Criticised $5bn fund receives overhaul
A $5bn infrastructure fund criticised for failing to get money out the door will be overhauled to take on more and riskier projects.
Sweeping changes to the Northern Australia Infrastructure Facility to be unveiled today following a statutory review that found the fund needed to do more to get money to projects.
Northern Australia Minister Keith Pitt said the changes would streamline loan approvals so more projects could get off the ground and create jobs that would aid economic recovery from the COVID recession.
"The reforms to NAIF will ensure the $5 billion facility will have more flexibility to
bankroll investment in a wider range of projects across Northern Australia," Mr Pitt said.
He said the government had listened to feedback and would make changes to "empower the NAIF with more flexibility to help drive economic recovery and population growth".
The changes follow mounting criticism from Opposition Northern Australia spokesman Murray Watt over the slow trickle of funds released in the first four years of the fund's operation.
Last month he claimed that at the current rate of spending it would take 150 years for all the funds to be released as less than $200m had flowed to projects with just $1.7m in Queensland.
The NAIF has committed about $2.4bn to a pipeline of 21 projects including eight in Queensland.
Under the reforms, smaller projects will be allowed to partner with local financiers to access loans.
The scope of accepted projects will also be widened and rules about what money can be used for will be loosened.
Currently funds are restricted to physical construction works but will be extended to more elements of developments such as buying or leasing equipment, training and expanding existing business operations.
The changes, to be included in legislation expected to be quickly introduced into parliament, will also free the NAIF to support riskier projects.
The Commonwealth will also be allowed to assume the majority of risk in any project and the Minister will be able to take earlier decisions not to reject a NAIF investment decision.
Assistant Northern Australia Minister Michelle Landry said the statutory review had found the NAIF was an important vehicle of investment in the north but "more can be done".
"We are determined to open up further opportunities to strengthen Northern Australia's contribution to our economy by continuing to support infrastructure and development," she said.
The NAIF was due to expire in June 2021 but its operations were recently extended to mid-2026.
Originally published as Criticised $5bn fund receives overhaul