FRIDAY, 4 DECEMBER 2020
SUBJECT/S: Northern Australia Senate inquiry interim report; recommendations to fix Northern Australia Infrastructure Facility
PAUL CULLIVER, HOST: How much money is actually spent from this big fund that the Australian Government set up - the Northern Australia Infrastructure Facility? It's been a big question hanging over this Government. And someone who's wanted to look into it is ALP Senator for Queensland, Murray Watt. He's the chair of a select committee that's looked into the Northern Australia agenda. They've just put out an interim report. Senator, good morning to you.
MURRAY WATT, SHADOW MINISTER FOR NORTHERN AUSTRALIA: G'day Paul, how are you going?
CULLIVER: I'm well. What were the problems with the Northern Australia agenda of this Government that you saw fit to investigate?
WATT: Well, the feedback that I'd received very early in taking on the Northern Australia portfolio was that, for all of the great expectations that people had around the Government's Northern Australia agenda, it really hadn't live up to expectations. And so we felt that having a Senate inquiry to review how this agenda is proceeding would be worthwhile. And I have to say, the hearings that we've held so far really do confirm that. Unfortunately, the agenda hasn't really delivered on what people had hoped.
Probably the best example of that is the Northern Australia Infrastructure Facility which, as you know, I've referred to many times as the No Actual Infrastructure Fund. Because five years after it was announced, the Government has only released about $218 million from its $5 billion budget, which is less than five cents in the dollar. When that Facility was first announced five years ago, the Government said that it would be funding projects, creating jobs all around Northern Australia, including in Central Queensland, and unfortunately, it's just been another example of this Government making a big announcement and never actually following through.
CULLIVER: So you've come up with a list of recommendations, and I should reiterate it is an interim report, but nonetheless, pretty much all of your recommendations here are to do with improving the way that this NAIF - this fund - does conduct itself. Broadly, how do you think it should improve the way that it functions?
WATT: Yeah, you're right, this is an interim report from the committee and we will hand down a final report in the new year which is a lot broader. But we thought it was important to focus on the NAIF at the moment because the Government has itself been reviewing how it's been performing. And we're hopeful that the Government will take up these recommendations as it starts to make changes to the NAIF.
The key recommendations really are about things like broadening the types of projects that the NAIF invests in. What we've found is that the NAIF has a preference for large projects in the tens of millions, or hundreds of millions of dollars. And while those sorts of projects certainly exist in Northern Australia, there's a lot more smaller projects which are looking for financing, haven't really been welcomed by the NAIF, but could still be creating jobs. So we've recommended that there be a much bigger focus on funding those kind of smaller projects to get them off the ground as well. A lot of that comes down to making sure that people who are applying for NAIF loans have the support to go through the application process. Some of the feedback that we received was that if you're talking about a relatively small business that might be run by a family or another small operation, they may not have the sort of H.R. department and the administrative people who are experienced in putting in big applications for government financing. So providing that sort of support would be worthwhile as well.
One of the other recommendations is to make sure that NAIF-funded projects have a much stronger focus on sourcing their supplies and their labour locally. It's not much good to a local region if a project gets funding through the NAIF, but then that project ends up bringing all of its labour or its contractors up from down south. We want to make sure that that money really does flow into the local community and creates more jobs as well.
So they're the types of recommendations we've made, they're in addition to some of the changes the Government has already flagged. So, as I say, we're very hopeful that the Government will listen to this, especially because this report is actually a unanimous report. We've had members of the Government, members of the Opposition, members of the crossbench all sign off on this report. And when you can get that that breadth of support, I'd like to think it's something the Government's going to listen to.
CULLIVER: Just so we can really get our head around this, some specificity about the projects would be good. What kind of projects are we seeing currently being funded and what kind of projects would you like to see funded? Like, you know, in terms of actual, what are we talking about here?
WATT: Well, this is the problem, is that there aren't too many things to point to, in terms of what the NAIF has actually released funding for. It has now approved funding in Central Queensland for a meatworks out around Clermont. But that project hasn't received any funding yet. But the feedback that I've received is that there's a broad range of industries that are looking for financing, obviously things in the sort of traditional sectors such as mining and agriculture, but obviously Northern Australia has developed a lot of expertise in things like international education, in renewables projects, in manufacturing projects, in aquaculture. And some of those projects haven't necessarily found it easy to get funding through the NAIF because they are a little bit out of the ordinary. But that's really the point of the NAIF, is to provide a financing facility for businesses and industries that are a little bit out of the norm and therefore, the commercial banks aren't very interested in lending money to. But they do stack up, they do offer job potential, and that's exactly where the Government should be getting involved.
CULLIVER: What happens next? How do these changes, if indeed the Government wants to take these changes up, how do they do it?
WATT: Well, the Government has flagged that it intends to bring in legislation in the new year to make a range of changes to the NAIF. And we haven't obviously agreed to that, at this point, because we want to see the legislation first. But certainly there are some encouraging noises being made by the Government about the types of changes that they want to make.
As I say, I'm hopeful that they will also pick up some of these recommendations, so that we can really get the NAIF firing. You know, I'm an Opposition member, my job is to hold the Government to account, but we really want this NAIF to work. We think that it actually can make a really big difference in northern Australia by providing finance to the types of projects that the commercial banks aren't interested in. But it hasn't worked to date, it hasn't lent enough money, it hasn't actually got money out the door. And these sorts of changes that we're recommending, we think can go a long way to fixing that.
CULLIVER: All right, Senator, thanks for your time today.
WATT: No worries, Paul. Good to talk to you.