New analysis from The Australia Institute warns the federal government is preparing to spend vast amounts of taxpayer funds on an overseas fossil fuel project to generate business for increased fossil fuel exports out of Australia.
A new bill to Parliament – the Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019 – would expand funding and powers for Efic, Australia’s export finance agency, turning it into an overseas development bank.
The bill was passed in the House of Representatives this week and stands to be passed by the Senate before the Election.
Introducing the bill, Assistant Minister for Trade, Tourism and Investment Mr Coulton hoped Efic would fund fossil fuel projects overseas “leading to increased energy exports”.
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The Minister also cited Efic’s role in funding PNG LNG, a massive fossil fuel project that has sparked social conflict.
According to new FOI documents, in 2018, Efic received requests for help from “several coal projects”, and has a long history of providing such funds.
The bill would set lending criteria allowing Efic to lend simply to benefit “a person carrying on business or other activities in Australia”.
There is no mention of the development needs and challenges of host countries, or of how Efic will make decisions about influencing foreign relations.
“In its first months in power this government dismantled Australia’s long-running and well-respected Agency for International Development, and then cut aid to record low levels, but is now beefing up its export credit agency, Efic, under the guise of development,” researcher at The Australia Institute Tom Swann said.
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“Efic is poorly placed to carry out development work, and this bill raises major financial, environmental and diplomatic risks.
“Expanded funding and powers for Efic is a major concern given its terrible track record, including funding a major LNG project in Papua New Guinea that almost sparked a civil war.
“It is seriously concerning that the Government openly admits it wants Efic to funnel taxpayer dollars to generate business for Australian fossil fuel exports, ignoring both domestic and global efforts to implement the Paris Agreement and curb emissions.
“Independent overseas development banks need strict lending criteria and strong oversight – this is all missing in the Government’s rushed legislation.
“This Government has repeatedly tried to put taxpayers’ money into coal and gas projects. It’s a dangerous obsession and it is not in Australia’s national interest.
“An overseas development bank focused on sustainable development would be helping build local institutions and funding clean energy projects using Australian technology and expertise. That appears unlikely as the legislation currently stands.”