The Federal Government’s Northern Australia Infrastructure Facility (NAIF), announced with great fanfare 18 months ago, has yet to invest in single project.
“This facility will provide financing to build the transport, energy, water and communications infrastructure needed in our north,” said Josh Frydenberg, the Minister for Industry Innovation and Science, when he announced the fund in May 2016.
“This will create jobs, enhance investment, and unlock the full potential of this vibrant region to grow the northern Australian economy.” Fine words, but there appears to be little urgency to putting them into action.
The NAIF came into existence on 1 July 2016. Costs so far include over $1 million for wages, $630,000 for directors’ fees, $100,000 for travel, and $13,000 for functions.
CEO Laurie Walker, a banker and lawyer who has worked at a senior level for both ANZ and CBA, receives a $410,000 salary. The agency’s website shows that she has given many presentations at conferences, but she has yet to sign off on a single investment, after more than a year on the job.
So far there is nothing to show for the agency’s establishment, and the natives are getting restless. Two weeks ago the Government said the first project would be announced that week, but still nothing has happened.
It is widely believed that the first investment is intended to be a low interest $1 billion loan to Indian coal company Adani for a rail line to its controversial giant Carmichael coal mine in Queensland’s Galilee Basin. But that announcement seems to be on hold as disquiet grows about the government’s energy policy and about Adani itself.
On 2 October the ABCs Four Corners TV program exposed the Indian company’s sometimes dodgy business practices, and community resistance to the mine culminated in major demonstrations across Australia last weekend.
Some have blamed NAIF’s inaction on political uncertainty. Resources Minister Matt Canavan had responsibility for the agency, but resigned from Cabinet after doubts were raised about his citizenship. Responsibility now lives with Deputy Prime Minister Barnaby Joyce, who is also under a cloud.
Mr Joyce says this is not a problem, and that NAIF is a statutory body that can make its own investment decisions. But the fact that it has not yet made any, well over a year after it was formed, has called into question why it is needed at all.
Even Rupert Murdoch’s News Limited, normally supportive of the government, is critical of the inaction. “$5 billion North Australia fund yet to approve a single project,” screamed a headline in the Courier-Mail last month. “Still waiting for NAIF,” said the Townsville Bulletin.
Predictably, the Opposition is not happy. Bill Shorten told the NT News, another Murdoch outlet, in a prominently displayed article, that the Northern Australia Infrastructure Fund was a “poster child for inaction.
“Its dealings are opaque … nothing has happened,” he was quoted as saying. “Some of its directors are faced with allegations of conflict of interest. It is like a high rollers club and you don’t get in without $100 million.”
The same article gave examples of investors in the Kimberley region of Western Australia laying off staff because of NAIF’s inaction.
NAIF has also been criticised for blocking freedom of information requests about information as basic as the dates and locations of its board meeting. It says it is keeping this information secret because of concerns over protests and “media interest.”
It is not a good look. Nor is it likely to get much better.
If NAIF approves the Adani loan, it is likely to face a High Court challenge because of Adani’s past behaviour and the project’s proven environmental challenges. If it does not, its continued inability to make any investment decision at all will also cause it problems.
NAIF, uncapitalised, is a word from the French which means an innocent person who doesn’t know what’s happening. It seems an appropriate acronym.
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