Northern Australia Infrastructure Facility Amendment (Extension and Other Measures) Bill 2021 [2021] AUSStaCSBSD 56 (17 March 2021)

• Northern Australia Infrastructure Facility Amendment (Extension and Other Measures) Bill 2021
• Parliamentary scrutiny—section 96 grants to the state9
• Broad discretionary powers11

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Northern Australia Infrastructure Facility Amendment (Extension and Other Measures) Bill 2021

Purpose	This bill seeks to amend the Northern Australia Infrastructure Facility Act 2016 to: • extend the investment time period of the Northern Australia Infrastructure Facility by five years to 30 June 2026; • strengthen the Facility's governance; and • enhance the scope, speed and flexibility for the Facility to provide financial assistance to support the development of Northern Australia economic infrastructure
Portfolio	Resources, Water and Northern Australia
Introduced	House of Representatives on 24 February 2021

Parliamentary scrutiny—section 96 grants to the state^[9]

1.27 Item 10 of Schedule 1 to the bill seeks to amend the Northern Australia Infrastructure Facility Act 2016 (the Act) to substitute paragraph 7(1)(a) which would empower the Northern Australia Infrastructure Facility (NAIF) to provide grants of financial assistance to the states under section 96 and the territories under section 122 of the Constitution, for the development of Northern Australia economic infrastructure. This proposed change to the Act broadens the scope of NAIF's investment decisions by allowing it to invest in the 'development' of Northern Australia economic infrastructure, rather than only being permitted to invest in 'construction'.

1.28 Paragraph 7(1)(b) of the Act provides that the NAIF may determine terms and conditions for the grants of financial assistance to the states and territories.

1.29 The committee notes that section 96 of the Constitution confers on the Parliament the power to make grants to the states and to determine the terms and conditions attaching to them.^[10] Where the Parliament delegates this power to the executive, the committee considers it appropriate for the exercise of the power to be subject to at least some level of parliamentary scrutiny, particularly noting the terms of section 96 and the role of senators in representing the people of their state or territory.

1.30 In this instance, neither this bill nor the Act contains any guidance as to the terms and conditions on which financial assistance may be granted. In addition, there is no requirement to table the agreements between the NAIF and the states and territories in the Senate to ensure that senators are at least made aware of, and have an opportunity to debate, any agreements made with the states and territories.

1.31 The committee therefore requests the minister's advice as to whether the bill can be amended to:

• include at least high-level guidance as to the terms and conditions on which financial assistance may be granted; and

• include a requirement that written agreements with the states and territories about grants of financial assistance are:

• tabled in the Parliament within 15 sitting days after being made; and

• published on the internet within 30 days of being made.

Broad discretionary powers^[11]

1.32 Item 38 of Schedule 1 to the bill seeks to add a new paragraph 21(1)(d) to the Act which would empower the minister to terminate the appointment of a board member if the minister is satisfied that the collective experience and expertise of the Board are not sufficiently diverse or appropriate to enable the Board to perform its functions effectively.

1.33 The committee notes that proposed paragraph 21(1)(d) would provide the minister with a broad power to terminate the appointment of a board member. The committee expects that the inclusion of broad discretionary powers should be justified in the explanatory memorandum. In this instance, the explanatory memorandum notes that any changes to the functions or Investment Mandate of the NAIF may result in a requirement for different expertise and experience.^[12] However, the explanatory memorandum contains no further justification for the inclusion of this broad discretionary power.

1.34 The committee also notes that current sections 9 and 10 of the Act provide a broad power for the minister to give directions to the NAIF through the Investment Mandate, which is a non-disallowable legislative instrument.

1.35 The committee therefore requests the minister's advice as to:

• why it is considered necessary and appropriate to provide the minister with a broad power to terminate the appointment of a board member; and

• whether the bill can be amended to include additional guidance on the exercise of the power on the face of the primary legislation.

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[9] Item 11, Schedule 1. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv) and (v).

[10] Section 96 of the Constitution provides that: '...the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit'.

[11] Item 38, Schedule 1. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(ii).

[12] Explanatory memorandum, p. 11.