Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I table a supplementary explanatory memorandum relating to the government amendments to be moved to the Northern Australia Infrastructure Facility Bill 2016.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Thank you, Minister. Amendments (1) to (3) on sheet GX128 circulated by the government are claimed to be covered by section 53 of the Constitution. The third paragraph of section 53 provides that the Senate may not amend any proposed law so as to increase any proposed charge or burden on the people. Clause 41 of this bill appropriates up to $5 billion from the consolidated revenue fund for the purpose of providing grants of financial assistance to the states and territories for the construction of northern Australia economic infrastructure.

Amendments (1) to (3) on sheet GX128 circulated by the government do not change the amount appropriated by the bill. They extend the geographical locations which the facility may consider when determining grants of financial assistance.

Quick and Garran in their famous commentaries on the Constitution stated:

… the Senate is only forbidden to amend tax bills and the annual appropriation bill; it may amend two kinds of expenditure bills, those for permanent and extraordinary appropriations … The Senate may amend such money bills so as to reduce the total amount of expenditure or to change the method, object, and destination of the expenditure, but not to increase the total expenditure originated in the House of Representatives.

That can be found on page 671.

Amending a bill to change the allocation of proposed expenditure and the purposes for which money is to be appropriated has long been considered to be within the power of the Senate, provided that the total proposed or available expenditure is not increased. In these circumstances, the Senate has taken the view that changing definitions to extend the allocation of funding are appropriately made by amendments rather than requests for amendments. The amendments will therefore be treated as amendments in accordance with the precedence of the Senate.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

by leave—I move government amendments (1) and (3) on sheet GX128 together:

(1) Clause 5, page 3 (after line 25), after the definition of Investment Mandate, insert:

  Local Government Area means a local government area recognised by the Australian Bureau of Statistics.

(2) Clause 5, page 4 (line 2), omit "Exmouth", substitute "Meekatharra".

(3) Clause 5, page 4 (lines 6 to 12), omit paragraphs (d) to (f), substitute:

  (d) the following Statistical Areas level 2:

     (i) Gladstone;

     (ii) Gladstone Hinterland;

     (iii) Carnarvon;

  (e) the Local Government Areas of Meekatharra and Wiluna (despite paragraph (b));

  (f) the territorial sea adjacent to areas covered by paragraphs (a) to (d).

These amendments seek to expand the definition of northern Australia to include the Statistical Areas Level 2 of Exmouth, Carnarvon as well as the local government areas of Meekatharra and Wiluna in Western Australia. The amendments follow discussions that the government has had with the Western Australian government and other Western Australian stakeholders about the appropriate definition of northern Western Australia. They are also consistent with other minor adjustments the government has made to the boundary of northern Australia, if you like, if you broadly took that boundary to be the Tropic of Capricorn. In the Northern Territory and Queensland, there have also been some adjustments below the tropic to take into account those parts of Northern Australia which are connected to those areas below the Tropic of Capricorn.

I should say that this bill has been out for some time for consultation since January this year. It was the subject of a joint parliamentary inquiry. There were no submissions on this particular issue to that inquiry, and the committee did not make any recommendations with regard to it. Nonetheless, since the tabling of that report, the government has received representations from Western Australian stakeholders, as I have indicated. After considering those representations, we are more than happy to agree to this minor adjustment to the definition of northern Australia.

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

The opposition will be supporting these amendments. I would not be able to talk with their current member Alannah McTiernan, if I actually did not strongly support these amendments. We have had considerable discussion, I know, in contributions this afternoon. In the original discussion around this legislation, a number of senators talked about submissions that had been made to them about the need to widen the definition, particularly in Western Australia. I think this is a good response from the government and it will actually now engage with people in those local government areas in Western Australia who feel they need to be part of the process, so we are supporting these amendments.

Question agreed to.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I am standing in for Senator Rachel Siewert, so I will be seeking leave to move the amendments standing in her name. The first amendment that we will be moving to this bill, as we foreshadowed in our second reading contributions, relates to the fact that, if you want sustainable development in the north, you do not build massive new coalmines and you do not build whopping great dams that will probably never fill up as the climate continues to change.

As we spoke about earlier in the day, we are supportive of sustainable infrastructure in the north that respects the natural values of the area, that works with local communities and respects their wishes for their land. In fact there are many clean energy opportunities, many communications opportunities and many conservation economy opportunity for the north that we would happily back and would love to see receive taxpayer support. However, when it comes to a dirty energy slush fund, as this one seems to be, then it is an entirely inappropriate usage of taxpayer funds to be giving out low-interest loans potentially to the likes of Adani to help build their mine, their railway or their port. So that is just not on, as I outlined in quite a lot of detail in my earlier contribution in the second reading stage of this bill.

Our amendment amends the definition of the economic infrastructure covered by the bill to exclude fossil fuel projects and also nuclear projects or any associated infrastructure that would facilitate those fossil fuel or nuclear projects.

As I say, if you are seeking taxpayer support, then in this age of climate emergency we do not need free taxpayers' dollars going to prop up unsustainable coalmines that cannot get private funding, because the coal price has tanked and people realise climate is a thing. You need instead to be seeking support for clean energy alternatives.

With no further ado, I, and also on behalf of Senator Siewert, move amendment (1) on sheet 7907 for the Australian Greens:

(1) Clause 3, page 2 (lines 17 to 23), omit subclause (2), substitute:

(2) Northern Australia economic infrastructure is infrastructure that:

  (a) provides a basis for economic growth in Northern Australia; and

  (b) stimulates population growth in Northern Australia; and

  (c) is not related to a fossil fuel or nuclear project.

Note 1: Infrastructure that relates to a fossil fuel or nuclear project includes a railway, mine, pipeline, port or electricity infrastructure.

Note 2: Infrastructure located outside Northern Australia can be Northern Australia economic infrastructure as long as it meets the requirements set out in paragraphs (2)(a) to (c).

(2) Clause 5, page 3 (line 19), before "In this Act", insert "(1)".

(3) Clause 5, page 4 (after line 13), after the definition of Northern Australia economic infrastructure, insert:

  principles of ecologically sustainable development has the meaning given by subsection (2).

(4) Clause 5, page 4 (after line 17), at the end of the clause, add:

(2) The following principles are principles of ecologically sustainable development:

  (a) decision-making processes should effectively integrate both long-term and short-term economic, environmental, social and equitable considerations;

  (b) if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation;

  (c) the principle of inter-generational equity—that the present generation should ensure that the health, biodiversity and productivity of the environment is maintained or enhanced for the benefit of future generations;

  (d) the conservation of biodiversity and ecological integrity should be a fundamental consideration in decision-making;

     (e) improved valuation, pricing and incentive mechanisms should be promoted.

(5) Page 6 (after line 13), at the end of Part 2, add:

8A Cost -benefit analysis to be undertaken

     The Facility must not make a decision to provide financial assistance for the construction of Northern Australia economic infrastructure unless:

  (a) a cost-benefit analysis has been prepared in relation to the infrastructure; and

  (b) the cost-benefit analysis has been published on the Facility's website for a period of at least 30 days before the decision is made; and

  (c) the public has been consulted in relation to the infrastructure; and

  (d) regard has been had to any submissions received as result of the consultation.

(6) Clause 10, page 7 (lines 17 to 30), omit the clause, substitute:

10 Matters covered by Investment Mandate

     The Investment Mandate:

  (a) must include a direction that the Facility must have regard to the principles of ecologically sustainable development when deciding whether to provide financial assistance; and

  (b) may include directions about the following:

     (i) objectives the Facility is to pursue in providing financial assistance;

     (ii) strategies and policies to be followed for the effective performance of the Facility's functions;

     (iii) loan characteristics for circumstances in which financial assistance is used to provide or support loans;

     (iv) providing financial assistance for purposes other than to provide or support loans;

     (v) eligibility criteria for financial assistance;

     (vi) risk and return in relation to providing financial assistance;

     (vii) any other matters the Minister thinks appropriate.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The government will not be supporting this amendment moved by the Greens. I should foreshadow that the reasons for the government opposing this amendment will relate similarly to other Green amendments that are to be moved in this debate.

Fundamentally, this bill is about providing infrastructure and investing in infrastructure in Northern Australia. By definition, the types of infrastructure are used by multiple users or indeed multiple industries The kinds of infrastructure that we have foreshadowed that this facility could fund include ports, airports, rail lines and water infrastructure. Of course, at various points, the resources industry in northern Australia—along with other industries—will be a significant user of ports, airports, water infrastructure and the like, and it would be nonsensical to exclude a very important industry, the resources industry, from using that infrastructure, because it would undermine the objectives of this act. Indeed, I would go so far as to say that, if we excluded the fossil fuel industry or the resources industry broadly from using infrastructure funded by this facility, we would effectively handicap this bill completely, and it would be very hard to find a piece of infrastructure in northern Australia that would not at some point be used by the resources industry.

Given that the resources industry accounts for more than 50 per cent of the gross value added in northern Australia, it is a very significant industry, and I am sure that most—not all, but the vast majority—of the major infrastructure that this facility is looking to fund would need to be used by the resources sector as well as other industries to make it economic. Indeed, one of the reasons that the government has stated that we need something like this is that the population is sparse in the north and therefore financing and funding the high fixed costs of infrastructure across a small population base is very challenging. It would only be made more challenging if the Greens' amendment were to succeed. Effectively, the fossil fuel industry could not contribute to the financing of infrastructure in northern Australia and you would not build much. That would also be the case for a lot of infrastructure in parts of southern Australia as well.

The second point I would like to make about the Greens' amendment—and, again, this is a point that could be made about various other amendments the Greens are seeking to move—is that they are seeking to impose a level of requirements and obligations on infrastructure in northern Australia that do not exist for government financing of infrastructure in southern or other parts of Australia, including northern Australia, under a different facility. For example, the Clean Energy Finance Corporation—which the Greens were integral in establishing—does not specifically exclude investments in fossil fuels, like the Greens are attempting to do here. So it is unclear why they would be seeking to impose this obligation on the Northern Australia Infrastructure Facility and not on other facilities, very similar facilities, that they have supported in the past. Indeed, the government has explicitly based a lot of the legislation and the draft investment mandate here on the example of the Clean Energy Finance Corporation as well as other similar infrastructure funds overseas.

So, for those reasons the government will not be supporting this amendment, as it will, in my view, undermine the objectives of this bill. There is no need to specifically exclude industries. Indeed, doing so would undermine the ability to finance commercial and functional infrastructure in the north.

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

Labor will not be supporting this particular Greens' amendment. We are concerned that there has not been a lot of consultation around the development of the wording for this particular amendment and there is some confusion about 'multiple users' for infrastructure. As the minister pointed out, there could be multiple users of infrastructure—for example, a railway. While Labor generally believes that mining projects should be able to pay their own way, if that is the intent of the amendment, this particular amendment does not make that as clear as it should be.

Further, we note that Infrastructure Australia will be consulted as part of the mandate. In my earlier contribution, I talked about the importance of having Infrastructure Australia involved in the process. We note that Infrastructure Australia's recently released priority list does not place a high priority on the sorts of projects in northern Australia that are discussed in this amendment. The mandatory and non-mandatory criteria in the draft mandate also make the recommendation of such projects under the NAIF unlikely.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

The contribution by the minister brought to mind several issues that I wish to respond to and also ask for some further information on. I thought it was very interesting that the minister, I think, belled the cat when he said that there would not be much infrastructure funded under this facility if it were to exclude fossil fuel infrastructure. We had feared that that was the case, but thank you for so explicitly stating that this is in fact a dirty energy slush fund with no intention of any non-fossil fuel infrastructure investment. If I am verballing you there, Minister, I would happily be wrong about that, and I will ask you a question about that in just a moment.

I thought it was somewhat bizarre that the minister was referring to the Clean Energy Finance Corporation as not explicitly excluding fossil fuels, when in fact the Clean Energy Finance Corporation is entitled the Clean Energy Finance Corporation and its investment mandate is indeed prescribed to exclude fossil fuels. So I might just ask the minister to reflect in his own time on that particular fact.

Minister, I am aware that there has obviously been some interest in this fund since it was first proposed and a number of inquiries have been made. I cannot remember the formal terminology that you have used. 'Expressions of interest' is the nub of what I am trying to get at. I know there have been some discussions between the Queensland government Treasurer Mr Curtis Pitt and the former Treasurer of your government specifically about the Adani project as well as a number of other projects that might avail themselves of this fund should it be established—which it now seems will happen, given that Labor is happy to fund fossil fuels. Minister, my question is: what are the non-fossil fuel expressions of interest, if any, that have been put to the process so far? I have asked in Senate estimates about this, and I understand there are quite a number of projects. But, given your remarks about them being 'mostly' fossil fuels, can you detail whether there are in fact any that are not?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I think the senator is mischaracterising a number of statements I made. The statement I did make was that most infrastructure in the north would at some point be used by the resources sector. But the senator does seem to be being a little bit unclear at times as to whether she is repeating my statement with regard to that or somehow relating to fossil fuel investments as a class. As I outlined, this bill is seeking to fund infrastructure—not fossil fuel investment per se and certainly not energy investments per se. It is seeking to fund infrastructure which is used by multiple industries, and of course the resources industry, being a significant industry in the north—indeed, in some locales it is well above 50 per cent of the gross value added—it is a significant user of infrastructure in the north.

To the specific question of whether we have a list of fossil- and non-fossil-fuel investments, which I think the senator asked for: we have taken expressions of interest. There are a number of proposals. But I do not have a breakdown of that, because, as I say, we are not seeking to invest in fossil-fuel projects per se. These are infrastructure projects, some of which, of course, will be more heavily used by other resources industries than others, depending on their location and their use, or they may not be. But I do not have that information, because this has been an expressions-of-interest process. I have general information about what the projects are and possibly costs, but no assessment has been completed at this stage on those projects, so I cannot provide the senator with that detailed information at this stage.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Thank you, Minister. I just have some follow-up questions. I find it pretty hard to think of a different industry that would want to use a coalmine. So, perhaps to help me understand your assertion about multiple users of infrastructure, could you please share what you do have about the projects that have gone through that expression-of-interest phase, particularly as they pertain to Queensland and especially if there has been any update since I last checked on that in estimates, approximately six months ago.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I want to make clear that we are talking about infrastructure investment, not mines, not hotel rooms and not individual businesses. We are talking about infrastructure that this fund is seeking to invest in. As the government has always said, for infrastructure like rail lines, airports, water infrastructure et cetera, not all but most of that type of infrastructure, of course, is used by multiple industries. An airport is used by the tourism industry and can sometimes be used to transport freight and other things, and ports are likewise. As I say, we do not have a particular breakdown of infrastructure by industry, for the very good reason that it will almost certainly be used by multiple industries.

But the senator did ask about some projects in Queensland. The information I have relates to the project itself, its location and in some cases—not in all cases—indicative costs. In Queensland, there are projects like the Burdekin Falls Dam expansion; upgrades to the Cairns Airport, which has been in the media a little bit; a travel lift facility at Cairns as well; the Connors River Dam and Pipelines; an expansion of the Ayr Aerodrome; the Great Keppel Island redevelopment, which has various marinas, I think, and the power and water infrastructure that is needed for Great Keppel Island—of course, as I said, it is not the actual resort itself that is proposed. There are projects like the Hann Highway, Hell's Gate Dam, the Lower Fitzroy River Infrastructure Project, Nullinga Dam, Palm Cove harbour and an expansion of the port of Townsville. A solar schools program in Queensland has been proposed to us. There are projects like the Rockhampton Airport; Townsville Airport; the Townsville Eastern Access Rail Corridor, which is connected to the port of Townsville upgrades; water supply in Townsville; waterfront development in Townsville; Urannah Dam; and the Whitsunday Coast Airport extension. So there is quite a comprehensive list of Queensland projects. As I indicated to the senator, most if not all of those projects would probably be used by multiple industries.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Thank you, Minister, for that helpful list. I jotted down most of that, but I will get the Hansard later. If you can provide the information that you alluded to about the approximate costs as well, I would appreciate that. As I say, I jotted most of that down. You mentioned one project which sounded like it might have some clean energy leanings: the solar schools program. Can you share whether there are any other projects either in Queensland or in what is now the new territorial scope of the bill, which you just fixed up a few minutes ago after the drafting errors—are there any other clean energy proposals so far that have gone through the EOI process?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I maybe should make it clear too that the EOI process has very much been a receival point, if you like, for the government. As I indicated earlier, there has been no completed assessment of these projects. There has been no information provided to me about the detail of these projects apart from what they are. That will be a matter for the board, of course, as the legislation indicates that it is not for the minister responsible to direct the board. It is for the board to make proposals that the minister and the government can consider.

In saying that, I have had discussions with the Clean Energy Finance Corporation and the Export Finance and Insurance Corporation, who you may see providing the back office for this facility. There is a will to work together. If there are clean energy projects which can have some complementarity between both the NAIF and the CEFC, those two bodies will work together. There is certainly no restriction against the NAIF itself or, of course, the CEFC in providing funds to clean energy type projects. There will probably have to be some natural complementarities between the two that they will need to work out.

On this list that I have in front of me, there are some other energy projects. It is not clear to me whether they are specifically renewable energy as such, but, as I have said, these are projects that have been submitted to us, and state governments and other stakeholders have been free to do so.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Thanks, Minister. Could you tell me what they are, please?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

There is a subsea cable project, but I am not sure what that relates to. There is a communities virtual pipeline as well, but, again, that might be telecommunications related. I do not have that information in front of me. There is a national tidal test centre, which may be related to tidal power. But, as I say, Senator, at this stage these are projects that have been proposed to us. The government is not seeking to assess the merits of these one way or the other. We are seeking to establish the board and the staff of the NAIF to do that, and they will provide us that information in due course.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Thanks, Minister. Just in relation to the board, we have some amendments that I will come to after the break that relate to the proper level of assessment that we say should be undertaken for these projects, in that they should go through the normal channels of environmental laws, and they should also have rigorous, independent, cost-benefit analyses done. But I note that you have referenced the role of the board. Can I ask you when appointments to that board will be made and what process will be used for that?

Sitting suspended from 18:30 to 19:30

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

The committee is considering the Northern Australia Infrastructure Facility Bill 2016 and a related bill. The question is that the Australian Greens amendment No. 1 on sheet 7907 be agreed to.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I apologise for not being able to be here a bit earlier. I understand from Senator Waters that she had asked the minister a question about how the make-up of the board is going to be determined and the process for appointment of the board. Could the minister answer that particular question?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Thank you, Senator Siewert, for reminding me of that question! The government has been consulting with state governments about the formation of the board. We hope to be in a position to announce the board as soon as this bill receives royal assent.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Does that mean that you have already determined the people who you think will be on the board?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The government does have a list of people who we believe will be appointed, but we will make that announcement after the bill receives royal assent.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I can understand why it is not appropriate to release the names, but I wonder if you could articulate the sort of expertise that you have in that particular group of people at the moment who will be on the board?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

There is a provision in the legislation which requires the government to ensure that board members have particular expertise. I may be able to find that provision precisely for the senator—thank you to my advisers! Section 15(4) has a number of different fields of experience that board members are required to have, or will not be eligible for the board unless they do have those experiences. Those include:

(a) banking and finance;

(b) private equity or investment by way of lending or provision 13 of credit;

(c) economics;

(d) infrastructure planning and financing;

(e) engineering;

(f) government funding programs or bodies;

(g) financial accounting or auditing;

(h) law.

My understanding is that the members who have been under consideration will have a mix of all of those skills.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I thank the minister for his answer. That is what I expected. Obviously, I presumed that you would be looking at that broad field of expertise; my question then related to what of that mix of expertise you have targeted particularly? And are they all covered or do they focus on one particular area?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Obviously, I have been involved in this process in consultation with Minister Frydenberg. He, of course, was responsible for the consideration of these appointments through government processes as the cabinet minister. We have not particularly targeted individual areas. There is a mix of skills and experience and, of course, individuals are not necessarily matched up against each of those skills and experience, but all the individuals have a mix of skills based on that section in this bill.

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

Can the minister tell us, in those magic figures between four and no more than six, whether you have come to any agreement? Is it four, five or six?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

My understanding is that there will most likely be a full complement of positions announced.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

One presumes that means six—just to be specific!

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Yes, I think that presumption could be pretty accurate!

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

The question is that Australian Greens amendment (1) on sheet 7907 be agreed to.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I move Australian Greens amendment (5) on sheet 7907:

(5) Page 6 (after line 13), at the end of Part 2, add:

8A Cost - benefit analysis to be undertaken

     The Facility must not make a decision to provide financial assistance for the construction of Northern Australia economic infrastructure unless:

  (a) a cost-benefit analysis has been prepared in relation to the infrastructure; and

  (b) the cost-benefit analysis has been published on the Facility's website for a period of at least 30 days before the decision is made; and

  (c) the public has been consulted in relation to the infrastructure; and

  (d) regard has been had to any submissions received as result of the consultation.

This amendment relates to the requirement, which we say should apply to any project that is seeking support under the Northern Australia Infrastructure Facility, for a cost-benefit analysis to be undertaken. As people out there listening might assume, to do that would in fact be a good requirement, but sadly our environmental laws, whilst alluding to that, do not explicitly require it. It is my understanding that the bill does not explicitly require it either.

Again, I would have thought that the bar for seeking not just project approval but actual taxpayer support for your project would mean that the highest standards would be applied to make sure not only that your project met all of the legal requirements in relation to environmental approvals and other project approvals but also that you had done a proper and fulsome cost-benefit analysis about whether or not this was a good spend of public money. This amendment proposes that all proposals be subject to an independent cost-benefit analysis—not one done by the proponent, like environmental impact statements so often are, but a genuinely independent cost-benefit analysis that not just looks at the economic costs and benefits but genuinely looks at the environmental, climatic, cultural and social costs of the project. We will be seeking support for this amendment. Again, I am holding my breath as to whether we will get it. But I would urge that an assessment process of the highest standard be undertaken with large projects like this, which have huge potential for environmental damage in particular but which also have the huge boost that comes with public support through funding. The highest standards should be applied.

Minister, could you please outline for us the assessment process that these projects will be required to undertake in order to successfully receive approval under various different bits of legislation and also to receive the tick under this proposed fund.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The government will not be supporting this amendment for reasons similar to those I outlined earlier in speaking to the initial Greens amendment. For similar reasons, this is not a requirement of other similar government programs. As I said earlier, the Clean Energy Finance Corporation, which this legislation and the mandate have been heavily influenced by, has no specific requirement under its legislation to conduct these kinds of cost-benefit analyses or the detail that has been outlined here by the Greens. We do not think it is appropriate to try to replicate assessments that will be done, of course, by other processes, as outlined by Senator Waters in her contribution.

In terms of what is required under the legislation and the related investment mandate—the proposed investment mandate that the government has put out—as I indicated in my summing-up speech, there will be no major changes to it. It requires that all projects must meet particular criteria, including that they be in the public benefit. It is going to be up to the board how they apply the investment mandate for that criteria and other criteria, but it is a mandatory criteria under that mandate that it is of public benefit. The government sees no need to impose additional red tape on infrastructure in northern Australia, particularly when this kind of process does not apply to other areas where government assistance is provided, including through a very similar facility: the Clean Energy Finance Corporation's arrangements.

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

I want to clarify that we are going to amendment (5) and skipped amendments (2) to (4). I wanted to make that clear because I am actually intersequence. As for amendment (5), we in the Labor Party know that the role of Infrastructure Australia will clock into the process when projects over $100 million are on the table. When projects over $100 million are in discussion, the NAIF board will be required to consult with Infrastructure Australia, which we talked about in our contribution as being a core element of our support for the process. Further, the mandatory criteria for the proposed investment includes a clear requirement that the proposed project will be of public benefit.

In considering public benefit, it is spelt out that the board will 1) give preference to those projects that will serve or have the capacity to serve multiple users and 2) produce benefits to the broader economy and community beyond those able to be captured by project proponents. The mandate, which we actually strongly support having in the process, also requires that the project is located in or will have significant benefit for northern Australia. Projects do not need to be entirely within those boundaries if they produce significant benefits to northern Australia—for example, a project that enhances north-south connectivity may be eligible.

We therefore believe that, given the process, the mandate and the cut-in of the Infrastructure Australia process, which does take into account the whole range of issues around public interest, the benefit will be demonstrated, including, as you pointed out, having a transparent cost-benefit approach. On that basis, we are not supporting the amendment proposed by the Greens.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

With regard to the very points Senator Moore has just made around the issues of public benefit: I am sorry, but in whose definition is the public benefit? We want a clear process set out that actually does look at the environmental, social and cultural aspects of particular developments. I am sorry, but comparing it to the Clean Energy Finance Corporation is erroneous given that these projects have the potential to dig things up that potentially have a significant impact on the climate to put in place significant infrastructure that may in fact not be in the long-term public interest. It may be counted, depending on who is doing the assessment, as having some public benefit in the short term but may not in the long term, particularly when you focus on the issue of climate. That is why we want in the legislation the requirement to do this type of very significant cost-benefit analysis so that those sorts of issues are clearly mandated to be looked at. Otherwise, some of the flawed decision-making we have seen in the past about things that might be in the public benefit might well get approved when they ought not to be.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I have one follow-up point to the point that Senator Siewert just made. I thank Senator Moore for providing detail about the parameters around the proposed definition of 'public benefit', but I would like some clarification from the minister. Is it actually the case that you are defining 'public benefit' to be two points, the first that it can serve multiple uses and the second that it has broader benefits to the economy? Is that your complete definition of 'public benefit'? Where is the social facet? Where is the environmental facet? Where is the cultural facet? That cannot possibly be your complete definition. Can you please elaborate on what the full definition is?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The particular provisions that Senator Moore was referring to are included in the draft investment mandate that the government has released. I will clarify that the provisions Senator Moore was reading out are not a definition of 'benefit' per se; it is a fleshing out of what we expect to be included at least in the assessment of public benefit. The relevant provision is provision 2 in schedule 1 of the investment mandate. That schedule is very simply that the proposed project will be of public benefit, and the description of that, to flesh it out, is that, in considering the public benefit, the board will give preference to the projects that serve multiple users and produce benefits to the broader economy and community. So it is in considering the public benefit that those two considerations are taken into account. It is particularly there to try to provide some definition for the board about what is economic infrastructure, because there is not a steadfast rule here. We have landed on this particular definition that they should give preference to projects that have those two characteristics, but those are not the only elements that may be considered when assessing public benefit.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Thank you. I am interested in that point particularly, given that you say they are not the only elements to be considered. 'Public benefit' is a term that has been used in many different pieces of legislation in various different jurisdictions for many decades, and certainly in the environmental context it has been tested in the courts many a time, which is why I am particularly alarmed that you are not defining it in the bill and you are leaving it as what sounds to be a fairly vague and non-encapsulated suggestion to the board in what will become the final investment mandate. I do not think that is a strong enough test for people who are not accountable to be handing out $5 billion for large fossil fuel infrastructure. So I am afraid everything you have just said makes me all the more certain that we need independent cost-benefit analysis that looks at the environmental, social, cultural and climate impacts of these very sorts of projects that could seriously damage those values. Would you care to reassure me in any way that the board will be given some more guidance other than that two throwaway things might guide their consideration? I fear that that is quite dangerously uncertain guidance to give to any board.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I have made the government's points about this particular amendment—I believe we are debating Greens amendment (5)—so I would simply make the point, in response to Senator Waters's point, that I do not believe the Greens amendment actually defines benefit or cost in any particular way; it says only that a cost-benefit analysis must be done. Of course, our mandate, as I have said, directs the board to ensure that projects are of public benefit. It will be for them to determine how they go about that.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Minister, frankly, I fear for the board's future. What sort of protections are you going to put in place for the board against being sued by unsuccessful applicants for their potential misapplication of the test of public benefit?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Like any board, they will have to be accountable to this place and to the government for their application of these requirements. The other point to make here is that, in other parts of the investment mandate, it says that finance cannot be provided unless there are regulatory approvals in place. So we believe that there are sufficient protections here: the board will provide finance only where rigorous assessment processes occur, in other parts that regulate particular elements of infrastructure projects that are put forward. They will have obligations, of course, to ensure that all aspects of the mandate are adhered to.

Question negatived.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

by leave—I move Australian Greens amendments (2) to (4) and (6) on sheet 7907 together:

(2) Clause 5, page 3 (line 19), before "In this Act", insert "(1)".

(3) Clause 5, page 4 (after line 13), after the definition of Northern Australia economic infrastructure, insert:

  principles of ecologically sustainable development has the meaning given by subsection (2).

(4) Clause 5, page 4 (after line 17), at the end of the clause, add:

(2) The following principles are principles of ecologically sustainable development:

  (a) decision-making processes should effectively integrate both long-term and short-term economic, environmental, social and equitable considerations;

  (b) if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation;

  (c) the principle of inter-generational equity—that the present generation should ensure that the health, biodiversity and productivity of the environment is maintained or enhanced for the benefit of future generations;

  (d) the conservation of biodiversity and ecological integrity should be a fundamental consideration in decision-making;

     (e) improved valuation, pricing and incentive mechanisms should be promoted.

(6) Clause 10, page 7 (lines 17 to 30), omit the clause, substitute:

10 Matters covered by Investment Mandate

     The Investment Mandate:

  (a) must include a direction that the Facility must have regard to the principles of ecologically sustainable development when deciding whether to provide financial assistance; and

  (b) may include directions about the following:

     (i) objectives the Facility is to pursue in providing financial assistance;

     (ii) strategies and policies to be followed for the effective performance of the Facility's functions;

     (iii) loan characteristics for circumstances in which financial assistance is used to provide or support loans;

     (iv) providing financial assistance for purposes other than to provide or support loans;

     (v) eligibility criteria for financial assistance;

     (vi) risk and return in relation to providing financial assistance;

     (vii) any other matters the Minister thinks appropriate.

Again, this goes to the veracity of the assessment that is undertaken for such projects to receive public support. In a point related to the previous one, about the need for independent and full cost-benefit analysis, this requirement would say that the investment mandate has to specifically include consideration of the principles of ecologically sustainable development when the board is making its decision. As you rightly point out, Minister, there will be other assessment processes that are undertaken. Some of those, depending on which state approval is required, may require the consideration of ESD. Indeed, the consideration of ESD is meant to be a fairly standard thing these days—given our level of scientific knowledge about a whole variety of aspects of the natural world—and so it is perplexing that the board, having such weighty decisions and such vast amounts of dollars to hand out, is not required at least to take account of the principles of ESD, let alone be bound to implement decisions that would further ESD. So, Minister, I ask for your explanation as to why that fairly standard procedure and requirement for consideration has not been included in the investment mandate to date.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The government will not be supporting these Greens amendments. I just make a couple of points. The first is that the amendments from the Greens here seek to insert into the legislation a provision equivalent to a provision in the Environment Protection and Biodiversity Conservation Act 1999. As I mentioned here in an earlier contribution, any projects that require environmental approvals—and, of course, those that trigger the federal EPBC Act—will be required to be consistent with, and seek approval under, that act, so those provisions in that act would apply to those projects.

Again I note—and I said I would note this many times—these provisions are not in the Clean Energy Finance Corporation Act or mandate. There is no specific insertion of the principles of ESD into that particular act or mandate, so it is not clear to me why we would do something different for northern Australia from what we do for clean energy. Further, adding these types of provisions into this Northern Australia Infrastructure Facility Bill has the potential to impose greater barriers or greater bureaucracy onto the approval or processes for infrastructure in northern Australia than in southern Australia, because, of course, only projects that trigger the EPBC Act would need these types of principles applied—and they should be applied and will be applied, and finance will not be provided unless approvals are granted under that act. But it is not clear why we would seek to increase the scope of that act for all potential infrastructure projects that may be covered by this particular fund, even those that may not trigger the EPBC Act itself, and in a way that is different from a very similar piece of legislation, the Clean Energy Finance Corporation legislation.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Minister, I think you have answered your own question there in firstly saying that you did not need to consider ESD because the EPBC Act would require it to be considered, but then finishing up by saying that you might have a project that did not need EPBC approval and therefore would not have ESD factored in. That is a perfect example of why you should have ESD in this particular bill and investment mandate: either to catch those situations that are not covered by the scope of the federal laws—which, as you well know, only cover matters of national environmental significance—or, indeed, to capture projects that somehow might not trigger those particular protected matters under our federal laws. Again, it does not seem that there has been a lot of thought put into the rigour of the assessment process for handing out wads of public money, largely to fossil fuel projects and other very large, potentially destructive projects.

Why is it not in the CEFC? Because clean energy is consistent with ecologically sustainable development. So, Minister, I am somewhat incredulous at your lack of understanding in that regard. Again, is there any better justification for why this government could not be bothered to put this very simple, very standard parameter into its decision-making process? It speaks volumes that you want to set up a dirty energy slush fund that does not have to consider the principles of ecologically sustainable development.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

No, it does speak volumes of the inconsistency of—sometimes—the approach of the Australian Greens here, may I say, because they have not applied these principles to legislation they supported in the Clean Energy Finance Corporation but now seek to do so with this legislation. To say somehow that clean energy projects are automatically consistent with the ESD is not a particularly accurate interpretation of the EPBC Act. The senator would know well that many of those projects themselves require approval under that act and of course would need to be consistent with those provisions.

The government has a position on what projects in this country require approval under the EPBC Act and require from a Commonwealth government perspective them to be consistent with that act, including the principles of ecologically sustainable development. The appropriate place to decide the scope and coverage of those provisions is in debates about the environmental approval process, and I will leave those finer details to the Minister for the Environment. But what we are debating here is trying to develop infrastructure in the north, not seek a backdoor way to impose red and green tape on projects in the north because we actually want to develop the north. We want to get projects going. We want to get jobs created. All of those projects and jobs and investments will have to be consistent with our laws in this nation but we are not about to impose higher hurdles and barriers, which would make that more difficult.

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

For the record, Labor will not be supporting this particular amendment but we do support the implementation of ecological sustainable development in project assessment. In our recent announcement, under a Labor government, Infrastructure Australia will be specifically tasked to include sustainability when assessing project proposals. As we know, Infrastructure Australia is a part of the intended process under the NAIF. This amendment is not necessary for inclusion in the legislation.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

The question is that the amendments be agreed to.

Question negatived.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I move:

Australian Greens amendment (1) on sheet 7908:

(1) Schedule 1, page 4 (after line 6), at the end of the Schedule, add:

Environment Protection and Biodiversity Conservation Act 1999

6 After subsection 49(1A)

  Insert:

  (1B) A provision of a bilateral agreement does not have any effect in relation to an action if:

  (a) the action includes the construction of Northern Australia economic infrastructure; and

  (b) financial assistance is to be granted in relation to the infrastructure under the Northern Australia Infrastructure Facility Act 2016.

7 At the end of section 49

  Add:

(4) In this section:

  Northern Australia economic infrastructure has the same meaning as in the Northern Australia Infrastructure Facility Act 2016.

This is a particularly important amendment because it goes to which government body gives the final approval for projects which have sought public funding under the Northern Australia Infrastructure Facility Bill. The import of this amendment is such that say a state government is proposing a rail line for Adani's coalmine, for example—would not be out of the question given the Queensland government has indeed deliberated doing just that—in such an instance, where the state government is a proponent for a project and might also be responsible for issuing the final approval for their own project, it would be a complete lack of independence and rigor to not have that additional level of federal approval, which, under our current laws, is required but under the policy of this government would not be required. Were it not for the Senate, they would have taken away though those federal approval powers, delegated them down to those very same state governments, who may well be the proponents for projects seeking funds under this facility.

To cut a long story short, if you want state governments to put their hands out for federal money then you need to make sure that the federal government is actually the one giving the environmental approval or placing conditions upon it or even refusing approval where it offends those environmental laws, and not simply allowing a state government to give itself the tick and then get the federal taxpayer money to do a project that is potentially environmentally damaging.

Minister, I am interested in whether or not you, the department or whichever minister has done the work on the details of this bill? I recognise that you are relatively new to this portfolio. Has this issue been considered by anyone in government? What is the government's plan to safeguard against state governments being in charge of giving themselves approvals in order to then access federal funds to undertake the project?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Once again, the government will not be supporting these amendments by the Greens for very similar reasons that I have outlined before. The Senator asked how the government has formed its views about the particular provisions in this bill. As I indicated earlier, the government, with advice from the department, investigated similar arrangements both here and overseas but in particular here of course. For the Clean Energy Finance Corporation, many of the provisions are very similar to that act and its investment mandate.

I once again make the point that these kinds of exclusions or restrictions are not in that legislation or mandate. We do not see a reason to duplicate those provisions in this particular facility. As I said, any projects requiring or triggering the EPBC Act would need those approvals before receiving finance from the Northern Australia Infrastructure Facility. While the government does have a view on setting up one-stop shops and making sure we reduce and eliminate any unnecessary regulation on the approval of major projects in this country, the appropriate place to debate the level and extent of those bilateral agreements is in the context of our environmental laws and the EPBC Act in particular, not in this legislation itself; although keeping in mind that bilateral agreements themselves have been a provision of the EPBC Act for some time—not inserted by this government but a policy that we have adopted and have a mandate for from the Australian people. So once again, the government will not be supporting these amendments because we see them as unnecessary and because they duplicate provisions that already exist in the legislation.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I seek a point of clarification: those provisions still exist in the legislation because the government were not able to rip them out. If those opposite are lucky enough to form government after the election—and I know there are many people that hope they are not—they will rip those provisions away and then what? The government will be left with a federal fund of taxpayers' money potentially going to state governments who might have just ticked off on their own project—there is no accountability there. Surely someone in your great department have turned their mind to this.

I get that the government do not support my amendment—that is your prerogative—but surely somebody has turned their mind to protection mechanisms so that there is some oversight and transparency and accountability when federal money could potentially go to state proposed projects, where they are in charge of issuing their own approval.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I am sure it will not surprise the senator to say that we will disagree here on this point. The government's view is that we have very rigorous environmental laws in this country. We support those laws, and those laws will be maintained. Indeed, under this facility—I will say it again—finance will not be provided unless approvals are given under those laws.

The senator is right: the government has made various proposals to reform our environmental laws—reforms that have been long considered by both sides of politics. Our view is that those reforms will not weaken our environmental protections. They will remain rigorous and some of the strongest in the world, if not the strongest. We can disagree on that point, Senator Waters. That is your prerogative. The point I am making is that I see it as nonsensical to try to impose on projects in northern Australia a set of environmental obligations and laws that are different to those in other parts of the country. That is not the objective of this bill. The objective of this bill is actually to facilitate and encourage investment in infrastructure in northern Australia. These amendments from the Greens would act in counter to the overall objective of this legislation. For that reason, the government will not support them.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Minister, just so I have your position clear: do you really not have any difficulty with the scenario where the federal government is not in charge of issuing any form of environmental approval and has no say over the environmental conditions of a project, and where the states entirely manage that process under a proposed delegation of powers that your government supports and has been trying to get through for years? You have no difficulty with the states being completely in charge of that approval process and with federal taxpayers' money being given out with no requirement for ESD or for a cost-benefit analysis because you have just voted down the amendments that we sought to insert? Have I got that right?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I make the point again that if this was so important to the Greens why didn't they insert it into the Clean Energy Finance Corporation Bill when they had the opportunity? These provisions do not exist in that legislation, and therefore projects funded by the Clean Energy Finance Corporation can potentially be in exactly the same boat as the senator is suggesting. I do not quite understand their double standard in this case, apart from the fact that one bill deals with clean energy and this bill deals with northern Australia infrastructure. It seems the Greens want to treat infrastructure in northern Australia differently to clean energy. They have their own priorities that they can explain to the people of northern Australia. We do not see why there would need to be inconsistent provisions across these particular facilities, which are very similar.

As I said earlier, the various secretariats for assisting in this area have already spoken to each other and are supporting each other. They will work together in collaboration and there is no need to introduce inconsistencies between them. We as a government remain confident in the strength of our environmental laws. Of course, any finances provided will need approval under those environmental laws.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Minister, could you give us an indication of what kind of asset classes and projects the northern Australia fund will be looking at.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Yes. While the legislation is broad, in the proposed mandate we have specified some conditions, or some preferences, for infrastructure that must be or have the capacity to be used by multiple users and/or have wider public benefit. The government has expressed that it is particularly looking at infrastructure that can facilitate a wider degree of private investment over an area—infrastructure such as ports, railway lines, airports, water infrastructure and telecommunications networks, and energy distribution networks as well, for that matter. Roads potentially fit that definition, but we have always made the point, to be clear, that this is a lending facility. The projects will need to prove in some way how they are going to pay the money back to the government. Roads typically will not provide such security, but they are not specifically excluded either. It is a very broad range of infrastructure that can be proposed, but there are strict conditions about how the facility will interpret the mandate and apply them to particular projects.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Would it be fair to say that the Clean Energy Finance Corporation is only looking at one asset class, which is renewable energy infrastructure?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I did make the point earlier—I do not think Senator Whish-Wilson was in the chamber—that there actually is not any specific restriction against the Clean Energy Finance Corporation investing in fossil fuels per se, which the Greens have sought to exclude in this bill. There actually is not. The provisions that the Greens seek to have included here are of a very different nature to what exists for the Clean Energy Finance Corporation. We see no reason to apply different standards, as I said earlier, to infrastructure in northern Australia than exist for the Clean Energy Finance Corporation under its arrangements.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

As you know, Minister, we helped set that up. We played a pivotal role in the Clean Energy Finance Corporation. It does have two very important words in its title, with 'clean energy' being the two critical ones. It is about reducing emissions. You have correctly pointed out that you have tried to change the investment mandate of the Clean Energy Finance Corporation since you have been in power, but it was specifically set up to invest in renewable energy projects of low risk. So you could perhaps equate that to brownfield assets, in the broader investment class, that could generate returns, but it was designed to reduce emissions.

I spoke on this in my contribution in the second reading debate today. As you are aware, the Senate Select Committee into the Scrutiny of Budget Measures has been looking into infrastructure financing for 15 months. It interests me that your previous employers, the Productivity Commission, made it very clear in their evidence to us that all infrastructure projects that are financed by taxpayers and the government should have a transparent cost-benefit analysis put up. If the minister chooses to ignore that, at least we can surmise the reasons the minister ignored it. Having worked for the Productivity Commission yourself, Minister, why do you feel that, sitting in your chair today with a different hat on, you could ignore such an important recommendation?

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

As I outlined earlier, the arrangements we are putting in place will require the Northern Australia Infrastructure Facility to consult with Infrastructure Australia where a project is of a value greater than $100 million. That is consistent with the Australian government's assessment proposals for infrastructure.

The senator asked specifically about my previous employer. I disagreed with plenty of recommendations that went into reports at the Productivity Commission. I do not necessarily disagree with the recommendations the senator has highlighted, although I probably have not read those reports as closely as he has. But the government is comfortable with the provisions in this legislation that will require consultation with Infrastructure Australia for those large-scale projects, that will require the facility and the board of the facility to ensure that projects it seeks to propose to the minister for financing are of public benefit.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I remember the Productivity Commission saying in estimates—and I think you were in the room, Senator Canavan—'Transparency is in our genes'. I know you follow their work very closely. What we discovered in this committee was that there is actually a pool of private funds out there—investors' funds and corporate funds—looking to invest in the kinds of projects that you have outlined for this northern Australia fund. The reason that they do not want to invest in these kinds of projects off their own bat is the risk profile of the projects. When you ask them about the risk profile, they talk about the politicisation of infrastructure spending in this country, particularly the lack of transparency around how these projects are selected by Infrastructure Australia, who only advise the minister, as you know; they do not go any further than that. They said that, if cost-benefit analyses were done, were transparent and were made public—full triple-bottom-line analysis, including the environmental issues that Senator Waters has outlined here today—then that would give business confidence to overcome the market failure that is clearly obvious and is why we have got infrastructure gaps and underinvestments in places like northern Australia. You know, probably better than most people in this chamber, how important these kinds of things are, and it astounds me that you are sitting here tonight knocking back perfectly good amendments that would probably attract private investment and make these projects a lot more efficient.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I will just make the quick point that the amendments that Senator Whish-Wilson is referring to have been dealt with. The amendment before the chair at the moment deals with bilateral agreements, not cost-benefit studies. But the senator pointed to the needs of the private sector, and those needs and patterns in private sector finance for infrastructure are front and centre of the government's mind in proposing this. On the advice that I am provided with, infrastructure finance has become increasingly difficult in this country. Before the global financial crisis, the average maturity of debt to infrastructure projects was 11 years. At the moment, it has dropped back to six years, I believe, from the advice I have been provided with. For an infrastructure project of a long life—typically over decades, not years in single digits—that makes the risk of investing in projects with such a short rollover period quite high. That is one of the factors that has led the government to land, if you like, on this design that would provide some level of concessionality to the private sector both in terms of rates and, perhaps more importantly, in terms of the maturity and length of time that proponents of projects would have to make a buck and be able to put themselves in a cash-flow position to pay back their financiers.

On the senator's particular concerns about transparency here for the private sector on project selection: this particular facility is a different situation than Infrastructure Australia itself. We are seeking to partner with the private sector on individual projects that often they may put forward themselves or be involved in directly. We fully expect that the Northern Australia Infrastructure Facility will work in close consultation with those proponents. Transparency is a two-way street, so we fully expect that those private sector proponents will provide sufficient detail for the board to make an informed judgement of the commerciality or otherwise of their projects. Indeed, there are requirements in the draft mandate for financial modelling and other analysis to be provided to the board by those proponents so they can make that decision. We believe that, in the confines of some matters being commercial-in-confidence, there will be the level of transparency between the board and the proponents that will allow informed decision making and the right projects to be selected.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

In fact there is a section in our select committee report about commercial-in-confidence and why it should be jettisoned for the exact same reason that I just mentioned. I thought I would point out, Minister Canavan, that the most obvious thing to the committee when we were taking evidence—and we were looking at assets of exactly the kind that you have outlined, in places all around the country, including, as I mentioned today, Rockhampton—was that the private sector, be they investment funds or be they corporates, had a very high expected rate of return on their investment in these assets. They were interested in brownfield assets and, when we looked at greenfield assets, which are by nature higher risk, that expected rate of return climbed. When we asked, 'Why is that risk premium so high on infrastructure spending, which is supposed to be a fairly safe and boring investment?'—the reality is quite different; they have actually got a lot of risks inherent in them—we heard that the expected premium was really high because of the same issues that I mentioned: the lack of transparency and the concern around social licence for investment in these kinds of projects. They said: 'If you want to reduce our expected rates of return, if you want to reduce the risk premiums in these projects, have fully transparent, comprehensive cost-benefit analysis published. Have these things out there so that we can actually look at the detail and we can make decisions based on these projects.'

The same applies to a government-sponsored infrastructure bank or infrastructure fund that is making direct investments using taxpayers' money. We do not need a commercial-in-confidence law to hide behind. If we want to make the best decisions and get the best bang for our buck, we need to be fully transparent. I just thought I would point that out, Senator Canavan. I am sure you would appreciate the logic behind that. I am not sure why we are going down this road, when it is so obvious and we have got literally 20 or 30 pages of evidence just on these issues from some very key stakeholders around the country, including investment banks and companies that already invest in infrastructure. It is the politicisation and the unknowns that are causing the lack of certainty and the perception of high risk in infrastructure projects. All we are asking for is transparency. It does not sound that hard.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I will just make a couple of quick points. I do not want labour the point here, as interesting as this repartee with Senator Whish-Wilson is. The first point is this. I referred to one of my past careers before. I did have another past career in infrastructure finance, and I slightly disagree about the risks of greenfield investments being those matters of transparency alone—or significantly at least; perhaps that was the point he was making. Typically, greenfields investments are much more risky because there are significant demand-risk overestimates of how many people are going to use the infrastructure, because you really have nothing to base it on and there can be wild variations in the judgements about who will use it now. Transparency, in my view, cannot really quite solve all those issues. It comes down to judgement. We are all frail human beings, and judgements are often wrong, as we have seen in some high-profile infrastructure finance deals in this country in the last decade.

The second point I would make is that we have taken an ample amount of time to consult widely on the provisions of this bill, both the legislation itself and in fact even before that. A consultation paper was released in November last year and draft legislation in January, and a mandate was released in March. We have held meetings all around the country including in Sydney and Melbourne, particularly with the finance sector itself. The feedback I have received from those consultations has been overwhelmingly positive on the provisions of the mandate, notwithstanding—as I outlined in my summing-up speech—some minor adjustments we seek to make to the mandate. But presumably, if the concerns the centre is raising emanate from the private sector, they would have been captured by those consultations. I am informed that the financial sector is broadly happy with the provisions we have put in place and is confident that this can work.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I want to come back to the substance of this particular amendment. It brings to mind an example which is pertinent. When you, Minister, listed out the sorts of projects that had expressed interest in applying to the fund, many of those were dams. Many of those were in Queensland. I recall a particular dam, the Mary River dam—the Traveston dam, as it was known—that was proposed by the Labor state government and approved by the Labor state government under state laws, and it took the federal environmental laws to refuse approval for that dam in order to safeguard the Mary River cod, the lungfish and the Mary River turtle.

Under the rules for the NAIF fund, that dam could have been approved, for all purposes, by the state government and would have then been able to apply to NAIF for funding. NAIF would not have then been able to look at the principles of ESD. They would not have had the benefit of an independent cost-benefit analysis, and indeed such an ability to refuse approval—which was exercised by then Minister Garrett, if my memory serves me correctly—would not be able to occur. So, for a dam which your side of politics miraculously opposed—I think it is the only dam that the Liberals and Nationals have ever opposed, but good on you for that particular example—your fund would then have been providing taxpayer moneys to build it.

This is exactly why we need an amendment that says: 'If you want to apply for federal money, you have to have gotten federal environmental approval. You can't have just let the states give themselves approval.' Minister, I seek your response to how you would envisage the rules about the Northern Australia Infrastructure Facility applying to that Traveston dam example. Correct me if I have got any of that wrong.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

As I have said earlier, this is not the place, in my view, to be debating in detail the provisions of the EPBC Act, given that I am not the minister responsible for that, and this legislation deals with issues that are separate in detail from those that are dealt with by that particular piece of legislation. However, of course, under the arrangements that the government are putting in place—or have put in place in some circumstances with some states—under the bilateral agreements process, we are confident that the provisions of the EPBC Act and the assessment that would otherwise be required by it will be taken out faithfully by state governments. That is our view.

The Greens may have a different view, but it is the government's policy to establish those processes, particularly to ensure that we can get jobs created in this country and get things going. A number of high-profile cases have been held up for far too long through the assessment processes in this country with no added benefit in terms of environmental protection.

Those are this government's policies. We support job creation. We support investment in this country while maintaining our strong environmental laws and protections. There is an appropriate place and time to debate those provisions, which I am sure that the Greens and you, Senator Waters—through you, Chair—will take full advantage of. Again, we see no need to duplicate that debate or to change those generic environmental provisions of the EPBC Act through this particular process.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I will just conclude. I find it remarkable that this government wants to hand out $5 billion to the fossil-fuel and other very large damaging infrastructure sectors with virtually no transparency, with no requirement for a cost-benefit analysis, with no requirement for the principles of ESD to be considered and with no care that in fact the federal government might not even have the ability to approve or refuse such a project under environmental laws in future. Yet at the same time you have the audacity to hold up the Clean Energy Finance Corporation as the model, a model that—through you, Chair—you and your government have been trying to tear down since you formed government. Suddenly it is a paragon of a model of how we should be doing things. We know that, so why were you attacking it for so many years? We welcome that you now are adopting the model, but it is ironic that you want to give free money out to fossil fuels with absolutely no checks and balances. Again, it speaks volumes about the priorities of this government.

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

For the record, we are not supporting the amendment, which seeks to exclude bilateral agreements between states and territories on the one hand and the Commonwealth on the other from exemption under federal environmental legislation for northern Australian projects provided that suitable environmental protection arrangements are put in place at state or territory level. A key point of this legislation is to avoid duplication of environmental protection processes across governments. Labor has always believed that sustainability and environmental protection are core considerations in the evaluation of project merit. Labor does not support random amendments to important legislation like the EPBC Act, however well intended they may be.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

The question is that amendment (1) on sheet 7908 be agreed to.

Northern Australia Infrastructure Facility Bill 2016, amended, agreed to; Northern Australia Infrastructure Facility (Consequential Amendments) Bill 2016 agreed to.

Northern Australia Infrastructure Facility Bill 2016 reported with amendments; Northern Australia Infrastructure Facility (Consequential Amendments) Bill 2016 reported without amendments; report adopted.