Thursday, 3 December 2020
Northern Australia Agenda Select Committee; Report
That the Senate take note of the report.
In the time available I'll make a relatively short contribution on this report. For those listening at home, the Senate inquiry into the effectiveness of the Australian government's northern Australia agenda commenced very early in this term. It was always intended to be a fairly long running inquiry to give the Senate an opportunity to review just exactly how the government's northern Australia agenda is progressing. What we've done today is table an interim report of the committee. The intention is that the final report of this committee will be tabled at the end of March next year. Like every inquiry that's been conducted over this term, this inquiry has, of course, been disrupted by COVID-19, particularly with the limitations on travel. That's been especially an issue for this inquiry, given that, by its very nature, it involves travelling and hearing from people in some of the most remote parts of this country. Of course, that hasn't been possible as much as we would have liked this year, which is the reason for the extension of this inquiry into next year. But, notwithstanding that, today's interim report, I think, does make some important recommendations to the government about how it can improve the performance of probably its key funding mechanism for the northern Australia agenda, which is the Northern Australia Infrastructure Facility, the NAIF. I'll come back to that, shortly, and what the committee has recommended for the NAIF.
I want to put on record my thanks to the other committee members: Senator McDonald, the deputy chair of the committee; my colleagues from Labor, Senators McCarthy and Dodson; and Senator Roberts, Senator Siewert and Senator Dean Smith. Again, travel limitations have made it a little bit difficult for people to participate in all the hearings, but I do appreciate the efforts that everyone has put in. I do want to thank everyone as well for reaching a unanimous position in this interim report. That's, obviously, not always possible, so I think we've handled ourselves very maturely, and no doubt we can continue to do that in the course of this inquiry. Can I also thank the secretariat, who worked very hard over this inquiry on the logistics and, of course, the preparation of this report. We do all very much appreciate your efforts and your beavering away to get this report done behind the scenes.
What we have achieved to date are a number of hearings in Darwin, Townsville, Mount Isa, Mackay and Nhulunbuy in Arnhem Land. Over the last few months, particularly since COVID hit, we have made a point of this inquiry continuing and have undertaken a number of hearings by teleconference so that we do keep it progressing and we continue to hear from witnesses.
As I said, the decision we made was that the interim report should focus on the NAIF, partly because it is the only funding mechanism that is within the portfolio of northern Australia and partly because it is a body that has, in my view, attracted quite a lot of deserved attention and, in some quarters, criticism. Also, the government themselves were conducting a review of the NAIF over the last few months, and we thought it important that the committee did bring down an interim report to provide some recommendations to government which they can hopefully listen to and act on when it comes time to legislating some changes to the NAIF.
I do want to recognise that the northern Australia minister, Mr Pitt, has already announced that there will be a number of changes made to the NAIF, which is very welcome, from the point of view of both the opposition and, I think, the committee as a whole, given the recommendations that we've made. We haven't seen the legislation yet, but, certainly, what I've seen from the minister does look encouraging. It does seem that the government recognises that there are some pretty significant changes that need to be made to the NAIF so that it does work effectively, so that it does get money out the door and so that it does build the projects and create the jobs that it was intended to. It's well known that I have been a very strong critic of the NAIF up until now. As I made clear at the Developing Northern Australia Conference in Rockhampton last week, my criticism is not of the officials of the NAIF or its board members. I think it has lacked political direction and political leadership, and I am pleased to see some of these changes that the minister is now flagging.
As I have said before, I just don't think it's acceptable that, five years after this body was first announced, we see only $218 million of its $5 billion budget having actually been released to fund projects. That's less than 5c in the dollar released five years after this body was first announced. We of course hear from the government on a regular basis that the NAIF has approved funding of over $2 billion for projects, and that's very good, but what they never want to accept and acknowledge is that the amount of money that's actually flowing out the door is considerably less than that—$218 million. What that really means, not just in numerical terms, is that we've got billions of dollars of lost opportunities for northern Australia, which is particularly important now as we are in recession and as we're starting to recover from COVID.
Again, as I made clear in my speech to the Developing Northern Australia Conference last week, there are some incredible opportunities in northern Australia as we recover from COVID. There's renewed interest in decentralisation and in people moving out of big cities, particularly in the southern states, which have borne the burden of COVID-19 and its lockdowns. I was in Darwin a couple of weeks ago, and people are really excited about the fact that the population there is increasing for the first time in some time. You can actually feel a bit more energy and optimism in places like Darwin than we have seen for some time. So it is important that the government takes this opportunity that we've been given through COVID, where people are thinking about things differently, to really drive this Northern Australia agenda home and deliver on its expectations.
This report makes a number of recommendations as to how the NAIF can be improved. These recommendations go beyond the changes the government has already flagged. The report acknowledges the changes to the NAIF that the government has flagged and congratulates it on doing so. But the committee as a whole does think there are some other amendments and changes that could be made to the NAIF.
The recommendations include broadening the eligibility for the NAIF to allow for funding of smaller projects and a broader range of industries. A main piece of feedback that I've received, both through the inquiry and on separate work as the shadow minister, is that one of the problems with the NAIF is that, up until now, it has focused on the funding of large projects, in the tens of millions of dollars or hundreds of millions of dollars. While there are some projects of that scale kicking around in northern Australia and seeking financing, there are a lot more projects that are much smaller in nature but do need finance through this government facility and have found it very difficult to access that funding through the NAIF. So we are recommending in this report that the NAIF have a good look at its eligibility criteria and its focus to make sure that it is paying enough attention and providing enough support to those smaller projects.
We've also recommended that the government consider converting some of the NAIF's funds to grants, equity stakes and guarantees. That would, of course, have fiscal implications for the government, and that's why we have simply recommended that they consider doing so, rather than outright recommending it. But, again, the evidence the committee has received does suggest that converting some of these funds to grants, equity stakes and guarantees would provide a better funding vehicle for those small-scale projects I was talking about but also, in particular, projects being led by First Nations communities. I have said before that, given the proportion of the northern Australian community who are from First Nations communities, given the higher levels of disadvantage we continue to see in First Nations communities and given the fact that, in the Northern Territory alone, 50 per cent of the land is Aboriginal owned, we have to make sure that the interests of First Nations people are at the centre of the Northern Australia agenda, and the NAIF has a role to play in delivering that as well. There are other recommendations we've made in this report, such as ensuring that NAIF funded projects do a better job of buying locally and of sourcing labour locally so that we do see that local spin-off out of NAIF projects. We have continued to recommend that there be greater transparency and accountability from the NAIF in relation to things like the bonuses it pays.
All in all, what we're saying in this report is that the NAIF is a worthwhile institution that needs to get moving. We hope this will happen. I seek leave to continue my remarks later.
Leave granted; debate adjourned.