It is clear that the infrastructure needs of the Asia-Pacific cannot be met on current expenditure projections and that developed countries like Australia must do their bit to contribute to the sustainable infrastructure needs of developing countries. Some $26 trillion in infrastructure investment is needed over the next decade. Specifically, the Pacific will require the highest relative level of investment in infrastructure, both in per capita terms and also as a percentage of GDP as identified by the Asian Development Bank.
Both the Opposition and the Government have identified infrastructure in the Pacific as a national priority and this Committee has been tasked with examining the legislation to implement the Prime Minister’s announcement in November last year. As a matter of bi-partisanship the Opposition and the Government both agreed to this inquiry. This has been a useful exercise allowing for community consultation as well as the examination of any unintended consequences of the organisational structure the Government has chosen to pursue.
While many of the public submissions were generally supportive of the Government’s initiative there were some submissions which were critical of the Government’s proposal and a few which outright opposed it. While Labor Senators do not agree that this legislation should be opposed outright, Labor Senators do agree that there are some elements of this Bill which may have some unintended consequences. Many of these issues should be addressed in the Minister’s Statement of Expectations to EFIC which will need to be updated as a result of the passage of this legislation – something which this Committee could not consider as it is yet to be made public.
Labor Senators have recommended that a statutory review of the changes this Bill implements should be conducted 18 months after its assent. This is important for two reasons. Firstly it will ensure that the aims of the Australian Government are being met. Secondly it will ensure that the infrastructure needs of our Pacific neighbours are being met.
Recommendation
Labor Senators recommend that a statutory review of the changes this Bill implements should be conducted 18 months after its assent.
A month before the Prime Minister’s announcement the Leader of the Opposition announced that a Shorten Labor Government would establish a government-backed infrastructure financing facility. He said:
My vision is for Australia to actively facilitate concessional loans and financing for investment for vital, nation-building projects through a government-backed infrastructure investment bank.
Our neighbours in the Pacific are looking for partners to help them build infrastructure and as Prime Minister, I intend to make sure they look to Australia first.
I see this financing facility as a way Australia can elevate our status as a 'partner-of-choice' for Pacific development and enhance security and prosperity in the region.
This month, Senator Wong has said about Labor’s announcement and the Government’s proposal:
I know there are some concerns in the sector about the model outlined by the Government.
A Labor Government will work with the aid and development sector to ensure the implementation of a model that is fit for purpose and contributes effectively to our development goals in line with our values and national interest.
While this work continues, we would seek to utilise the mechanisms established by the current Government as a starting point.
Beyond funding, Labor’s support for infrastructure would also offer:
Job opportunities and training.
Support for governance and project management.
Technical assistance to help achieve appropriate design and financing arrangements, including for climate resilience.
While much of the infrastructure financing will be focused on the Pacific, under a Shorten Labor Government there will be opportunities to finance and assist with infrastructure in Southeast Asia too.
As a disaster prone region, we can support climate-resilient infrastructure and systems.
Labor will help our neighbours ensure their infrastructure is sustainable and resilient.
It is clear that while both the Government and the Opposition are well intentioned, as are those who made submissions to this inquiry, there is a variety of opinions on the best way forward. This is not a unique situation to Australia, as many developed countries have pursued similar but uniquely different models themselves. It is therefore appropriate to support the Government’s proposed model at this time, with a statutory review in 18 months which will ensure proper implementation of this new initiative and deliver the best outcomes for our regional neighbours.
Senator Alex Gallacher
Deputy Chair