10 May 2023
Ms STEGGALL (Warringah): I rise to speak on the Northern Australia Infrastructure Facility Amendment (Miscellaneous Measures) Bill 2023. The aim of this bill is to increase the NAIF appropriation from some $5 billion to $7 billion. The Northern Australia Infrastructure Facility, the NAIF, was established in 2016. It's a government agency with $5 billion to invest to provide the basis for economic and population growth in northern Australia. The NAIF was established with the intent to fill financing gaps in northern Australia by being more risk tolerant to uniquely northern Australian characteristics like remoteness, distance and climate, because, let's be clear, northern Australia will be on the front line of global warming impacts.
This bill will increase the NAIF's appropriation from $5 billion to $7 billion. It also amends the definition of northern Australia within the act to include Christmas Island and the Cocos (Keeling) Islands, collectively known as the Indian Ocean territories. The bill also clarifies that the objectives of the act include a provision of financial assistance for the development of northern Australian economic infrastructure for the benefit of Indigenous persons. I welcome this initiative increasing consideration of benefit to First Nations people, and I hope this will contribute towards a much-needed boost for their economic wellbeing and agency in that sense. Investment in resource extraction by government, particularly fossil fuel, remains a major concern for many Indigenous people and people across the country. In the last parliament, in fact, I met a number of community groups and First Nations representatives who came to discuss their concern about the impact on country of certain projects.
I will be proposing amendments, at the consideration-in-detail stage of this bill, to prevent this increase in public funds of $7 billion from being used to prop up and invest in further fossil fuel infrastructure. With this fund, we are not talking small amounts of taxpayer money; we're talking billions of dollars, a huge sum that will be spent, and we can't allow it to become a government-controlled slush fund. We must act to ensure taxpayer money is not used to support mature technologies. Fossil fuel industries are mature technologies. They should be able to stand up on their own without subsidy. They need to be able to make their own investment. They ultimately make record profits and pay very little tax.
At present, Australia's emission reduction target and our obligations under the Paris agreement are one factor that the board may consider when determining the execution of powers under this act and determining funding proposals under the NAIF. I strongly believe that these factors should be a 'must' consideration. They should be a threshold consideration to these projects, especially when we are talking about a region of Australia that will be on the front line of impacts. We are talking about a region that will have a terrible time when it comes to insurance, when it comes to an unprecedented scale impacts on lifestyle, so it's really important to understand that should be a 'must' consideration, not just a 'may'.
One of the key projects that has had its hand out for funding from the NAIF has been the Beetaloo basin. This should not be receiving government subsidy under this facility. The Beetaloo basin is a methane bomb, and it was incredibly disappointing in the last parliament that in fact, when the coalition government sought to fund the Beetaloo basin exploration through the NAIF, Labor sided with the coalition and voted for that to continue. We tried to stop it with a disallowance of an instrument, but, sadly, major parties continued this prop-up of mature technologies when it comes to fossil fuels.
Let's be clear about what a project like the Beetaloo basin means. It risks Australia failing to meet its Paris commitments. One conservative report projected that the basin will release some 117 million tonnes of greenhouse gases per annum, equivalent to one-fifth of Australia's total annual emissions. We must reject any move to allow further funding of fossil fuel projects, especially the Beetaloo basin, especially when there are so many other projects that genuinely will help communities in the Northern Territory. Despite all the hype and all the talk, gas is as polluting as coal. In fact, in some ways, it is worse, because methane is up to 80 times more potent at warming over the first 20 years than carbon dioxide. So if we're genuinely concerned about where we're heading and meeting the Paris Agreement of 1.5 degrees, the low-hanging fruit is addressing the early warming capacity of methane.
The other reality is that projects like the Beetaloo are actually really poor economics. Right now, we know gas companies are making record profits, and they ought to be able to invest in their own development. In fact, just with the budget release and the announcement of the petroleum resource rent tax by the government, we see that the government is giving multinational gas companies the opportunity to recoup their investment on exploration and developing projects for some seven years. From when production commences, for seven years there is no requirement to pay any kind of royalty on what is extracted. So that is the period assessed as being how to recoup for that investment. And then, when the PRRT kicks in, they get to double dip. They get to again count that initial investment into infrastructure and exploration and deduct that against their cap of profits, and then their PRRT is only payable on that little bit remaining.
For me, it just cannot be that, on top of all of that very beneficial treatment—and experts have said that this is one of the most generous processes and tax treatments of gas extraction in the world—we can't also be spending public money on actually developing the infrastructure that they are going to require. Over the longer term, we know the gas industry's revenues will be eroded, because we know renewable energy is the only form of energy that has a deflationary price. And so we know that major fossil fuel companies know there is shareholder wealth, and they're having to write down billions in assets. They want to have the record profits, but they don't want to be left with stranded assets, so they would really prefer the public purse to be paying for those assets in the first place. For example, since 2014 Santos has written down over $8 billion of its assets, so we know these key core infrastructure assets are going to be stranded assets. That's why, generally, they want the public purse to pay for them.
Many gas projects have been abandoned, and R&D spending has been downsizing. Oil and gas are in a precarious position, caught between a confluence of forces. It's in structural decline. The industry knows this, and the market knows this. That's why they've got their hands out for subsidies from sympathetic governments. The answer should be an unequivocal no.
A recent Grattan Institute report, Flame out: the future of natural gas, said that the only rational approach for governments, the energy industry and its customers is to begin planning for a future without natural gas or, at least, with a substantially reduced role for natural gas. Instead of redirecting funding to fossil fuel projects, the NAIF should be promoting a clean technology vision for northern Australia. Northern Australia has enormous potential to supply the world with energy harnessed from remarkable wind and solar resources. The Sun Cable project and the Asian Renewable Energy Hub are just two examples of what is possible.
The amendments that I will propose will ensure that the NAIF funding is directed only towards worthy projects, not fossil fuel projects. The NAIF should remain independent. It should invest only in clean technologies that are actually for the future of northern Australia. Anything else would be irresponsible and would be public money wasted. At a time where there is so much need within communities, that kind of prioritising must occur. I commend the government for the bill, the support of the Northern Territory and the funding, but let's get real and make sure that that funding goes to where it should.
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