The federal Opposition has seized on an audit that revealed the Albanese government’s flagship manufacturing fund approved investments worth almost $450 million without a formal investment strategy.
The audit, released last week, found the design of the National Reconstruction Fund Corporation (NRFC) had been “largely effective”, but uncovered fund management and governance gaps post-launch.
Issues red-flagged by the Australian National Audit Office include its lack of a formal investment strategy and stakeholder engagement framework, both which were listed for completion more than a year ago.
This was despite the fund investing $434.5 million across nine companies, including startups like Harrison.ai, Vault Cloud and Quantum Brilliance and mining giant Arafura Rare Earths, over a seven-month period.
The Australian National Audit Office also found gaps in the NRFC’s due diligence on investments, while its final board member was appointed without formal due diligence checks due.
In a statement days after the release of the audit, shadow industry minister Alex Hawke on Tuesday afternoon said the findings were “deeply concerning” and raise questions about the NRFC’s governance arrangements.
“It’s deeply concerning that hundreds of millions of dollars in taxpayer funds have been splashed around without there being an investment strategy in place,” he said in a statement.
Mr Hawke, who replaced Sussan Ley as shadow Industry minister following the Coalition’s election loss, said he had requested a briefing from the ANAO on behalf of the Coalition to better understand the findings.
“The NRF should be transparent about its processes given the huge taxpayer funds that Labor have funnelled into it,” he said, adding that the Coalition “remains concerned with the powers granted to the minister under the NRFC Act”.
Since voting against enabling legislation for the $15 billion industry fund in 2022, the Coalition has opposed the NRF and has also been critical of the NRFC’s progress getting funding out the door.
Costings released during the election campaign show it intended to wind up the NRF and use its remaining funding to establish two new funds for national debt repayments and infrastructure, prompting an outcry from the Manufacturing Workers Union.
A spokesperson for the NRF said the Corporation was working through the improvements identified in the audit to “further strengthen our processes”, noting that some areas of concern had already been addressed.
“While it is important to make sure we are continuously improving in these areas, as an organisation we are focused on delivering impactful investments on behalf of all Australians,” the spokesperson said.
The spokesperson also responded to the ANAO’s concerns over its lack of a formal investment strategy, saying that the NRFC’s investment policies – which include investment strategy and targets – “have been in place and published on our website since May 2024”.
“Additionally, a Strategic Asset Allocation was presented to NRFC’s Board in August 2024 and a draft investment strategy was provided to the Board in September. Together, these documents have provided a robust strategic underpinning that has guided all investments made by NRFC.”
Do you know more? Contact James Riley via Email.