that was worthwhile to invest in. It was going to create jobs and do lots more for North Queensland. But Minister Pitt quietly overturned it. This is, as I understand it, the very first time a minister has used this power. Minister Pitt told the head of the NAIF, via a letter, that the approval of this project was inconsistent with the aims of the federal government. Killing a $380 million project and the jobs that it would have brought to Far North Queensland is a new low for this government. This project would have delivered 250 jobs in North Queensland as well as delivering more reliable and affordable power, which would have actually generated more jobs in more industries.

Far North Queensland economies have been hit particularly hard by the COVID pandemic, especially with the closure of international borders. Now is not the time to be ripping the rug out from under new jobs for locals. This is an embarrassing move by this government. Its own prejudices against renewable power and the jobs it can create have led to it overturning a NAIF-approved loan to a company. It is embarrassing that we've got a minister who will put his own prejudices ahead of the region that he claims to represent. It's embarrassing that we've got a minister who would rather stick his head in the sand than fund good, clean, cheap energy projects that could deliver jobs to regions that need them. I might say, I look back on the fact that when Senator Canavan was the Minister for Northern Australia he at least allowed funding for solar farms and other renewable projects to go ahead. In fact, the biggest loan that the NAIF has approved is for a renewables project in North Queensland. But it would seem that under Minister Pitt that kind of thing has no future because of his own prejudices against those kinds of projects. It is a deep shame, and it's people in Far North Queensland who are missing out.

When these NAIF powers were introduced to the parliament, it was claimed that they would only be used to ensure that projects contrary to the national interest would not be funded. Ripping the rug out from under 250 energy jobs in Far North Queensland is not in the national interest. This government's prejudice against renewables is costing jobs and lower power prices and is holding regional Australia back. The NAIF is plagued by enough problems in getting money out the door, without having to manage a minister who quietly goes around knocking off projects that he doesn't like.

As I mentioned earlier, Labor has been making constructive suggestions about what can be done about the NAIF for a number of years now. While the decision to overhaul the NAIF via this legislation is encouraging, the fact is this government has had to be dragged kicking and screaming to do it. I've said before that it's easy to lose count of how many reviews and rehashes of programs the government has announced for northern Australia in the last few years. It's taken four reviews in as many years, two Senate inquiries and countless calls from Labor for the government to agree to make any changes to the NAIF operations. All of this inaction has meant people are still waiting to get any real results—that's if they haven't already given up and taken their projects interstate or overseas.

Finally, at the end of last year, the Morrison government agreed to come to the table on some long-overdue reforms. Labor hopes, when implemented, these reforms will be a step in the right direction. However, after the games we saw from Minister Pitt last week, Labor will be putting forward some amendments of our own to safeguard the NAIF from ideological whims of the minister of the day. People in northern Australia can't afford to see the next five years roll by and still be no better off. Scott Morrison, the Prime Minister; and Keith Pitt, the minister, must stop talking about it and start getting money out the door.

Looking at the legislation as it has been proposed by this government, Labor supports the proposed extension of NAIF for another five years, beyond its current expiry of 30 June this year to 30 June 2026. I've spoken to business, community leaders and others in the north about this, and many still hold onto the hope that the NAIF can fill an ongoing market gap in accessing finance in the region. There are project proponents interested in seeking funds through the NAIF. Let's hope the government makes better use of the next five years and gets behind them.

Labor also supports the proposal to expand the activities eligible for financial assistance beyond the construction of northern Australia infrastructure to the development of northern Australia economic infrastructure. This change is consistent with much of the feedback received by the Senate inquiry into the effectiveness of the Australian government's northern Australia agenda—that the NAIF should support more smaller projects. The inquiry repeatedly heard from stakeholders across the north that the NAIF was not accessible to smaller projects, and, while big ticket infrastructure projects are always important, often smaller projects have the largest impact on communities in the region.

This legislation will also allow the NAIF to lend directly to project proponents, rather than directing funding through state and territory governments as it currently does. The biggest criticism of the NAIF, both from Labor and people in the north, is the length of time that it takes to get money out of the door to projects. Labor wants to see the money hitting the ground faster, and hopefully simplifying the administrative processes will assist this. I might just say that, in reaching our position on this bill, we have consulted the Queensland, Northern Territory and Western Australian governments, none of whom have any issue with being taken out of the process of NAIF loans being forwarded. As I say, we hope that that move will increase the speed at which the government can get money out the door.

It's important to acknowledge the concerns raised by environment groups that these changes would remove the ability of state or territory governments to block a project that may have adverse environmental impacts; however, as I say, the three relevant state governments as well as many other groups across the north have given this change the green light. In addition, any project considered by the NAIF would still have to meet existing federal, state or territory environmental and other regulatory processes, and the NAIF Act retains the prohibition on a minister directing the NAIF to fund a particular project.

Something that Labor has been calling for, for years now, is for the NAIF to broaden the types of financial assistance available to provide to projects. Currently, the NAIF only provides loans. This bill proposes that in addition to loans the NAIF offers letters of credit, purchase of bonds, guarantees in equity investments. These investment options are consistent with other government financing bodies such as the Clean Energy Finance Corporation. This change could have a massive positive benefit, especially for smaller projects and those led by First Nations communities, which historically have had a much harder time receiving NAIF assistance. As of 25 March this year only two First Nations projects have reached the investment decision stage with the NAIF, and together these two projects only represent one per cent of the NAIF's total funds. This is just not good enough, and it's led to one of the amendments that Labor will be proposing to this bill.

I'll just very briefly touch on the amendments we're proposing, because we'll have an opportunity to talk to them at more length later on. Labor has been calling on the government and the NAIF to work on having greater engagement with First Nations communities on the development of northern Australia. The bill attempts to address this by including experience in economic development for Indigenous communities in the list of fields of expertise sought for the NAIF board. Labor supports this change, but we do not believe that this goes far enough. First Nations communities are such an important part of northern Australia but are often completely left out of the discussion by this government. To really address the challenges First Nations projects face in accessing the NAIF, Labor would like to see a dedicated position on the NAIF board for a First Nations representative. Both the Indigenous Land and Sea Corporation and Indigenous Business Australia require First Nations members on their boards. We don't believe the NAIF should be any different.

Labor would also like to see the Indian Ocean territories included as part of northern Australia. My time is running out, so I'll come back to that at a later point. A further amendment that we are proposing, which is particularly important in light of Minister Pitt's actions, is to encourage the NAIF board to support projects that help Australia achieve net zero emissions by 2050, something that will create jobs and help our environment. There are a range of other amendments that we'll be putting forward, but I'll talk to them later. I also want to flag that I'll be moving a second reading amendment in my name, circulated on sheet 1284.