The man in charge of the facility that was designed to turn northern Australia into an economic powerhouse has committed to looking at the recommendations of a Senate committee examining the $5bn fund – but said he believed it was largely “working well”.

The Labor and Greens-heavy committee looking at the Northern Australia Infrastructure Facility concluded its oversight was “severely inadequate” and recommended the finance minister take joint responsibility for administering any approved funds.

It also pushed for increased transparency, in an attempt to flush out any potential conflicts of interests over the investment decisions, after concerns were raised over Naif board members’ links to the mining industry.

But the minister in charge, Matt Canavan, told Guardian Australia he believed the fund, following some tweaks earlier this year over the timeliness of project approvals, was working as it should.

“I will obviously consider the Senate inquiry’s recommendations, however the Naif act was passed by Labor and the LNP in a bipartisan way, with the government arrangements which are in place,” he said. “I do think they are working well – it would be pretty hard to accuse the Naif of not engaging in due diligence through their process – they have been incredibly diligent.



“And, under the Naif act, I can’t direct the Naif to do anything – all the power the minister has is to reject proposals which are inconsistent with government policy or the national interest and, even in that case, I have to make a public report to be tabled to the parliament explaining my reasons for it.

“I think their independence is enshrined in the act. That was something which was looked at closely when the Naif act passed only a couple of years ago and we have a review of the Naif coming later this year – and obviously all of those things will be looked at.”

Labor’s shadow minister, Jason Clare, criticised the fund, which he said had so far only “delivered $3m out of the $5b fund – or 0.068%”.

“In the Naif’s 2017-18 corporate report, it promised to invest between $300m and $1bn by June 30 this year,” he said. “But, as of last weekend, it had only delivered $3m.”

Canavan said that was an unfair criticism.

“More than $130m has now been allocated of course, payments will only be made on milestones, according to the project’s timetable,” he said.

“The money doesn’t go all out straight away, that would be a waste of the commonwealth’s money. But we are seeing increased activity. I have publicly said the government was not happy with the speed of the process in its first year-and-a-half and that is why we commissioned a review and made some changes to try and accelerate that, early this year, I think that is bearing fruit and that is positive for northern Australia.”

The fund, which had received bipartisan support when it was first floated as an idea by the Abbott government, has been a bone of contention between Labor and the government since coming to fruition, which was amplified last year when the Queensland Labor government withdrew its support for a $1bn concessional loan.

The mining giant Adani had applied to the Naif for the loan to build a rail line from the Galilee Basin to the Abbot Point port, a piece of infrastructure critical to the area being opened up to active mining operations.

But after learning of an alleged plan to accuse her of a conflict of interest, after it was discovered her partner had been working with the consultancy firm helping to put together Adani’s Naif proposal, the Queensland premier, Annastacia Palaszczuk, announced her government would veto any Naif loan, ending Adani’s chances.

The move proved to be politically popular, with even Pauline Hanson agreeing no public funds should be spent on the infrastructure, unless the government retained ownership.

Canavan said infrastructure allowable under the fund was broad – and included tourism, another of the committee’s recommendations – but building the resources sector was also one of its aims.

“There is a very large tourism project on the cards, which I can’t reveal publicly, but hopefully it will get across the line very soon, he said.

“The definition of infrastructure is very broad – just this past week, we received funding for a project to upgrade the James Cook University. So education infrastructure, health infrastructure are certainly allowed under the act – as is your more traditional hard infrastructure like roads, and railways and ports, and guess what, some of that infrastructure is used by the mining sector, which contributes more than half of northern Australia’s economic output.”

Coalition senators who sat on the committee provided a dissenting report to the inquiry, labelling the inquiry a “politically motivated” exercise, which had aimed to undermine Canavan.

