Establishment and Governance of the Nation-building Funds
As part of the 2008-09 Budget, the government announced that it would establish the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund (collectively known as the Nation-building Funds). Finance played a key role in implementing the Nation-building Funds and in developing the Nation-building Funds Act 2008, which established the funds on 1 January 2009.
The Nation-building Funds provide financing sources to meet the government’s commitment to invest in critical areas of infrastructure such as transport, communications, energy, water, education, research and health. Projects funded through the Nation-building Funds (with the exception of the National Broadband Network) were subject to a governance framework that included assessment by the relevant advisory body against the evaluation criteria for each fund. During the development of the 2009-10 Budget, the department provided advice to the Finance Minister on this framework and on spending proposals from the funds.
Finance, in conjunction with the Treasury, also provided advice to the government on the Nation-building Funds’ investment mandates. The Future Fund Board of Guardians, in accordance with the investment mandates, manages the investments of the Nation-building Funds.
During 2008-09, Finance facilitated the crediting of $22.4 billion to the Nation-building Funds. As part of its response to the global financial crisis, the government announced the first projects to be financed from the Nation-building Funds in the Nation Building Package on 12 December 2008 and in the 2009-10 Budget. In these announcements, the government committed to spending $10.7 billion from the Building Australia Fund, $4.1 billion from the Education Investment Fund and $3.2 billion from the Health and Hospitals Fund. Finance consulted with portfolio departments to develop and coordinate the process for portfolio Ministers or their delegates to make payments from the Nation-building Funds. The first payments for agreed infrastructure projects were made from the Nation-building Funds during June 2009.
Finance assisted in the development of the Nation-Building Funds Amendment Act 2009, which redirected $2.5 billion that was set aside from the Education Investment Fund to the Clean Energy Initiative.