Wayne Swan (Lilley, Australian Labor Party) Share this | Hansard source

Tonight I rise to speak about the Northern Australia Infrastructure Facility, or NAIF. I have always strongly supported the concept of an Australian government investment corporation to fund critical economic infrastructure, and I have a passionate commitment to investing in infrastructure in northern Australia.

With the state government and Townsville Enterprise, I strongly pushed for the CopperString Project and made a very substantial budget allocation of $355 million for that project. Unfortunately, that project was torpedoed in the Abbott government's 2014 budget.

As I said before, I strongly support the concept of the NAIF. At a time when economic growth is depressed across the developed world, organisations like the IMF have emphasised the need for countries like Australia, who have fiscal space, to use the government balance sheet to invest in infrastructure and boost economic growth.

Our future economic growth requires investment in productivity-enhancing assets, particularly infrastructure, in an efficient and disciplined way. Ratings agencies and the public are increasingly focusing on what government debt is funding. Investments that generate a positive long-term return are increasingly preferred to debt that funds grants or recurrent expenditure.

The Australian government already has the Clean Energy Finance Corporation. That corporation is immensely successful. It was set up by the Gillard government, with me; the climate change minister, Mr Combet; and Penny Wong, the finance minister; we were enormously proud of its investments. But the CEFC's governance and its policies are a proven gold standard of government financing bodies.

In comparison, the NAIF looks as dodgy as Lehman Brothers. And we all know how that ended.

Compare the investment mandates. The CEFC must operate with a portfolio benchmark return of the five-year Australian government bond rate, plus three or four per cent per annum over the medium to long term. The NAIF does not have a requirement for a positive return. The board only needs to be satisfied that the government can be repaid or the investment can be refinanced. And we have no idea how the board is going to make those decisions. Indeed, they have said they have no documentation about this—none! Nor do they have any documentation about how they would be satisfied that a project actually needs a loan. The few policies they do have they are now keeping a secret. Just image what the Business Council would have had to say if Labor had presented such a flimsy investment mandate to this parliament for the Clean Energy Finance Corporation! There would have been screams of 'boondoggles' and 'fiscal irresponsibility' for 'Labor mates'.

Despite the success of the CEFC, there have been repeated efforts by Mr Abbott and Mr Turnbull to shut it down, and there have been attempts to direct its investment from a political level. The flimsy investment mandate of the NAIF is now how conservatives in this country operate. The Turnbull government wants to turn it into a boondoggle machine in pursuit of its ideological and political pork-barrelling. But the NAIF appears to have been intentionally set up, in the first instance, with no ability to operate independently; with a board that has been stacked in favour of mining investments; and with an investment mandate so broad and vague that Minister Canavan can essentially treat the NAIF as his own personal slush fund. The government has stacked the board with pro-mining people who are unwilling to assert NAIF's independence—and that is the most alarming aspect of NAIF.

In comparison to the CEFC, which has repeatedly—and very publicly—defended itself against government interference and staunchly guarded the independence of its investment decisions, the NAIF has remained entirely silent in the face of enormous political pressure and manipulation. For months, Ministers Canavan and Joyce have repeatedly promoted a $1 billion loan to Adani to partly fund the Carmichael railroad while simultaneously claiming that investment decisions of the NAIF are independent. If the Adani mine is to go ahead, it must be able to stand on its own merit—it should not get one-fifth of Minister Canavan's slush fund to help make it a profitable investment. Given the coalition's apparent willingness to set up the NAIF so that it risks becoming little more than a publicly-funded slush fund for the Liberals, I have written to the Auditor-General requesting that he investigate the governance and operations of the NAIF. North Queenslanders deserve an investment fund that provides the long-term certainty and job creation they desperately need. Therefore, the NAIF must have the independence to provide that. (Time expired)

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