Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I have some questions for the minister. Minister, I referred in my second reading contribution to the appointment of Annabelle Chaplain to the Efic board. I want to go to the specifics in relation to her appointment. She's now resigned, of course. Was the minister aware of Ms Chaplain's roles with Downer EDI and Queensland Airports Limited when considering her term on the Efic board, prior to her shock resignation?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

I'd have to seek further information. But I would make the point that, in relation to the person concerned, if you're talking about a possible conflict between Efic and NAIF in this regard, please understand that Efic is a service provider to the NAIF and provides no sort of decision-making role and does not in any way dictate what the NAIF should or should not do.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Efic was advising NAIF from its inception in July 2017, despite one of its board members, Annabelle Chaplain, having clear conflicts of interest. She was, Minister, just for your information, responsible for overseeing NAIF's project assessment under Efic, as well as on the board of companies that would benefit from NAIF projects, such as the Adani rail line. Is the minister aware of the roles that Ms Chaplain held besides being on the board of Efic?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

My understanding is based on what information was publicly available at the time—that there were some reports about various roles this particular person occupied. But I believe in all circumstances the matter's been well handled, and the person involved is no longer there.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

When did Efic executives become aware that there might be a personal conflict of interest between Ms Chaplain in the assessment of projects applying for NAIF funds, such as Adani?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

You're now asking me a more detailed series of questions on a matter which is not directly relevant to the bill here. I'm happy to take a series of questions on notice and have them answered for you, but I believe it would be in the interests of all of us to focus on the substance of what is in this bill.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

One of the reasons this is important is the lack of transparency within Efic—the fact that it is exempt from FOI and it operates in a very secretive manner. There have been conflicts of interest for Efic board members. Ms Chaplain's appointment was ended abruptly. I believe it is relevant to this bill, because you are asking the parliament to accept an expansion of powers and roles for Efic, despite the fact that currently there is a cloud over the way the organisation runs and how it handles potential conflicts of interest for board members. That's why.

I'm happy to put each of these questions to you, and, if you can answer, that would be great; if you need to take them on notice, that is your right, of course. But, just to be clear, I think these questions are directly related to this issue, because you are asking the parliament to accept an expanded role for this organisation, but what we have here is one example of a woman who has been on the board of Efic who had conflicts of interest, and I'd like to know how Efic managed this conflict of interest from the word go.

If you could take on notice, Minister, when Efic executives first become aware of a potential conflict of interest for Ms Chaplain in the assessment of projects applying for NAIF funds, that would be helpful. I'd also like to know, Minister, what actions were taken by Efic to avoid this conflict, or the perception of it. And I hope that is something that you could provide to us today because, going forward, we need to know that Efic has proper processes in place to deal with potential or perceived conflicts of interest.

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

The first point is this: Efic has a policy to manage conflicts, and that policy would have been applied in this particular case. The other point to make is that this organisation is subject, I believe, to a higher degree of public scrutiny than any so-called private bank, because of budget estimates, for example, and other processes of government. So I am satisfied that, subject to things like commercial-in-confidence requirements and the rest, this is an organisation that meets appropriate levels of transparency and openness. I'll have more to say about particular amendments that the senator wants to run in relation to FOI exemption in a second, when that matter is raised, but I'll leave it there for now.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Could the minister please give an explanation as to why Ms Chaplain resigned from the board and why her tenure on the board expired much earlier than originally planned? She was meant to be on the board until 2019. Why was her tenure short-lived?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

In the interests of natural justice for the person you've named, I will find out the exact circumstances in which she resigned and provide that to you. Again, I make the point that we're here today to deal with a forward-looking set of propositions to help Efic do its job even better in the future. The reality is that Efic has policies in place to manage these conflicts. Efic needs to exist because overseas bodies exist in this space—export credit agencies. We often hear complaints from Australian companies that they want assistance from the Australian government to be able to compete against overseas suppliers, who get the support of their governments on major contracts. The main benefit would come back to Australia in terms of contracts and orders.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Could the minister please table for the Senate the policies of Efic in relation to dealing with conflicts of interest?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

I'm happy to do that in due course, when I get a copy.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Following the same line of questioning as Senator Hanson-Young, we know that Efic has a very flawed track record when it comes to supporting large resource projects. We know that it supported the Wiggins Island Coal Export Terminal, which has performed really poorly. I understand that Senator Hanson-Young has mentioned other projects. The Productivity Commission review in 2012 found a wide range of concerns. Can you just outline to me why we shouldn't address those concerns first, before we grant additional powers to Efic to assist more agencies?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

The point I would make is this: Efic is a learning organisation. When it has done things in the past, it's gone back to review them to work out what has worked and what hasn't worked, and we go from there. This particular bill, and what it does here, in part reflects those sorts of lessons from previous experience. Some of the examples you throw up are examples where the evidence may well be contested and the conclusions may be contested. It's important for us to understand that you or I may have a particular view about the role of Efic in a particular resource project, because we may have a view about that particular resource, but that should not cloud whether we therefore have a positive view about whether Efic is operating in an appropriate way in dealing with the matter.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

I suppose I'm not talking specifically about the investments. I'm now talking specifically about the Productivity Commission's review, which did express a wide range of concerns. So it's not a question of whether we support the areas that Efic is investing in. On that, has the Productivity Commission looked at Efic's governance since it responded to the 2012 review? Has there been another look by the Productivity Commission at what Efic is doing? Or, if they haven't, has the Auditor-General, for example?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

In relation to the Productivity Commission, I don't believe they have. In relation to the Auditor-General, they have an ongoing brief. The Auditor-General can, at any time, decide to examine an organisation or a particular set of projects or proposals. That's a matter for the Auditor-General.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Is the government contemplating opening up Efic to FOI requests, so that we can get a better understanding? It's a black box at the moment. There are claims and counter claims, as you say, but that is in large part because of the secrecy under which Efic operates. Is any consideration being given to opening up FOI requests, so that we get a better understanding of how Efic is governed and how decisions are made?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

Efic does have an exemption from FOI. It is limited. It relates essentially to transactional matters under parts 4 and 5 of the Efic Act. The reason for the exemption is to protect commercial-in-confidence information provided by the client. Clearly exporters will not want to provide commercially sensitive information to a financial institution that could be made public through FOI. Efic's long-held view is that the current Efic-specific exemption provides administrative certainty to Efic regarding its obligations and greater certainty to clients about its ability to maintain confidential information without which the quality of information provided to Efic may be prejudiced and Efic's ability to make informed decisions on the risks of transactions it considered supporting impaired. In turn, that would increase the risks and potentially the costs to taxpayers.

Efic's current FOI exemption is consistent with the banker's common law duty of confidentiality to clients and has been established for nearly 100 years. I would add, though, that on top of that Efic is subject to estimates and other processes of government. So there are a number of ways in which we can examine the structure and governance of the organisation. But in relation to information about particular transactions, as I indicated here, the FOI exemption is an extension of the common law doctrine of protecting financial privacy, and it is consistent with and is followed in every common law jurisdiction, including Australia.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Have you got any advice from the Productivity Commission or the Auditor-General on this specific legislation?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

No.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Given the expanded powers for Efic under this bill, could you perhaps give me an outline of what specific government agencies the government wants Efic to support and how it is going to manage that support? Are there going to be more staff employed? Is there a move to decentralise where necessary? The example I give is that Efic is providing significant support to the NAIF and yet it hasn't located one staff member to northern Australia. So can you give me a sense of how you plan to operationalise Efic's increased role?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

Efic has a certain set of expertise and, as the NAIF example indicates, it would provide that expertise to other governments, programs and services seeking to do analogous things. But it would do so on the basis that it would recover the cost of those services so that they would not be at the expense of Efic's clients, particularly the small- and medium-sized enterprises.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Thank you. I want to move on to an area that Senator Hanson-Young touched on, and that is Efic's support of the NAIF. I suppose today more than any other day we should be particularly concerned about the role of the government in subsidising bad fossil fuel projects. My question is whether Efic has a team working within the NAIF on project evaluation for the Adani coalmine.

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

I'd have to check and get back to you on that.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Can you tell me whether Efic is working on the Adani project? Is that something you can tell us?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

To be properly helpful, I'd have to check. I will take it on notice.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Is Efic currently contemplating the evaluation of finance options for the Carmichael mine, the Adani project? If so, does that include ensuring and guaranteeing commercial bank loans?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

I will have to check.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Finally, can the minister definitively rule out whether Efic will provide loan insurance or loan guarantees to a commercial banking operation for that project?

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

What happens in relation to NAIF's decisions in relation to Adani is a matter for NAIF. Efic's role is to provide services. It would not be the financier.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

by leave—I move amendments (1) to (5) on sheet 8203 together:

(1) Schedule 1, item 1, page 3 (after line 11), after the definition of EFIC's Commonwealth entities functions in subsection 3(1), insert:

large business: see section 3A.

related party, for a business, has the meaning given by section 228 of the Corporations Act 2001.

substantial part of a business meansa part of a business that is substantial and not minor or insignificant.

(2) Schedule 1, page 3 (after line 21), after item 2, insert:

2A After section 3

Insert:

3A Meaning of large business

(1) A business is a large business at a particular time in a financial year (the current financial year) if:

(a) its revenue for the previous financial year is $150,000,000 or more; or

(b) if there was no time in the previous financial year when the business was carried on—its revenue for the current financial year is as at that time $150,000,000 or more.

(2) Revenue is to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time.

(3) Schedule 1, item 6A, page 4 (line 22), omit "requirement in subsection (4) is", substitute "requirements in subsection (4) are".

(4) Schedule 1, item 6A, page 4 (lines 23 to 27), omit subsection 16(4), substitute:

(4) For the purposes of subsection (3), the requirements are the following:

(a) the person who carries on the business must certify, by writing given to EFIC, that the person reasonably believes that the loan will result in a net increase in the number of people employed in Australia by the business, or a related party of the business, during the term of the loan;

(b) at the completion of the loan, the person carrying on the business must certify to EFIC whether the loan has resulted in a net increase in the number of people employed in Australia by the business, or a related party of the business;

(c) if the business is a large business—the person who carries on the business must certify, by writing given to EFIC, that the loan will not be used to move the whole or asubstantial part of the business, or of a related party of the business, overseas; and

(d) EFIC must ensure that it publicly discloses copies of the certification it receives under subsection (4)(b).

(5) Schedule 1, item 6B, page 4 (line 30) to page 5 (line 7), omit subsections 23(3) and 23(4), substitute:

(3) However, EFIC must not lend money under this section for the purpose of financing a transaction whose dominant purpose is direct investment outside Australia by a person carrying on business in Australia unless the requirements in subsection (4) are satisfied.

(4) For the purposes of subsection (3), the requirements are the following:

(a) a person to whom the money is lent must certify, by writing given to EFIC, that the person reasonably believes that the loan will result in a net increase in the number of people employed in Australia by the business, or a related party of the business, during the term of the loan;

(b) at the completion of the loan, the person carrying on the business must certify to EFIC whether the loan has resulted in a net increase in the number of people employed in Australia by the business, or a related party of the business;

(c) if the business is a large business—the person who carries on the business must certify, by writing given to EFIC, that the loan will not be used to move the whole or asubstantial part of the business, or of a related party of the business, overseas; and

(d) EFIC must ensure that it publicly discloses copies of the certification it receives under subsection (4)(b).

I will make some preliminary remarks in regard to some matters that were raised in the second reading debate. Efic, of course, has provided an extremely valuable service to this country since 1957. It's a very substantive role. I am unashamedly a supporter of public intervention when it comes to access to finance. I'm surprised the Greens are not. When it comes to manufacturers in the country today, when you talk to manufacturers, they will talk to you about two major problems they face, which are the price of energy and access to finance. We know that for exporters there is a particular difficulty when it comes to our financial institutions. Of course, by and large they have been privatised, have been deregulated, and as a consequence they're probably the most profitable in the world. But, when it comes to their social responsibilities, I think we have ample cause to see why we need a royal commission into our banks. We do have clear and unequivocal examples where, time after time, our banking system has failed to meet its social and economic obligations to the development of this country, whereas Efic, since 1957, has provided support to manufacturers and a range of enterprises—small, large and medium-sized enterprises—in accessing finance that quite often is simply not available through commercial means.

Senator Leyonhjelm says, 'If it's not available from the commercial sector, well, it's not good enough.' That's not the case. That's not the reality. That's not the economic reality of how businesses is actually done. I can talk directly of experiences I had with General Motors Holden, as an example. I don't normally discuss matters relating to Efic but the matter is now public. General Motors Holden, during the global economic crisis, had been banking with the Commonwealth Bank for 60 years in this country. But the banking system in this country said, 'Oh well, we're not interested in this area because the risks are too great,' and withdrew their financial support for one of the leading companies in this country at the time. There was no access to finance through commercial means, and it was Efic that filled that gap, met that market failure. It became public because of the extraordinarily unethical arrangements that had been entered into between the then Leader of the Opposition, Malcolm Turnbull, and Mr Godwin Grech. As a consequence of those arrangements, these matters became a matter of public record. In those circumstances General Motors Holden were obliged to enter into arrangements with Efic. The risk was taken on under the national account, which meant it was actually a cabinet decision. But it was properly evaluated by Efic, and the consequences were that, at a very high rate of interest, a premium rate of interest, General Motors were able to secure a line of credit that they couldn't get anywhere else. It turned out that they didn't need to use it. They had to have it; otherwise they could well have gone belly up. They didn't actually need to call upon it. That is an example of what an extraordinarily important service this agency has provided.

Of course, we see them in so many other areas. Whether it be in regard to companies that have operated in the area of engineering or companies that have developed new technologies for export, whether it be in manufacturing, whether it be in the resources sector, whether it be in construction—right across the economy—Efic have played an extraordinarily important role. Traditionally it was a role that was played by what used to be the publicly owned banks through the development agencies they had available. Private banks aren't much interested in this. Think about what's happened throughout regional Australia: you can't get access to finance under the present financial system for so many aspects of the economy.

When it comes to exports, I think the minister is quite correct to point to the fact that, by international standards, other competing economies provide these services to their enterprises. It is only fitting that we're able to do so. The circumstances that we now face are: what are the conditions under which these arrangements are made? That's why these bills are so important. What we have here in these amendments provides a means by which we are actually strengthening accountability. That's why we're moving these amendments. Efic has provided assistance to—I think one minister said there was $150 million in last year's accounts, 194 transactions valued at $390 million in total. It supported 149 export contracts worth $1.4 billion—a very substantial contribution.

So the question that concerns us is: how do we make sure that this resource is not made available to actually facilitate the offshoring of jobs and capabilities? My colleague Mr Jason Clare has been able to negotiate very strong improvements in this bill with Mr Ciobo. I congratulate both of them for undertaking that work. I acknowledge the government's work in this regard in acknowledging that the bill could in fact be strengthened as a consequence of these amendments that I am moving, which require Efic to provide additional measures of accountability from the companies that are seeking assistance.

Regarding questions raised by Senator Xenophon, perhaps I can deal with that now—I trust he's paying attention, because I don't intend to pursue this at any great length other than through this contribution now. I point out to Senator Xenophon that the principles underlying these amendments—and we don't have the resources of government to be able to say yes; we've got an empirical study to back these up., but the philosophical principles underpinning these amendments—are that applicants must provide a certification at the beginning and at the end of any particular project as to the net job increases as a result of the particular project that was the basis of the loan. This is information that must be made public. The essential proposition is that to grow jobs in Australia, and where there is a need to move some facilities offshore—and we acknowledge that this happens; there are those who suggest that if we say 'made in Australia' then every single component has to be made in Australia, but that's a nonsense—in a globalised world, you will have some elements and some capacities that will need to be undertaken in other parts of the world. But the net impact will be in firms with over $150 million per annum. The net impact will be positive and that will have to be demonstrated in terms of the intention of the project, both before and after.

Finally, in regard to the criticisms of Efic in regard to any particular project, fancy calling on the Productivity Commission as an example—exemplar!—of any assessment of manufacturing in this country. In my opinion, they should have been privatised a long time ago. That would've been the first thing that could've been done to assist manufacturing in this country. We could've cut out the middle man, taken the position straight out from the IPA, and, I think, saved the public a lot of money. But to suggest that the Productivity Commission would be the paragon of virtue when it comes to assessing public enterprise in this country—I find that highly amusing coming from those great left-wing advocates, the Greens. To suggest that somehow or other Efic is responsible for what has been undertaken by the project managers in another jurisdiction is really stretching credulity. They are the providers of finance. That does not make them responsible for the management of a particular project any more than the Commonwealth Bank became responsible for the management of my household when I took out a mortgage with them. It's a nonsense to suggest that there's a direct link between the management of a project and the provision of finance.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

The question is that amendments (1) to (5) on sheet 8203, moved by Senator Carr, be agreed to.

Question agreed to.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

by leave—I move Australian Greens amendments (1) to (3) on sheet 8206 together:

(1) Schedule 1, page 4 (after line 3), after item 4, insert:

4A At the end of subsection 8(2)

Add:

(c) ensure it is not funding transactions that, directly or indirectly, support the extraction of fossil fuels (including in relation to EFIC's Northern Australia economic infrastructure functions).

  (2) Schedule 1, item 6A, page 4 (after line 27), at the end of section 16, add:

(5) In addition, EFIC must not make a guarantee or enter into a contract under this section in relation to a loan or a proposed loan if the loan or the proposed loan is to be used, directly or indirectly, for the purpose of extracting fossil fuels.

  (3) Schedule 1, item 6B, page 5 (after line 7), at the end of section 23, add:

(5) In addition, EFIC must not lend money under this section for the purpose of financing a transaction if the purpose of the transaction is to extract fossil fuels.

The Australian Greens have circulated two sets of amendments. The first set, which I have just moved, is in relation to putting a restriction on Efic's ability to use its expertise and to fund further subsidies for the fossil fuel industry. We are, of course, very concerned that, despite a number of issues that Efic could and should be spending its time on in relation to other types of export projects, and advancing ability for Australian industry, the last thing we should have is more Australian taxpayer money being spent on propping up the fossil fuel industry in this country. We hear over and over again from the Turnbull government—from many on the backbench, but particularly from those on the frontbench—that the fossil fuel industry doesn't get any subsidies and, indeed, that it's only the renewable energy sector that does. Well, what a load of bollocks. It's not true. We know that billions and billions of dollars, Australian taxpayer dollars, go every year into subsidising the fossil fuel industry in this country.

These amendments are in relation to stopping more Australian taxpayer money being spent to prop up the fossil fuel industry. At a time when we need to be reducing carbon emissions, at a time when we need to be finding better ways to reach our Paris agreement targets and at a time when we need to be transitioning to cleaner forms of energy, spending billions and billions of dollars and Commonwealth government resources on propping up and subsidising the fossil fuel industry is just madness—absolutely crazy stuff. We hear all the time from members of the Turnbull government that the renewable energy sector is propped up and subsidised. Well, it is subsidised nowhere near to the extent that the fossil fuel industry gets subsidised by the taxpayer day in and day out. Through this bill we have the opportunity for it to be expanded and propped up and subsidised even more, and the Australian Greens don't want to see that happen. We don't want to see more Australian taxpayer money wasted, propping up an industry when the time has come for transition.

Only yesterday Senator McGrath stood up in this place and said, 'Coal is good' and sat down. That is the level of maturity from this government in relation to tackling carbon emissions and, indeed, tackling a failing fossil fuel industry. We know that we must transition in order to save the planet, that we must put renewable energy on a firm footing, because that is what is going to be needed to power the nation in the future. In fact, it's working right now. The craziness of the push within the Turnbull government to say now that they are prepared to pay to keep coal-fired power stations burning even longer, polluting even longer, for more and more years, just because the Turnbull government doesn't have the gumption to take on this industry and the gumption to take on the right-wing rump in the backbench and, of course, former Prime Minister Tony Abbott. This is the level of madness and the lack of maturity that is coming from this government. If we can try and save some Australian taxpayer money through this process to stop Efic funding being used to prop up the fossil fuel industry, then we should.

It doesn't make financial sense; it doesn't make environmental sense and it is ridiculous to see, at a time when we need to be decarbonising the economy, more backdoor ways of giving subsidies to the fossil fuel industry. That's what this amendment is about. Anyone who cares about reducing carbon emissions and ensuring that taxpayer money is spent in the places where we will get the best bang for our buck in terms of energy and resource production should be supporting this amendment. Wasting Efic's resources and Efic funding to prop up the coal industry, to prop up the corrupt project that is Adani, is simply not good enough.

We know that the Adani coalmine will only be able to go ahead if the Australian taxpayer funds a billion dollars and even then it's questionable. The banks won't bankroll it because it doesn't make economic sense. The planet would cook if we allowed the Adani mine to dig as much coal out of the ground as it wants to ship off and have burnt. We will not be able to fulfil the Paris Agreement; we will not be able to fulfil the very necessary requirements to decarbonise the economy, and all at the cost of the Australian taxpayer. The billon dollars that the dodgy, corrupt Adani company wants, the billion dollar mates-rates loan, should not go ahead. It's being facilitated via Efic and the NAIF, and it is a waste of Australian taxpayers' money.

Most people out there are thinking, 'Hang on, we're doing it pretty tough. We've got low wages growth; we've got high unemployment; the cost of living continues to soar; the government says it has to cut funding to schools and hospitals. Meanwhile, we have this government agency handing over a billion dollars to Indian coal company Adani. Where are the government's priorities?' Well, the priorities are propping up and subsidising fossil fuels, propping up and subsidising Adani. Meanwhile, schools don't get the funding they need; hospitals don't get the funding they need. We have an NBN across this country that is not being rolled out as fast and as well as it should be because the government hasn't got the funding to do it. Meanwhile, Adani continues to laugh and know that it's pulled the wool over the eyes of the federal government.

We're waiting for a decision on whether this loan will go ahead, because we now have the peculiar situation where the minister who is in charge of this sits in the other place—this is, of course, Minister Joyce—with a big cloud over his head. We don't even know if he's eligible to be in the parliament, let alone eligible to be a minister, yet this is the person who is responsible for signing off and handing over a billion dollars of Australian taxpayer money to Indian coal miner Adani. It's a waste of money and a decision of a minister who's not even legitimate.

I can bet your bottom dollar, Chair, that, if Minister Joyce does sign off on this project and does give the taxpayer handout—the corporate welfare cheque to Adani—it will be challenged in the courts because not only is it economically irresponsible but also the minister in charge should not even be there. So this whole issue becomes even murkier and murkier. One of the things we can do today is stop Efic and, therefore, the NAIF from being able to continue to prop up, with public funds, the fossil-fuel industry. In particular, we can stop the NAIF from being able to fund the billion-dollar cheque to Adani.

When you hear cries for the need for economic responsibility, mutual obligation and the crackdown and the kicking of people on welfare payments from this government, you've got to wonder what on earth is going on when we can't help unemployed people in this country to get enough income support so that they can get a job, but we're happy to hand out corporate welfare to one of the biggest, greediest and dodgiest mining companies in the world. That, of course, is the Adani Carmichael coalmine. I commend this amendment to the Senate and will be watching very closely to see who supports it.

Arthur Sinodinos (NSW, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

I've already addressed the issue of the Greens amendment on the removal of the FOI exemption. I will say, in relation to removing Efic's ability to support fossil fuels, that we will also be opposing this amendment. Efic provides support to Australian exporters where private financial institutions are unable or unwilling to support—in other words, where there is a gap. It is not for the purposes of subsidising. It would be an unprecedented step for a government to legislate to ban the financing of a product that, the last time I looked, is beneficial, legal and a major export earner for the country. Furthermore, the broad sweep of the language in the amendment, directly or indirectly, would even stop Efic financing SME-equipment suppliers to coal-export projects and potentially go much broader than that, so we will not be supporting this amendment.

Let me make the point that issues to do with emissions and the control of greenhouse-gas emissions and the like, pursuant to our strong commitments under the Paris Agreement, are a separable issue to whether support is provided to a coal project within Australia. The other point I will make is that, when Efic finances overseas projects relating to coal or support of SME suppliers of coal, it adheres to OECD arrangements on export credit disciplines and on coal-fired power plants which came into effect in January this year and is bound by the OECD recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence. Efic also adheres to the Equator Principles, which is a globally recognised benchmark to manage environmental and social risk in projects. For these reasons, we will not be supporting this amendment or the other amendment.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

Can I address both sets of amendments, although I understand that Senator Sarah Hanson-Young has yet to move the amendments on sheet 8207. The opposition will not be supporting either set of amendments. On sheet 8206, there are questions that go to the banning of the resources project's support. The definitions, frankly, as outlined in these amendments, that specifically refer directly or indirectly are far too broad. With regard to the impact, it would lead to a significant loss of jobs for Australian workers, and it would undermine supply-chain companies that are currently operating within the industry. They're operating in terms of the suppliers to the mining industry. It will also undermine professional services companies operating within the resources sector as well. So for either those engineering companies that supply the resources sector or the professional services companies that are currently within the remit of the ethics charter, it is inappropriate that they should be excluded from that.

The current arrangements that Efic operates on were, in fact, outlined in a letter that former minister Andrew Robb distributed back in 2014, which I understand remains in force. It points out that Efic does not provide support for onshore resources projects and related infrastructure, given the private sector is active in that part of the market. In essence, the way Efic operates is that it provides finance where there is a gap—I think that's the word they use—in the market and so Efic is able to provide support for projects that involve suppliers to domestic resource projects that have an export component. However, that arrangement remains in force. We, the opposition, believe that strikes the right balance, where there is a market gap and where it helps to create Australian jobs.

In regard to the second proposition by Senator Hanson-Young on FOI matters, we are more sympathetic. We understand the intention of the amendments, and there is always an amendment in regard to transparency when it comes to public funds. However, there is also a need to ensure that Efic is able to do its job properly, and there is a legitimate issue here about genuine commercial-in-confidence matters. Efic is not there to provide commercial advantage to others that are competing with its operations or those that are applying to it for support. It would be a ludicrous proposition if, under FOI, competitors for a particular project could secure commercially sensitive materials and then use them against a competitor.

While we are sympathetic to the intention of providing more public information about the operations of public enterprise, we do not want to support the unintended consequences of crippling public enterprise—which would be the consequence of these amendments as they are put forward. We are more than happy to work with other parties in this chamber about ensuring greater transparency, but we will not be supporting these amendments.

The CHAIR: The question is that items (1) to (3) on sheet 8206 be agreed to.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

The remaining amendment is on sheet 8207. This is in relation to removing the exemption that Efic currently has in relation to freedom of information requests. I did speak about this at length during the second reading speech and in the questions to the minister previously at the committee stage. I just want to reiterate that this bill is asking the parliament to endorse expanding the powers, responsibilities and role of Efic; meanwhile, we know that there are big questions over Efic's ability to be straight and up-front with the parliament and the Australian people about the projects that it has already been funding and supporting. You'd think that, if the government honestly wanted to expand the role of Efic, they would get Efic's house in order first. They've missed the opportunity to do that.

This amendment injects necessary transparency into this process. If we're going to have an expanded role then the public, the parliament and the taxpayers need to know what Efic is doing, what types of projects it is funding and how it is operating. I've heard the minister already today say that Efic has more transparency than a private bank. Okay: it's a Commonwealth agency, it is Australian taxpayers' money, so it should. But what we see in reality is that every time there are questions to Efic from this place, in Senate estimates and through other avenues available to us as senators, about what Efic has done—issues in relation to projects that it has supported, how it gets to the due diligence stage for projects such as the Adani coalmine and the associated rail line—Efic pulls the non-disclosure card. It continues to duck and weave on genuine questions that should be answered. If there's nothing to hide, what is the problem?

While we've heard that there are genuine commercial-in-confidence issues in relation to companies, that is the excuse that always gets dragged out when government agencies don't want to be straight with the Australian people. That's what is constantly used as the catch-all excuse for not being transparent and for allowing secrecy to rule. It just doesn't cut it. These are billions of dollars that are not just there willy-nilly; this is the Australian people's money. They deserve to know. There needs to be an increased level of scrutiny and accountability, because these are public funds. Not only is Efic caught up in backing projects that have created instability in parts of the region, such as PNG or the South Pacific, in relation to Bougainville, and other areas but we also know that every time you ask Efic about why they made these decisions, what risk analysis they used, whether they considered the social, economic and political impacts, and how they missed that some of these terrible consequences would roll out in places like PNG, for example, in relation to the ExxonMobil project, you get nothing back.

Efic don't want to talk about these things. They pull the 'we don't know and we can't tell you' card. We need to break open what is a secretive and what has become an incredibly opaque organisation. This is a public institution. They are using public funds and the voters have a right to know. What we now see, as Efic moves into funding domestic based projects, such as in relation to the Adani Carmichael mine, is that the public have an increased desire to know why those decisions are being made. Who is making those decisions? What due diligence is being done? And yet, over and over again, we get nothing out of the bureaucrats who sit within the Efic framework, because of the ridiculously strict exemption in relation to freedom of information. We need to reform this. I'm not, as a matter of principle, opposed at all to the original intentions for what Efic was meant to do, but I fear that Efic has moved substantially away from its intended mandate. It has done that under a cloud of secrecy and it now has an opaque framework. Australian taxpayers have every right to be concerned.

Of course, it suits other government agencies, such as the NAIF, to be able to rely on the secret nature of Efic so that they don't have to maintain reasonable levels of transparency and respond to reasonable questions, whether they are questions from senators in this place, members from the other place, or, indeed, the public. We know that the NAIF has used the cover of Efic secrecy to not be straight about what is going on and why decisions are being made. No-one has been able to articulate why on earth Adani is even being considered for a billion-dollar public subsidy, when the Adani company themselves have said they don't need it; it's just that it's available. That means they should not meet the criteria. Why are they still sitting there like a puppy dog on the lap, begging for loose change—loose change that is costing the Australian taxpayer a billion dollars?

I saw the Prime Minister in his press conference just now refer to the fact that burning coal has never been so profitable. That's what the Prime Minister has just said today: burning coal has never been so profitable. I guess if you're funding and subsidising the coal industry with billions of dollars of Australian taxpayer money, anything could become profitable. What a load of gobbledygook. This government is so desperate to prop up the fossil fuel industry and the coal industry in this country that they not only allow Australian taxpayer money to roll out the door; they know that the public won't be happy, so they do it through this secretive, opaque mechanism. We need to blow this open. I think it's ridiculous that the government comes here asking this place to give Efic more powers yet less accountability, and makes no effort to clean up the lack of transparency that we all know is rank within the current Efic set-up. I commend the amendment to the House.

The CHAIR: Senator Hanson-Young, you need to move item (1) on sheet 8207.

I move the amendment on sheet 8207 which I have just referred to:

(1) Schedule 1, page 5 (after line 19), at the end of the Schedule, add:

Freedom of Information Act 1982

8 Division 1 of Part II of Schedule 2

Omit "Export Finance and Insurance Corporation, in relation to documents concerning anything done by it under Part 4 or 5 of the Export Finance and Insurance Corporation Act 1991".

Nick Xenophon (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

I indicate that my colleagues and I strongly support this amendment moved by Senator Hanson-Young in relation to FOI. I know the minister expressed a concern that the ability to FOI Efic will compromise confidentiality inherent in banking. Whilst I appreciate the need for confidentiality in business where appropriate, I point out that such information is protected by exemptions in the FOI Act, namely section 47G, and other exemptions in the FOI Act will also apply. So, noting the protection that the FOI Act affords businesses, I and my colleagues will vote in favour of the Greens amendment, which promotes greater transparency.

The CHAIR: The question is that item (1) on sheet 8207 moved by Senator Hanson-Young be agreed to.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.