2.1
This chapter outlines the evidence received in relation to the Northern Australia Infrastructure Facility (NAIF). This includes the broad support for the NAIF offered by witnesses and submitters, and the evidence which suggests that there are some areas for improvement in both NAIF processes and procedures, and the investment mandate governing the NAIF.
Support for the NAIF
2.2
Witnesses and submitters offered broad support for the NAIF, describing it as a 'useful and timely vehicle for projects to access affordable debt in order to fund infrastructure development' and as playing 'an important and valuable role in infrastructure investment in Northern Australia'.
2.3
Djarindjin Aboriginal Corporation stated that it welcomed the creation of the NAIF, and the opportunity it provides to access debt in order to fund infrastructure development, which in turn supports the community.
2.4
While NAIF was established on 1 July 2016, its first investment decision was not made until 29 September 2017 and the first drawdown of funds did not occur until 14 June 2018. To this end, witnesses acknowledged that though the NAIF may have faced early challenges a number of projects have now been successfully funded.
2.5
Gamarard, an Aboriginal owned company located in Cairns engaged in developing an irrigated agriculture and bioprocessing project, submitted that:
Much of what NAIF can do for project proponents is not only financial but assist to develop business cases to attract private investment and also sends confidence to the business and investment community that Government is supporting of development in northern Australia.
2.6
Gamarard concluded that the NAIF is 'critical to projects that may be unlikely to receive private investment' and NAIF funding allows a project to 'access private investment for certain types of infrastructure within the project development'.
2.7
The Association of Mining and Exploration Companies noted the investment decisions made by the NAIF to date, and stated that 'the potential public benefit generated by these project investments will be enormous as they should generate additional direct and indirect jobs through the supply chain'.
2.8
Submitters also highlighted the positive impact that 'the prospect of capital from the NAIF' can have on the future of an infrastructure development project. For example, CopperString stated that 'the flexibility and magnitude of the NAIF capital pool improves the prospect of any qualifying infrastructure investment in Northern Australia'.
2.9
Evidence was provided in relation to the professionalism and competence of NAIF staff in supporting proponents to navigate the application process. For example, CopperString stated that it could 'attest to the professionalism and competence of the team at NAIF being to a very high standard'. Similarly, Djarindjin Aboriginal Corporation submitted that 'the NAIF team have been supportive of our goals and provided useful advice along the way'.
2.10
Support was offered regarding the changes made to the NAIF's investment mandate in 2018. The Greater Whitsunday Alliance stated that the changes to the Mandate 'have certainly widened the opportunity for proponents in the region to make a successful application'.
2.11
Ms Claire George, Director, Industry Development, Northern Territory Department of Trade, Business and Innovation, was optimistic that as a result of the changes to the investment mandate that the NAIF will continue to its original objectives. Ms George stated:
Certainly the intention of the NAIF support is to crowd in private sector investment. We are seeing this being achieved more in recent times with the modification of the NAIF's framework and the revision of the NAIF's investment mandate. We are certainly seeing the potential for the NAIF to continue to achieve the outcomes that it was set up to achieve. We are optimistic in relation to its potential to deliver those sorts of outcomes in terms of providing that early support for project financing and having that then attract private sector investment to achieve those projects having financial close.
Criticism of the NAIF
2.12
The committee received evidence outlining areas for improvement in application processes, the investment mandate, and the types of projects which are supported by the NAIF. This evidence is explored below.
Complexity of application and administration
2.13
The committee received evidence that the application process required to access funding from the NAIF is complex, and that the administrative burden on applicants is considerable. For example, Mr Ry Collins, Project Coordinator, Economic Development, Whitsunday Regional Council, told the committee that the key barrier to accessing the NAIF is the administrative process. Mr Collins stated that in the Whitsunday area 'there is…a deficit within the region as far as capability and what local business feels is there to support them to get projects off the ground'. Mr Collins stated:
…due to the make-up of the business in the region and the dominance of SME [small-medium-enterprise] businesses, we believe that the current administrative processes to access the NAIF are too onerous for proponents with an interest in a local project.
2.14
The Greater Whitsunday Alliance similarly submitted that the Mackay-Isaac-Whitsunday Region (MIW) is:
…dominated by SME business enterprises which in the main seek a level of grant or investment loan support that ranges from $500k - $4M at any one time. Simply the degree of loan application information, and reporting required by NAIF for a project valued between $500K and $4M is not supported by many potential proponents. This leads to a perception of lots of "Red Tape" regarding NAIF operations.
2.15
The Greater Whitsunday Alliance suggested that the NAIF could explore a varied level of reporting that is commensurate with the level of lending volume and risk.
2.16
Business Foundations, a not-for-profit business advisory organisation observed that projects funded by the NAIF in Western Australia 'are predominantly projects championed by experienced businesspeople, mostly living in the south'. Business Foundations highlighted that these applicants 'appear to have experience in raising capital funding, possess strong business knowledge and are more likely to be able to navigate NAIF's complex funding process more easily'.
2.17
Business Foundations submitted that 'it is expensive to get all of the research and documents required to get funding'. It noted that this creates a significant barrier for organisations such as Aboriginal Corporations where the revenue they raise is required to support an entire community. Business Foundations suggested that:
Providing plain English support and on-ground advisers to work with the Board and Executive for projects that will be directly owned by Aboriginal Corporations would provide extra capacity to explore these opportunities. It would also allow for more equitable access to potential funding options.
2.18
This concern was echoed by the Far North Queensland Regional Organisation of Councils (FNQROC) which noted that investment decisions through the NAIF require an 'evidence base including strategic assessments and preliminary/detailed business cases'. The FNQROC stated that the:
…cost of this initial planning work is significant and for large scale projects can run into the millions of dollars. The cost of this work can be an inhibitor in itself in seeing potential projects progressed, particularly where stakeholders (such as local councils) may not have the financial capacity to fund such work.
2.19
Similarly, Regional Development Australia Fitzroy and Central West (RDAFCW) submitted that it has observed a number of funding applicants stalling at the business case stage, citing business case production expense as a barrier to proceeding. Gulf Ports stated that:
Proposals remains stymied and unrealised due to the excessive burden at which a small innovative company has to endure to access the right people and the eventual assistance of the North Australia Infrastructure Fund.
2.20
The Torres Cape Indigenous Council Alliance (TCICA), a membership-based alliance of local governing authorities from the Torres Strait, Cape York and Gulf region of Far North Queensland, submitted:
A real gap inhibiting infrastructure investment is the lack of funding available for feasibility studies and business cases, particularly for projects in remote regions, and the significant costs associated with regulatory compliance.
2.21
The committee received evidence that more assistance should be provided to proponents in the early stages of the project development phase. For example, the FNQROC suggested that 'specific grant funding programs should be made available to support strategic analysis and business case development'. Similarly, Mr Collins, Whitsunday Regional Council, told the committee that:
…significant challenge exists in the project development cycle in order to have projects with shovel-ready status, and a greater emphasis on assistance is required in the feasibility and business case phase of early-stage project development.
2.22
Mr Collins concluded that 'ideally, we would like to see an improvement in access to NAIF to enable to projects to access it for seed funding and grant funding in those early stages'. Similarly, Gulf Ports submitted:
It is imperative that the NAIF make funding directly available to local proponents for grants to enable the conduct of business cases, feasibility studies, environmental impact studies and cost/benefit analyses.
These grants can be approved to the proponent to undertake each study sequentially and if at any stage the proposal becomes inviable then further funding should cease.
2.23
The RDAFCW suggested that 'funding and training options to better support proponents in preparing planning documentation could [also] be explored'.
2.24
Submitters also highlighted that industry has not or is not utilising the NAIF for a variety of reasons including: that a long lead time is required for projects to get to a stage required to commence a NAIF application; and that protracted state government approval processes are required for projects 'significant enough to warrant' funding from the NAIF. These approval processes include vegetation management, water and energy security and transport capacity.
2.25
Business Foundations submitted:
…the administration of the Australian Government loan through a State Government department increases the level of complexity, creates another layer of required departmental and political support and allows for competing ideas about the validity of a project.
2.26
Mr Wade, Chief Executive Officer, NAIF told the committee that the NAIF has been working to ensure that its engagement with state and territory jurisdictions is efficient. Mr Wade told the committee:
The other thing is that, as you'd be aware, in terms of our funding process, post the investment decision, we work with each of the states and jurisdictions. That took a while, in terms of each party working out the best and most efficient way to work together. It always takes time to do your first transaction in a jurisdiction. We're now getting up to a number of transactions and we're developing really good arrangements with the state jurisdictions, which is good.
2.27
Mr Wade highlighted that the NAIF recently undertook a 'COVID-19 related transaction' linked to the Kalium Lakes project, which three weeks from 'identification of the issue to documentation to approval'. Mr Wade stated that:
We are getting quicker and we're very focused on continuing to be more efficient in terms of our investment processes. We know it's really important, and it also gives confidence to the parties we're dealing with.
Accessibility
2.28
Submitters raised concern that for a range of reasons, funding by the NAIF is not accessible. These reasons include: proponents having a lack of liquid equity capital; projects being unable to achieve full direct cost recovery from users; and the use of categories to describe infrastructure which fail to recognise its value to a range of sectors. The committee also received evidence that processes outlined in the NAIF Act and the investment mandate, operate as mechanisms to exclude Indigenous interests from accessing the NAIF.
2.29
The Indigenous Reference Group to the Ministerial Forum on Northern Development (IRG) highlighted that:
The structural requirements for NAIF eligible projects to deliver significant benefit to Northern Australia, demonstrate a public benefit aspect at some stage in the project's life, to be financed by a debt instrument the terms of which must cover the administration of the NAIF and Commonwealth's cost of borrowing and which must be capable of being repaid or refinanced means that the NAIF program is irrelevant to the vast majority of the Northern Australian Indigenous economy.
2.30
The IRG explained that Indigenous entrepreneurs typically have limited personal wealth to offer as collateral for loans and limited credit history, as a result of generally lower socioeconomic status. Further, most Indigenous businesses operating in Northern Australia are at an earlier stage of development, demonstrate limited trading history and uncertain future cash-flows. As a result, these businesses have a 'risk profile that is not aligned to debt financing'. Further, the IRG submitted:
…infrastructure required to support Indigenous enterprise is often incremental in nature and unable to compete with the larger infrastructure projects that are more economic for the NAIF and more aligned with the criteria of its investment mandate.
2.31
Similarly, Business Foundations noted that many Aboriginal communities do not have ready access to liquid equity capital which in turn hampers self-driven economic development. It also noted that 'there is limited appetite to give away any ownership stake in, what is often their only significant asset, land tenure and land access'. Business Foundations suggested that access to funding could be made more equitable if grant options were 'bundled' with NAIF debt funding, 'especially where the proponents are unlikely to have access to equity capital easily, but their project has nation building potential'.
2.32
Mr Michael Dillon, submitted that if the Australian Government was 'truly committed to Closing the Gap' and working in partnership with Indigenous interests, then:
…a key policy objective must be to ensure the extraordinary infrastructure needs of remote communities are able to access the financial resources made available through the NAIF. This would require change to the investment mandate and perhaps to the NAIF legislation, but is technically feasible with some innovative policy development and the requisite political commitment.
2.33
The FNQROC highlighted that in Northern Australia, infrastructure such as roads and water infrastructure are critical economic enablers. However, 'in the vast majority of circumstances, this infrastructure is not privately operated and the cost is unable to be fully recovered from users meaning funding project capital costs through loan funding is not appropriate'. As such, the FNQROC suggested that 'an element of grant funding be facilitated via NAIF to support investment in economic enabling infrastructure where full direct cost recovery from users is not a viable alternative'.
Aboriginal and Torres Strait Islander investment
2.34
In examining the perceived gap in the types of projects receiving support from the NAIF, some submitters highlighted that there have been few funds have been allocated to Aboriginal and Torres Strait Islander recipients.
2.35
Indigenous Business Australia (IBA) noted the 'significant capital available under the NAIF' and suggested that there is an opportunity for 'meaningful Indigenous procurement and employment outcomes'. The IBA further recommended that the NAIF 'consider allocating a proportion of the lending facility to Aboriginal and Torres Strait Islander infrastructure projects'.
2.36
2.36The IRG suggested that a program of grants and mechanisms designed to lower equity investment hurdles for Indigenous proponents would create a future pipeline of transactions for the NAIF. It submitted:
…infrastructure required to support Indigenous enterprise is often incremental in nature and unable to compete with the larger infrastructure projects that are more economic for the NAIF and more aligned with the criteria of its investment mandate. The market failure for these ventures and projects can only be addressed by programs that revolve around grants (including matching grants and repayable grants) and mechanisms designed to lower equity investment hurdles rates such as those that allow investors to leverage their equity against public resources, as well as tax concessions.
Types of projects supported
2.37
Some witnesses highlighted a perceived gap in the types of projects which receive funding from the NAIF. For example, the Wet Tropics Management Authority (WTMA) submitted that:
[in] a nature based economy, there are significant opportunities for regional jobs in tourism and tourism support businesses, but also in an emerging 'conservation economy', including, for example, in environmentally sensitive planning, architecture and design, landscape restoration and resilience, fire and pest management, threatened species recovery, and research, innovation and discovery. However, the…NAIF does not currently facilitate these types of activities.
2.38
The WTMA explained that although the White Paper recognises the importance of tourism in Northern Australia, the 'NAIF is set up in a way so that the type of investment that will grow tourism is not supported'. It stated that, for example:
…iconic projects that attract and grow visitor numbers to a region may take considerable time to turn a profit whilst generating wealth for the region through increased visitor nights and overall tourism spend.
2.39
The WTMA concluded that 'with a refreshed view on tourism investment, the NAIF could be well placed to facilitate these projects, with strong economic and social benefit'.
2.40
The Northern Regional Development Australia Alliance (the Alliance) also raised concerns regarding the types of projects funded by the NAIF. It stated that there is a focus on 'shovel ready' initiatives, and that this 'sits at odds with the greenfield nature of many development opportunities in Northern Australia'. The Alliance concluded that 'there is still much more to be learned about supporting economic growth in the context of undeveloped, isolated and culturally complex regions'.
2.41
A number of submitters and witnesses highlighted that in Northern Australia, there are a range of smaller projects which may also benefit from NAIF funding, but that to date there has been a focus on larger infrastructure projects. Professor Simon Maddocks, Vice-Chancellor and President, Charles Darwin University, explained that the Charles Darwin University City Deal project has required a significant amount of work to apply for NAIF funding. Professor Maddocks stated:
The challenge we've had with that process—with all respect to NAIF, and they've been wonderfully supportive—is that the NAIF statutory structure was set up, I think, to deliver big-ticket infrastructure items for northern Australia, billion-dollar-type activity. We're talking about $150 million. The amount of work that has gone on over the last 18 months to get us into a facility to get access to that has been enormous. We've been stretched to have the resources to meet the requirements to commit to that.
2.42
The TCICA similarly submitted that the NAIF:
…has not been effective in securing private sector investment in Northern Australia, despite the widening of its investment mandate to incorporate social infrastructure, the relatively broad risk appetite of the NAIF, its concessional loan terms and its ongoing efforts to engage with potential proponents. As a proponent-led organisation, this likely reflects the lack of viable, large-scale, private sector projects planned for the north. Metro Mining's $47.5 million NAIF loan facility is the only known project NAIF has agreed to finance in Cape York, the Torres Strait and Gulf region.
2.43
Mr Chris Wade, NAIF, in responding to questioning regarding the funding of smaller projects noted that there are 'a number of projects in the one-to-five-million-dollar range, particularly in Northern Queensland' which the NAIF are currently finding difficult to service.
2.44
Mr Wade explained that smaller projects are challenging for the NAIF for a number of reasons. In particular, the amount of resourcing required to progress a smaller project is often the same as for a larger project. As such, the NAIF has a discrete investment team, and is required to manage the allocation of such resources across all projects, both large and small.
2.45
Mr Wade also noted that the NAIF has found that for smaller projects there are often transaction costs that can reduce the benefits that would be obtained by receiving a NAIF loan. These transaction costs can include legal costs, and fees paid to consultants to conduct work where proponent in-house expertise does not exist. This was echoed by Ms Sam Reinhardt, Head of Division, Northern Australia and Major Projects Division, Department of Industry, Science, Energy and Resources (DISER) who stated:
We got differing views around what might be the barriers for some of the smaller scale investors. In some cases, building capacity around applications might be quite useful. In other cases, to be frank, it's not always about having loans available. A loan, in and of itself, obviously requires repayment, which requires an income stream that can be shown to have potential in the future. That's not always the case. In some cases, it might be that NAIF is really not the answer and NAIF loan products are not what these businesses need. There are quite different perspectives, depending on whom we were talking to.
2.46
Mr Wade, NAIF, told the committee that for some projects 'debt is not the answer'. Mr Wade explained that such projects may need 'advice, a grant or equity capital'. Mr Wade stated:
We see that in a number of small greenfield tourism opportunities, for example. They might be putting in a new attraction or something like that. There's a whole lot of volume and patronage risk. Traditionally, equity is better placed at the early stage, just to take that risk. Once the business matures or gets to do the next expansion, then debt financing is a better answer for them.
2.47
Ms Reinhardt, DISER, also assured the committee that the department is not 'aware that NAIF is knocking back smaller scale projects' but acknowledged that the NAIF 'was originally envisaged for large-scale…"transformative infrastructure investments"'.
2.48
However, Ms Reinhardt noted that the ongoing review of the NAIF is considering the appropriateness of the investment mandate and eligibility criteria. Ms Reinhardt explained that that feedback received during this process has indicated that the NAIF 'plays a critical role in mid-size investments' too. Ms Reinhardt stated:
What we might think of transformative investments in a southern Australia sense or in the densely populated areas are often smaller scale investments that would really make a difference in northern Australia. We're well aware of that issue...I'm not sure that it's fair to say that projects are being knocked back, but there's certainly an appetite to look more broadly and make sure that NAIF is able to do as much as possible in the small- to medium-size projects as well.
2.49
The Red Meat Advisory Council also raised concern regarding the lack of uptake of NAIF concessional loans. It suggested that the 'NAIF could benefit greatly from undertaking an opportunity mapping study to assess existing, smaller projects that may benefit from a grant style project'.
2.50
It was also argued that despite the improvements seen as a result of the expansion of the investment mandate in 2018, more could be done to support regional communities and the prospective employees of significant projects. For example, the Australian Manufacturing Workers' Union Queensland and Northern Territory (AMWUQNT) submitted that:
…the manufacturing industry relies on extensive supply chains that have a multiplier effect on regional jobs. In order to deliver the government's broader Northern Australia agenda, priority should be given to projects that will expand local supply chains and deliver long-term, secure and skilled jobs as this is in the best interests of Northern Australian communities and their developing economies.
2.51
Similarly, the Regional Implementation Committee, a Pilbara based forum established in 2016 comprised of eight Pilbara Traditional Owner groups and Rio Tinto, noted that many of the road building contracts for NAIF funded projects have been allocated to companies outside the region. It suggested that:
There could be a greater emphasis on using local (Indigenous, wherever possible) contractors to build up capability and transferable skills in the region. This also means the money is more likely to stay in the region and be spent in associated businesses.
2.52
Submitters also suggested a range of other projects which could be supported by the NAIF. For example, Suncorp suggested that investment in protecting communities against natural disasters such as floods and cyclones aligns with the existing objectives of the NAIF. It submitted that:
Such measures should be seen as economic infrastructure which helps to ensure that regional communities, as well as their economies, are better protected against the impacts of natural disasters.
2.53
Suncorp argued that such activities could occur at a community level (i.e. the construction of flood levees), as well as encouraging individuals to strengthen their homes (i.e. against cyclones). It highlighted that from an 'insurance perspective, these activities will reduce risk and, in turn, insurers in the region should recognise this through lower premiums'. Suncorp explained:
These outcomes are in line with the NAIF's purpose of generating public benefit, facilitating long term economic and population growth, and ensuring greater private sector participation in investment.
2.54
The peak body representing Queensland beef, sheep and wool, and grain producers, Agforce made a submission calling for investment in a range of project types including: rail, telecommunications, and water infrastructure.
Impact of COVID-19
2.55
The COVID-19 pandemic has had a significant impact on communities and industries across Northern Australia. It has also significantly altered the focus of the work of the Australian Government in implementing its Northern Australia agenda.
2.56
DISER highlighted that the economic impact of COVID-19 in Northern Australia has had varying depths of impact across sectors and localities. In particular, the absence of tourists and travelling workers and the disruption to supply chains has resulted in extremely challenging business conditions. DISER submitted that:
COVID-19 exacerbated the underlying structural issues in northern Australia's economy – a narrow industry base, export dependency, transient workforce, long and inefficient supply chains, and strongly seasonal cycles.
2.57
Ms Sam Reinhardt, DISER explained to the committee that:
…the tourism sector in northern Australia has been hit hard. The northern climate limits the vast majority of tourism to between April and October, and the timing of border closures has meant that many businesses are facing the very real prospect of limited or no income until April 2021 at the earliest. Agricultural producers are concerned they won't be able to fill their seasonal labour needs if domestic and international border restrictions remain in place. The resources sector has been resilient to date, but ongoing exploration and investment activity is essential for long-term growth.
2.58
Similarly, Ms Linda Lee, DISER, explained that Tropical North Queensland receives up to 90 per cent of its annual income through the seasonal tourism window. Central Australia similarly receives up to 98 per cent of income for the year through seasonal tourism. Ms Lee stated:
We also understand that tourism is impacted through the absence of the international travel. We understand that international travellers are likely to spend more in northern Australia than what they would in southern Australia. The other impact we see is that border closure and movement restrictions have also limited domestic tourists. The absence of regular flights or competitive air fares has really limited people that need to use air transport to get to very remote places. We're also aware that the agriculture industry has been hit through these types of disruptions to the supply chain, particularly the absence of working holiday makers and Seasonal Worker Program people that normally are here to support the ag industry.
2.59
Between June 2019 and June 2020 there was a fall in the number of domestic overnight trips to destinations in Northern Australia of 1.8 million or 13.6 per cent. Falls were much larger in some regions with overnight trips to Litchfield/Kakadu/Arnhem falling by 40.3 per cent, overnight trips to Townsville falling by 31.4 per cent, and overnight trips to Lasseter (which includes Uluru, Yulara and Kings Canyon) falling by 27 per cent. North Queensland and Outback Queensland suffered particularly with all regions reporting falls in domestic overnight trips.
2.60
Australia’s North West, Katherine Daly, and Alice Springs bucked the trend with increases in overnight trips.
2.61
Northern Australia also saw a fall in international visitors with the number of international travellers visiting major tourism attractions falling by 27.2 per cent in the 12 months from June 2019 to June 2020. Destinations that experienced the biggest falls in percentage terms include Mackay (down 39.7 per cent), Tropical North Queensland (down 33.1 per cent), Townsville and Whitsundays (both down 27.7 per cent), Lasseter (down 27.4 per cent) North West WA (down 27 per cent), and Capricorn in Queensland (down 24.3 per cent).
2.62
Spending by international tourists in Northern Australia fell by just under half a billion dollars or 26.2 per cent in the 12 months to June 2020 compared with the previous 12 months. The biggest falls in spending were recorded in Lasseter (down 36.2 per cent), Whitsundays (down 34.0 per cent) and Tropical North Queensland (down 32.2 per cent).
2.63
The impact of COVID-19 has also been seen in the number of seasonal workers in Northern Australia. This includes working holiday-makers, and those employed under the Seasonal Worker Program and Pacific Labour Scheme. Evidence provided to the Joint Standing Committee on Migration in July 2020 indicated that across Queensland’s agricultural sector there has been a 30 per cent decline in ‘normal numbers’ for working holiday-makers, and a decline of between two and eight per cent in working holiday-makers in the north of the state.
2.64
Like universities across the country, those headquartered in Northern Australia have also suffered financial loss as a result of COVID-19. As at September 2020:
Charles Darwin University announced a $20–$30 million financial impact from 2020, with 100 positions lost;
James Cook University announced a $30–$40 million financial impact, with a minimum of 70 positions lost; and
CQ University announced a $116 million financial impact in 2020, with 197 voluntary redundancies and a further 100 projected.
2.65
Although the above financial impacts are largely due to lost overseas student fees, universities also experienced other losses related to COVID-19, such as investment losses. University expenditure has also increased in some areas due to COVID-19. Each of the universities mentioned above has provided additional support for students experiencing hardship due to the pandemic, for example, investment in additional academic support to manage transitions to online study, food relief, and direct financial assistance with living costs.
2.66
Mr Wade, NAIF, observed that 'various pockets of Northern Australia have been more hit than other parts of Australia'. As such, projects in Northern Australia which have been engaged with the NAIF are facing a range of challenges. Mr Wade told the committee that the NAIF is working with proponents to restructure arrangements. Mr Wade stated:
We're a patient lender, from our perspective. I suppose we face this situation across our whole portfolio. If I look at each of those financings that we've been drawing down, they've all faced different challenges during the COVID-19 phase, which has led to us having to restructure a number of the arrangements to support them during this phase.
2.67
Mr Wade, NAIF, explained that the NAIF's focus during COVID-19 has been in two areas. First, in relation to existing borrowers and proponents there has been a focus on restructuring, providing assistance with NAIF financing, and working with other financiers to find solutions such as short-term funding. Second, in relation to new proponents the NAIF has focused on supporting projects to progress through investment decisions, contractual close and to reach draw down. Mr Wade stated that during the COVID-19 pandemic, the NAIF has been able to reach close on a series of transactions across a range of sectors and regions.
2.68
It was also noted that COVID-19 has necessitated a shift in focus for the Office of Northern Australia (ONA). As a result, the release of the review of the NAIF has been delayed. Ms Sam Reinhardt, DISER, noted:
…the profound economic impacts being felt across northern Australia as a result of COVID-19. In response, the ONA team have shifted their focus to working on resilience and recovery for northern Australia.
2.69
It was noted that the Australian Government is focused on delivering recovery measures to manage both the health and economic impacts of the pandemic. Nationwide programs delivering support to Northern Australia include extending the JobKeeper program, which supports businesses and not-for-profits significantly impacted by COVID-19 to help with the wages of employees. Ms Reinhardt, DISER, explained that:
…Cairns, for example, is reporting the fifth-highest proportion of businesses across the nation drawing on JobKeeper to keep their employees on the books—and providing top-up income support payments in a period in which many more people are reliant on these payments.
2.70
Similarly, Ms Linda Lee, General Manager, DISER, explained that nearly 32,000 businesses in Northern Australia have benefited through the JobKeeper Program, and more than 100,000 individuals have benefited through the JobSeeker Program.