ABC COUNTRY HOUR NT
TUESDAY, 8 DECEMBER 2020
SUBJECT/S: Northern Australia Senate inquiry interim report; recommendations to fix the NAIF; live exports.
MATT BRANN, HOST: A Senate inquiry into the effectiveness of the Federal Government's northern Australia agenda has handed down an interim report. It's got nine recommendations in it, and most of them are targeted at improving the NAIF- so that's the Government's $5 billion loan scheme that was designed to get projects in the north up and running. The Shadow Minister for Northern Australia is Senator Murray Watt. I had a chat to him just a moment ago, and I started by asking him what he thinks the Coalition is getting right when it comes to developing the north...
MURRAY WATT, SHADOW MINISTER FOR NORTHERN AUSTRALIA: Well, I think the Government is getting a lot of the talk right. And I think it was important when the Northern Australia agenda was released five years ago that the message was really conveyed to all of Australia, that there is huge potential in the north, and that with a bit of effort and a bit of investment, the entire country can benefit from that. So I think a lot of the rhetoric and speeches that we're hearing from the Government is right, to continue to develop that level of excitement about what's possible in the north, especially as we come out of COVID-19.
BRANN: So that's the only compliment you have, that it's getting the rhetoric correct?
WATT: Yeah, pretty much. I mean, unfortunately, I think this is another example of what we see from Scott Morrison and his Government, which is that they make big announcements, they deliver big headlines, but they don't really, sort of, follow through. And that's not really just my personal opinion. That's the feedback I've been getting consistently as I've got around northern Australia over the last 18 months, and as we've conducted this inquiry. Unfortunately, the feedback consistently is that the Northern Australia agenda just hasn't really delivered on the expectations that the Government raised when it released the agenda five years ago.
BRANN: What do you make of feedback that there's not enough bipartisanship when it comes to developing the north, and there is a bit too much politics and having a crack at each other?
WATT: Well, we've tried to be constructive with the Government in terms of how we've approached the Northern Australia agenda. We supported it when it was released. We supported the establishment of the NAIF as its centrepiece, as a funding body, when it was released. We've been actually calling on the Government to make changes to the NAIF for about three years so that it can actually work. We're not, sort of, just picking holes in it, hoping it fails. We actually want to see this thing work and deliver the projects and jobs that we were all led to believe would follow from it. So if we actually didn't want to see it work, we could just sit on our hands, not say anything, not try and improve it. But we've held a number of Senate inquiries and made other contributions which have made positive, constructive suggestions to the Government to improve the NAIF and improve the Northern Australia agenda. I'm pleased that the Government has in some cases picked up those recommendations, but it’s disappointing that it seems to take so long before they actually do it.
BRANN: In this interim report, a lot of recommendations are focussed on the NAIF, how do you think it can be improved?
WATT: Well, as I say, I'm pleased that a few weeks ago the Minister announced that they are going to make some changes to the legislation next year. And that's the reason why this interim report really focuses on the NAIF rather than the agenda as a whole. We want to make sure that these recommendations can get picked up by the Government and included in that legislation.
It's not particularly complex, the changes that we think need to be made to the NAIF, and I should say, this is a bipartisan report. The recommendations are unanimous. The inquiry includes Government senators, Labor senators, One Nation senators and Greens senators. So that's another example where there's been some goodwill across all sides to try to get the NAIF working.
And it involves things like getting the NAIF to focus more on smaller projects rather than only the kind of mega-projects that they've been interested in up until now. The feedback we've received from many project proponents across northern Australia is that the NAIF and hasn't been so interested in smaller projects-
BRANN: -and on that, one of the recommendations is for the Government to consider converting part of the NAIF to small grants. So from loans to grants. Have you had any feedback from the Government? Is this a chance?
WATT: So far, the Government hasn't been willing to do that. And again, we're hopeful that they will consider that. Obviously, if you change some of the NAIF's funding from being loans to grants, then that has an impact on the bottom line of the Government, but we can't ignore the consistent feedback we've had from people that there is a real appetite for small grants, for small projects. Not every project is in a financial position to take out a loan. Equally, there are many projects, particularly in First Nations communities, that actually would really benefit from the Government taking an equity stake - some level of ownership in the project - rather than just handing a loan over. So we do think that's important and we think that that is a way to really unlock some of those smaller projects that are really abundant across northern Australia and can still create the jobs that we all want to see.
BRANN: Just looking at recommendation number seven, how do you feel about the staff working for NAIF?
WATT: Look, I have no criticism of the individuals working for the NAIF or its board members. I actually gave a speech to the Northern Australia conference in Rockhampton a couple of weeks ago where I made the point that this isn't about the officials working for the NAIF. The thing that's been missing from the NAIF is the kind of political leadership to make the changes to the NAIF that are really needed to make it work-
BRANN: -and to fill out our audience in, that recommendation talks about linking the payment of bonuses to the funds being actually drawn from the facility.
WATT: Yeah, what that's about is that the NAIF does have some very highly paid executives who no doubt work very hard for their dollars, and some of them also receive bonus payments. And the problem we've got at the moment with the NAIF is that while it has now announced funding for a whole range of projects in the Northern Territory and across the north generally, there really has not been a lot of money actually released.
So far, the NAIF has got $5 billion to lend. It was announced five years ago. It's actually only released about $218 million of that funding, which is less than five cents in the dollar. And I think after five years, people probably expected there to be a bit more to show for it. And what we're suggesting is that perhaps some of those bonus payments that these executives get should also be tied to how much money they’ve actually released. The job isn't done, when a loan is approved or funding is committed, the job's done when the loan is actually made and that business can actually start using that funding to create the jobs and build the projects.
BRANN: You say five cents in the dollar, the Coalition says $2.4 billion from NAIF's been committed. Is it really the Government's fault and the people working for NAIF's fault if these private companies just aren't in a position to draw on the loan and spend it?
WATT: Well, the Government is correct to say that over $2 billion has now been approved by the NAIF, and that's a good thing. But as I say, I think the real test of the NAIF's success is how much money they've got out the door.
I don't think you'd expect me to give you a pat on the back if I said to you 'Matt, I'm going to lend you 100 bucks' and I don't actually do it and I only give you five. And that's the situation, with the NAIF at the moment.
So I think then the NAIF has got to do some more work with project proponents, so that we can really achieve some of those milestones on projects more quickly, so that we start seeing those jobs delivered, that are being promised. What it really gets back to, as I say, is that if the Government is going to be out there crowing about the funding commitments that the NAIF's made, they've actually got to follow through and deliver.
BRANN: Just finally, we're about to hear from one of your Labor colleagues on the Country Hour - the brand new Shadow Minister for Ag, Ed Husic. He's been critical of the live export industry in recent years. Should the northern cattle industry be nervous about his appointment?
WATT: No, I don't think so at all. And look, I'll let Ed speak for himself as to his position on that, but Federal Labor's position is very clear. We're not talking about banning live exports. I've had meetings myself with the Cattlemen's Association over the last 18 months and developed a good relationship with them. I know Warren Snowdon, as the Member there for a very long time has got a strong relationship with them and is supportive of the industry. So I don't think the industry has got anything to fear that way. We, of course, want to see more exports and getting on top of this relationship with China is obviously critical to that as well.
BRANN: I know you're busy today, thank you so much for your time.
WATT: No worries, Matt, good to talk.