Deals worth $1bn to sell the Territory Insurance Office and to lease Darwin port ‘absurd’ and ‘weird’, Senate inquiry hears

This article is more than 4 years old

This article is more than 4 years old

The Northern Territory government has privatised two major public assets in the past year without knowing what it will spend the proceeds on, a Senate inquiry has heard.

The two deals – to sell the Territory Insurance Office and to lease Darwin port to a Chinese company for 99 years – are worth just under $1bn together and have been labelled “absurd” and “weird” by federal senators.

The inquiry heard that the NT government was attempting to access the federal asset recycling scheme, which entitles it to an extra 15% of the selling price of the asset from the federal government, provided the projects that will benefit have been identified.

However on Tuesday a Senate committee examining the review process around the Port Darwin lease heard no projects had been identified for either the Port Darwin or TIO proceeds.

Jodie Ryan, the Northern Territory under-treasurer, told the hearing the NT was still in discussions with the federal Treasury to identify local projects.

“There hasn’t been a decision one way or another,” Ryan said. “In fact the NT government hasn’t made a decision yet as to which projects it will use, or the extent to which the port sale proceeds will be used for new infrastructure or what those projects are.”

At the time of the TIO sale, the chief minister, Adam Giles, said about $215m would go towards the NT “infrastructure investment fund,” which is yet to be established, and about $250m towards community infrastructure and flood mitigation.

However the project identification process for TIO funds under the asset recycling scheme was only started after the sale had gone through, Ryan said.

The federal government website on the asset recycling scheme gives two hypothetical, eligible situations. In one, all proceeds from a state asset sale are used to fund new infrastructure, and in another 50% goes to debt repayment, however both assume the state has specific projects already in mind.

“The fact that the CLP government still haven’t figured out which projects fit into the asset recycling criteria, is absurd,” Labor senator Nova Peris, who sat on the committee, told Guardian Australia.

She said Territorians had “nothing to show” for the sale of TIO over a year ago.

Independent senator Nick Xenophon, also a committee member, described it as “weird,” and said he’d have thought a government would work out what it needed the money for before selling public assets.

“It seems at least very unusual, and just a bit weird if that’s how they govern,” he told Guardian Australia.

“If that’s their model of government then let’s hope it doesn’t spread anywhere else. This is a first in the history of governments in this country,” he said.

“I’m sure some people will be nostalgic for the days before self-government.”

A spokeswoman for NT treasurer David Tollner, who is currently overseas, confirmed NT government negotiations with the commonwealth were ongoing and in the final stages. She said proposed new economic infrastructure would be made public at the end of the process.

“The territory government is participating in this initiative and intends to reinvest part of the proceeds from the sale of TIO and the lease of the Port of Darwin, including the incentive payments received from the commonwealth under this initiative, into new economic infrastructure across the territory,” she said in a statement.

“The territory is expecting to add additional infrastructure projects over the next six months, which will also be added to the schedule and made public.”

Natasha Fyles, the NT opposition spokeswoman for infrastructure, said Giles and the CLP had shown no credible reason for the privatisation of the public assets.

“It is strange economic practice to sell public assets without outlining what the money will be spent on which means Adam Giles either doesn’t have a plan or he has a secret plan which he is not telling Territorians about,” she said in a statement.