Speeches

Speech - Adjournment Debate [NAIF]

May 29, 2017

HON. WAYNE SWAN MP

FEDERAL MEMBER FOR LILLEY

 

ADJOURNMENT DEBATE (NAIF)

CANBERRA

MONDAY 29 MAY 2017

***CHECK AGAINST DELIVERY***

 

In March I referred the governance and operations of the Northern Australia Infrastructure Facility to the Auditor-General for his consideration, and I am pleased to note that he has now placed it on his future work agenda. The NAIF provides no security for the $5 billion appropriated to it and, as it is currently structured, the NAIF represents an opportunity for a domineering minister to allocate billions of dollars without any checks or balances. The board has a limited role, and the minister is the sole approving authority and can operate in complete secrecy.

In March, I compared the NAIF's governance policies with those of the CEFC, which are the gold standard of government finance bodies. In comparison, the NAIF looks as dodgy as Lehman Brothers—and of course we all know how that ended.

Minister Canavan should not be subsidising billionaire friends of the Queensland National Party. Kerry Packer once said: 'You only get one Alan Bond.' Mr Adani knows he is going to get one Matt Canavan.

Compare the investment mandates: the CEFC must operate with a portfolio benchmark return of the five-year Australian government bond rate plus three or four per cent per annum over the medium to the long term. The NAIF does not have a requirement for a positive return. The board only needs to believe that the government can be repaid or the investment can be refinanced. That is incredibly risky.

There is one significant difference between the NAIF and other large government corporations like the CEFC, Efic, ARTC and NBN that handle billions of dollars of taxpayers' funds, and that difference is this: there is no formal or statutory role for the finance minister with the NAIF—a body which controls $5 billion—and no finance minister whose job it is to look after the taxpayer. The role of a finance minister and his department is to protect taxpayers' money, to ensure its allocation and spending are properly and effectively controlled, and to ensure that these processes are not corrupted by individuals or corporations.

Even former Prime Minister Abbott wouldn’t have Deputy Prime Minister Barnaby Joyce as Finance Minister but when Prime Minister Turnbull had to pay the Deputy Prime Minister’s $5 billion ransom, he’s keeping the actual Finance Minister away from the whole process [PLEASE NOTE: this paragraph has been amended to remove interaction with the Speaker – see Hansard for exact wording].

It is unprecedented for an individual minister to oversee the board of a government corporation without the Minister for Finance. It is unprecedented to set the investment mandate, which is a non-disallowable instrument, meaning the parliament cannot review it. It is even more disturbing if the minister's extraordinary and inappropriate powers over the board and the CEO are used. The absence of the finance minister undermines claims that the board has behaved appropriately in the face of very significant risk. Minister Canavan and Deputy Prime Minister Barnaby Joyce insist that NAIF is an independent body that will make its own decisions, but since December they have been running around my state of Queensland and around the country taking every opportunity to promote a $1 billion subsidised loan from this supposedly independent body for their favourite project. If the NAIF was really independent it would push back against this political interference. Contrast with the CEFC, which this government has tried to shut down because the CEFC has pushed back. Improving the structure of the NAIF is urgent to stop this National Party boondoggle.

 

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