The Morrison government has moved to seize greater control of the $5 billion Northern Australia Infrastructure Facility (NAIF), with amendments passing the house of representatives that gives ministers greater influence over how it invests its funds.
The proposed changes have raised fears that the fund would be used to underwrite new fossil fuel projects across Queensland, the Northern Territory and Western Australia, including that NAIF will be used to finance new gas pipeline infrastructure, as part of the Morrison government’s ‘gas-led economic recovery’ agenda.
The NAIF was established by the Coalition government in 2016, with $5 billion in funds dedicated to providing concessional finance for projects across Northern Australia, in an effort to boost economic opportunities in regional and remote parts of Australia.
Amendments to the NAIF’s legislation are required to extend the life of the fund, which is currently set to expire at the end of this year. Amendments passed by the house of representatives on Thursday will extend its life for a further five years, until the end of 2026.
However, the amendments will also allow the fund to financially support ventures outside of Northern Australia and will provide federal ministers with greater power to direct its investments, raising concerns around the potential for political interference and influence in its investment decisions.
The changes will see a government appointed member of the NAIF’s board, creating a dedicated permanent position for the department secretary.
While the NAIF has made some positive contributions to growing Queensland’s clean energy infrastructure and will provide a $610 million loan to Genex to partially finance the construction of a new pumped hydro energy storage project in Kidston, the Morrison government has already tried to direct the NAIFs funds into supporting coal projects, including infrastructure to support Adani’s Carmichael Coal mine.
The Morrison government has already committed substantial budget funding to support the development of up to five new gas basins across Australia, including the Galilee and Beetaloo basins, and environment groups have called on the Morrison government to rule out using the NAIF to fund new gas pipelines.
“If the Government is serious about getting to net zero emissions as soon as possible, they need to ensure that NAIF funds aren’t used for polluting fossil fuel projects including gas infrastructure and instead support the creation of jobs in sustainable industries of the future,” 350.org Australia’s CEO Lucy Manne said.
“Banks and financial institutions in Australia and around the world have ruled out financing coal, oil and gas projects, the same should be done with the NAIF.”
Independent federal MP Zali Steggall sought to introduce further amendments that would have prohibited the NAIF from investing in fossil fuel projects, but the Morrison government used its majority in the house of representatives to block these additional changes.
“Northern Australia has enormous potential to supply the world with energy harnessed from remarkable wind and solar resources. The Sun Cable project and the Asian Renewable Energy Hub are two examples of what is possible,” Steggall told parliament.
“The NAIF should remain independent. It should invest only in clean technologies that are actually for the future of northern Australia. Anything else would be money wasted.”
Federal resources minister Keith Pitt said the NAIF “proudly supports” resources projects.
“It was the height of hypocrisy to see inner-city southern MPs trying to delay the Bill because the NAIF proudly supports resources projects throughout the north,” Pitt said.
“The message from Adam Bandt and the Independent “Green” member for Warringah to the north was clear – we’re against jobs for the north.”
“NAIF supports a wide range of industries and I look forward to the Bill passing through the Senate so we can deliver new projects for the north as soon as possible,” Pitt added.
The legislation will still need to navigate the senate, where the Morrison government will need to strike a deal with either Labor or the crossbench to ensure its passage.
Labor appears to be broadly supportive of the changes, with shadow minister regional development, Catherine King, saying that the opposition party had been calling for changes to the NAIF’s investment mandate for some time, and Labor voting to support the passage of amendments through the lower house.
Lock the Gate Alliance spokesperson Carmel Flint called on the Senate to prevent the NAIF from being further opened up to fossil fuel projects.
“The NAIF is no longer about supporting Northern Australia or the people who live there. It has become a shadow fund to support the Coalition’s ill-fated obsession with spending taxpayer money on backing big gas companies to open up Australia for fracking,” Flint said.
“We’re calling on the Senate to ensure there is thorough scrutiny of this Bill and that changes are made to ensure that it doesn’t sell out rural and regional Australia and drive dangerous global warming that is already hurting communities across the nation.”