Praise for government ringing in changes to NAIF
LABOR has praised the Australian Government for ringing in the changes to its often-criticised $5 million federal loans scheme to get the money flowing towards more Northern Australia infrastructure projects sooner.
Minister for Resources, Water and Northern Australia Keith Pitt said his government was determined to transform the Northern Australia Infrastructure Facility (NAIF) into a more proactive investor for the benefit of Northern Australia.
"The changes will speed up the flow of funds to approved projects, give projects a greater range of debt-support options, and allow NAIF to make equity investments," Mr Pitt said.
"The reforms will streamline the approval process for NAIF to decide the most appropriate financing option for each project, including debt guarantees and the purchase of bonds, without the need for each decision to seek multiple approvals."
One of the key changes was the removal of the existing ban on equity investment which would increase NAIF's capacity to actively support development in communities across the north as Australia deals with the impact of the COVID-19 pandemic.
Mr Pitt by removing the ban, it would allow NAIF to take a non-controlling equity investment in a project.
"There will be an overall investment cap on equity of $500 million (10 per cent) from the NAIF's total $5 billion investment fund," he said.
Minister Pitt said the changes were in line with the findings of the NAIF Statutory Review and in addition to the reforms announced in the October Budget.
He said legislation on the reforms and those announced as part of the 2020-21 Budget would be introduced into parliament early next year.
"The changes mean we can better use the expertise and stakeholder networks of the NAIF to support the government's agenda of economic development in Northern Australia and to deliver on NAIF's key objectives of growing the population, jobs and opportunities in regional communities in the north," he said.
Assistant Minister for Northern Australia Michelle Landry said her government had listened to stakeholder views put forward in the NAIF Statutory Review.
"The reforms, coupled with the October Budget measures, will make it easier and faster for suitable projects to access NAIF funds, and to get projects underway that will generate jobs and further develop Australia's north," Ms Landry said.
"NAIF has already made investment decisions worth $2.4 billion, supporting real jobs and development throughout the COVID-19 pandemic and building confidence in Northern Australia as a great place to live, work, and do business."
The changes come after the Senate Select Committee on the effectiveness of the Australian Government's Northern Australia agenda spent more than a year conducting face-to-face hearings in Darwin, Townsville, Mt Isa, Mackay and Nhulunbuy, along with a series of video conferences.
In the committee's recently released interim report provided a series of nine unanimous recommendations to fast-track growth in the region - eight of which were related to overhauling the NAIF.
Shadow Minister for Northern Australia Murray Watt said Labor welcomed the government recognising the NAIF had failed to deliver the projects and jobs that were promised.
"It appears the government has adopted some of the recommendations from the Senate select committee's interim report handed down last week, and that is very encouraging," Senator Watt said.
"However the north is right to be sceptical about whether these changes will be seen on the ground in Central Queensland.
"That's because we've seen lots of NAIF announcements, but very little delivered."
For all the Government's promises, in the five years since it announced the NAIF, Senator Watt said the NAIF had only released five cents in the dollar from its $5 billion budget, with only $10 million released in Queensland.
"We will review the government's proposed changes when we see the legislation," he said.
"Now it is up to Keith Pitt, Michelle Landry and their team to prove they are serious about getting the NAIF right this time."
Important NAIF changes confirmed this year
• Extending the NAIF investment period by five years to 30 June 2026.
• Streamlining the approval process for the NAIF.
• Increasing the NAIF's risk appetite to back more job creating projects.
• Collaborating with lending institutions to support smaller projects ($1m-$10m).
• The definition of public benefit to be simplified and expanded to include factors such as jobs, regional income, and opportunities for local suppliers (including Indigenous).
• Adjusting the NAIF board to ensure it has the right mix of skills and capabilities; including Indigenous development; and
• Appointing a Commonwealth representative to the NAIF Board to strengthen the NAIF's strategic direction.
Further information on the reforms and the NAIF Statutory Review are available on the Northern Australia website.