Political pressure risks $5 billion infrastructure fund becoming a barrel of pork
As the $5 billion Northern Australia Infrastructure Facility (NAIF) considers a $1 billion concessional loan to foreign coal company Adani, a new report from The Australia Institute raises major concerns about the NAIF’s political independence, governance, resourcing and public transparency.
Widespread media coverage during December that NAIF had ‘conditionally approved’ the $1 billion proposal was not generated by the NAIF. While the Minister and Deputy Prime Minister repeatedly promoted the proposal, NAIF refused to comment or even acknowledge the proposal existed, citing confidentiality.
Despite its substantial funds and recent publicity, information about the NAIF’s processes is sparse – possibly because, in the Minister’s words, “there is not really a formal submission or application process” but “discussions that occur”.
“To apply for some of the five billion dollars on offer, the NAIF’s form asks only for a name, email address and a ‘message’,” Researcher and report author, Tom Swann said.
“Key policies are still missing and the publicly available guidance leaves much unclear. How will funds be prioritised? What scrutiny will be applied to the ‘public interest’ requirement? How will negative impacts be considered?
“The Environmental and Social Review policy simply says NAIF will not fund projects that do not have approval. It’s hard to see how that is ‘best practice’.
“Compared to other comparable bodies, NAIF is behind in not only behind terms of process and disclosure, but it also its operational funding. It appears to be only a handful of staff.”
“The government has put the NAIF in a difficult situation. The immense public political pressure to assess the loan ‘within months’ makes it even more important for this independent body to ensure it has strong frameworks for review and public disclosure.
“Both Adani and the Minister have suggested the loan is ‘not critical’. That means it would not be eligible for NAIF funding. On the other hand, concerns about commercial viability bear on loan repayment, and there are serious unanswered questions about claimed public benefits.
“Our polling shows people would prefer these funds spent on renewable energy, the NBN, infrastructure in our congested cities -- virtually everything else, other than infrastructure for coal companies.
“The government needs to explain why billions of dollars for coal trains for foreign miners is a greater priority than building critical infrastructure in populated areas,” Swann said.
The Australia Institute also lodged FOI requests with the NAIF. The FOI briefing note is here.