Senator STEPHENS (Parliamentary Secretary for Social Inclusion and the Voluntary Sector and Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) (12:32 PM) —I would like to thank those who have contributed to this second reading debate, and I will make some final remarks on this second reading stage of the bills. The Nation-building Funds Bill 2008 and the Nation-building Funds (Consequential Amendments) Bill 2008 give effect to the government’s 2008-09 announcement to establish the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund. To provide a mechanism to distribute grants payments from funds to states and territories, the Treasurer has also introduced the COAG Reform Fund Bill 2008 to establish the COAG Reform Fund. With these significant commitments in transport, communications, energy, water, education, research and health infrastructure, the nation-building funds will assist in addressing Australia’s immediate challenges in response to the global financial crisis as well as its longer-term challenges over the next decade and beyond. The government will contribute a total of $26.3 billion to the funds this financial year. The funds will be established as special accounts in the Consolidated Revenue Fund, meaning that amounts credited to the funds represent amounts that have been appropriated and clearly committed for future expenditure for the creation and development of infrastructure.

In view of a strong commitment to shield Australians from the global financial crisis, the government will accelerate its nation-building agenda. The legislation allows for the interim advisory board arrangements that have now commenced. Allowing expenditure in critical infrastructure to commence from 2009 will contribute to economic activity in the short term and extend growth potential in the medium to long term. The nation-building funds will utilise and build on the governance arrangements for the Future Fund. The Future Fund Board of Guardians will manage the investments of the funds. So there will be a high level of transparency and accountability associated with both the management and the payments from the funds. For example, the legislation establishes an evaluation framework that provides for rigorous assessment of projects by independent advisory bodies. Projects will need to satisfy rigorous evaluation criteria, and these criteria will be tabled in the parliament as disallowable legislative instruments. There will be a common and rigorous approach in the evaluation criteria framework across the three funds that is consistent with the nation-building objectives of the funds. In line with the government’s overarching principles, projects that are financed from the funds should address national infrastructure priorities, demonstrate high benefits and effective use of resources, efficiently address infrastructure needs and demonstrate that they have achieved established standards in implementation and management.

The government will consider which of those projects will be funded through the budget process and will include details of infrastructure payments in the budget documentation. Parliamentary transparency and scrutiny for payments from the funds will also be provided by the general drawing rights limit which will be included in the annual appropriations acts for financial years 2009-10 onwards. The drawing rights limit restricts the total amount that may be paid out in a financial year to support relevant infrastructure expenditure. This will give the parliament a mechanism by which it may oversight the rate at which amounts are being expended. The portfolio ministers will be responsible and accountable for payments and for the delivery of projects in line with their portfolio responsibilities. The legislation therefore provides for these arrangements and clear policy accountability for payments from the funds. The funds demonstrate the government’s commitment towards building the nation’s capabilities, strengthening the economy and providing critical investment in key areas of nation-building infrastructure. I commend the bills to the Senate.

Question agreed to.

Bills read a second time.