Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Hansard source

Four, five or six—yes. I am just wondering—will we toss a coin there? But I understand it is just a way of expressing it. But, yes, we know how many members there will be on the board. I am sure it will be an interesting process, determining who will make up the board's membership, because we know that there is great interest in this process. Ways to fund and invest in northern Australia appropriately have been on the agenda for a while. I would imagine that being on the board will be a very important responsibility and one that will be watched closely by everybody who is interested in this area.

The minister will be unable to direct the NAIF to invest in a particular infrastructure project or in relation to a particular person. The minister will have a veto power to reject decisions by the NAIF—and I think this is important to read into the record—only if assistance would be inconsistent with the objectives and policies of the Commonwealth government, have adverse implications for Australia's national or domestic security or have an adverse impact on Australia's international reputation or foreign relations. The NAIF can grant financial assistance for states and territories for the construction of northern Australian economic infrastructure and determine the terms and conditions for those grants. Again, in any consideration of development in northern Australia it is important to have the states and territories involved in what the best way would be to develop projects.

As I said, one of the important elements of this process is that it is not limited by state border, but it would be nonsensical to believe that effective discussions around appropriate investment in projects to develop northern Australia could be done without the engagement of the states and territories. It would be difficult if not impossible to ensure that projects could be successfully completed if there were tension or conflict with states and territories. So it is there that there will be consultation and discussion but also that states and territories would be able to have financial assistance if the projects they are putting forward meet those criteria which have already been developed.

Importantly, the mandate directs NAIF to consult with Infrastructure Australia and relevant Commonwealth departments where an investment decision is greater than $100 million. The mandate also describes the types of financial assistance that may be offered, the terms for the provision of financial assistance, objectives of the NAIF, strategies and policies to be followed, eligibility criteria, and risk and return parameters. The mandate is the core of this legislation, and the bill provides for the investment decisions of the board to be covered by the Northern Australia Infrastructure Facility Investment Mandate Direction 2016—which, I think gratefully, can be referred to in future as 'the mandate' rather than giving it the full title. It is a word I do not like. I do not like the word 'mandate' but, in terms of putting clearly what is there in the legislation, I think that, for people who are engaged in discussions about the development of our northern regions, having that clear mandate is an important element of building that trust and ensuring the independence about which I have spoken before.

The mandate covers a number of mandatory criteria, funnily enough, for an investment decision to be made. I just put on record again that the project must—these are the processes around which criteria will be developed—'involve the construction or enhancement of economic infrastructure'; 'be for public benefit'; or 'be unlikely to proceed' if not for the NAIF funding or be likely to proceed at a much later date or with a limited scope. Again, this focuses the need for the investment from NAIF—that, without the NAIF investment or the ability to get that, the project might not have been able to proceed in a timely way or might not be able to fill its total goals and might have to be limited in some way. Absolutely essentially, the particular projects must 'be located in, or have significant benefit for, northern Australia'. It is important that there be an understanding of the process. It does not necessarily have to be located in northern Australia, but, if the board believes that the project would provide effective benefit to northern Australia, it would meet that criterion.

The project must show that the finance from the NAIF will not exceed 50 per cent of the total project debt; provide comprehensive financial modelling to show that the loan moneys will be able to be paid in full and on time, as I said; and provide an Indigenous engagement strategy. Again, in the roll of legislation brought before this place over the last couple of years, we have consistently talked about having in these regions an effective Indigenous strategy, because without jobs—without the opportunity for employment—there would be limited support for building population, as I said, and for acknowledging the link between this legislation and other legislation which has gone before the previous government and this one about ensuring that there are employment opportunities for Indigenous communities. No longer will these kinds of projects be able to operate by bringing in outside labour and excluding any opportunity for an Indigenous employment engagement strategy. I think that, for me, is one of the most important elements of this legislation.

One of the things that Labor raised—and I take this opportunity also to acknowledge the work of Minister Gary Gray, who is retiring at this election and in whose portfolio responsibilities this was—was the importance of having this effective consultation with Infrastructure Australia. As I have said, the mandate spells out that NAIF needs to consult with Infrastructure Australia where an investment decision is greater than $100 million. We had raised concerns at the committee level—and I put them on record today—that the requirement to consult where the loan is greater than $100 million may not in itself be sufficient. Labor have indicated that we would like to see some integration at board level between the Northern Australia Infrastructure Facility and Infrastructure Australia. As you know, Infrastructure Australia was the author of the recent Northern Australian audit—infrastructure for a developing North in May 2015.

That report bears such relevance to the legislation about which we are having a discussion here today, because that whole report was about how you would be able to develop effective infrastructure for a strongly developing north. So the need to involve Infrastructure Australia, which is established and credible, all the way through with any project that we would be talking about under this legislation is critical. The absence of Infrastructure Australia expertise in some projects may create unwelcome duplication and waste resources across agencies and departments where NAIF projects are assessed.

The fact is that we have within the mandate an expectation—in fact, a rule—that there needs to be consultation for projects over $100 million. That is strong, but we believe that having Infrastructure Australia involved in projects in northern Australia would be a valuable element and would improve the legislation. It may well be that arrangements would be made so that those discussions could go on, but currently the mandate is particularly focused on projects over $100 million. It would be very valuable if the minister could address in his reply this issue of maintaining the expertise.

It is very important, as I said earlier in this contribution, that funding is allocated transparently and that decisions can be publicly assessed. This is an important element of funding. We need to ensure that not only the parliament but the community has strong trust that this fund will be effectively responding to the needs of the region and that it would pass any test of transparency. As we know, we would expect that to be the case. We have had occasions in the past where programs have been subjected to audits which have proven that some expenditure of government funds had not passed that element of transparency or trust.

So it is most important that in developing this new program it is clear at the start of the project that there is an open commitment that there will be transparency and also engagement so that, as projects are being assessed and when decisions are made, it is done in the public arena. People will be able to see what the basis of a decision for a particular funding allocation was and how that particular allocation meets the criteria which I spelt out in the contribution—in particular, how will it benefit northern Australia? How will it respond to the particular needs of northern Australia? We as a community and as a parliament will be able to be sure that these needs are being met and that the people who are living there are very much engaged in seeing how the project operates and will be absolutely certain that the money is well spent and effectively processed.

Again, it is important that we have the link with Infrastructure Australia. I know that that is an element that will come out in other contributions to the debate. But, as I said, Labor does support this legislation. We are optimistic and hopeful that this will be of benefit to northern Australia.