Senate Finance and Public Administration Legislation Committee, , 18:22 to 46:28
Aboriginal Investment NT and Indigenous Business Australia discuss capitalization, Future Fund strategies, and community grants.
Topics: First Nations, Grants administration
Speakers: Nigel Browne, David Knights, Senator Dave Sharma, Senator Karen Grogan, Deirdre O'Sullivan, Interjection, Senator The Hon Malarndirri McCarthy, Speaker 7
Good morning everybody. I declare open this hearing of the Senate Finance and Public Administration Legislation Committee looking into the 2026 27 supplementary budget estimates. I would like to start by acknowledging the traditional custodians of the land on which we meet and pay my respects to the elders past, present and emerging and extend that respect to all ainal and tourist rate islander people here today. The committee has set Thursday the 5th of November as the date by which senators are to submit questions um written questions on notice and Thursday the 17th of December as the date for the return of answers to those questions taken on notice. The committee's proceedings today will begin with the indigenous portfolio agencies followed by the finance portfolio as listed on today's program. Understanding order 26, the committee must take all evidence in public session and this includes answers to questions on notice. I do remind all witnesses that in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as a contempt. It is also contempt to give false or misleading evidence. The Senate has endorsed the following test of relevance of questions or estimates hearings and that is any question going to the operations or financial positions of the departments and agencies which are seeking funds and estimates are relevant questions for the purpose of estimates hearings. I do remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has the discretion to withhold details or explanations from the parliament or its committees unless the parliament has expressly provided otherwise. The Senate has resolved also that an officer of a department of the Commonwealth shall not be asked to give an opinion on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution does not preclude questions asking for explanation of policies or factual questions about when and how policies were adopted. Witnesses are reminded of the Senate order specifying the process by which a claim of public interest immunity should be raised. and I incorporate the public immunity statement into the Hansard. I remind senators their obligation under the behavior code for Australian parliamentarians to treat witnesses with dignity, courtesy, fairness, and respect. And as is my usual practice, I have provided copies of the code in the room for people's reference. An officer called to answer a question for the first time should state their full name and the capacity in which they are appearing. And I remind committee members and witnesses who are appearing via video conference and who are not speaking to please mute their microphones. I would like to welcome uh Senator the Honorable Malender McCarthy, Minister Indigenous Australians and Mr. David Knights uh Chief Executive Officer Indigenous Business Australia and Mr. Nigel Browne, Chief Executive Officer of Aberiginal Investment NT and the other officers that you have brought with you to the table. Minister, would you care to make an opening statement? Uh good
morning chair. I'd like to acknowledge that we come together on the lands of the Nanol and Yamry peoples and pay my respects to elders past, present, emerging and also to the portfolio body members who are here today.
Mr. Ram, would you like to make an opening statement?
>> Yes, thank you chair.
>> Please go ahead.
>> Um [clears throat] I too would also like to acknowledge um the traditional owners of the land upon which we meet today. Um I also before I start the opening statement uh wish to on behalf of the board, management and staff of Aberinal Investment Northern Territory extend our best wishes to Dr. Helen Haines in relation to uh uh the tragic events that have befallen her. Ainal Investment Northern Territory supports Aboriginal businesses, organizations and communities across the Northern Territory to build economic strength and greater control over their futures. Our strategic investment plan guides our work, supporting business growth, enabling community-led development, building long-term wealth, and expanding Aboriginal economic participation. Today, I will briefly outline our delivery, the practical benefits of the work, and our priorities ahead. In 2025-26, Aboriginal Investment Ent approved 110 grants totaling 21.3 This included 72 business grants worth 6.4 million and 17 community impact and innovation grants worth 14.6 million. Both programs exceeded their annual approval targets. These grants support commercial enterprise cultural activity and community services. At Babara Women's Center in Men and Greeter, Aberiginal Investment NT funded funding supported a new 9meter printing table through a community quick response grant installed in March. It enables artists to produce commercial lengths of fabric and several artists to work simultaneously, strengthening an enterprise grounded in Aboriginal women's skill and culture. We continue to improve grant processing and support the completion and acquiddle of earlier projects. Our collective impact initiatives supports longerterm community-led development. The first two communities have been selected with a principal an inprincipal allocation of 30 million. In August, we signed our first memorandum of understanding with tripleAC for the work at Ginger Porter or Santa Theresa. Community priorities and governance arrangements are being developed with the next stage focused on project plans and funding approvals. A second expression of interest is underway. This gives communities a substantive role in setting priorities and shaping the projects we support. Our nation building investment activity has also progressed. Establishing the investment and compliance arrangements took longer than anticipated, delaying deployment in 2025-26. Five transactions, however, were approved in the first quarter of 2627 totaling approximately 10.5 million. These include finance for maning greeted progress association to expand motel accommodation, Ratingu Aberiginal Corporation to support essential worker housing in East Arnham and Tiwi plantation to acquire forestry These opportunities show how capital can support Aboriginal business growth while addressing practical constraints on regional development. Our focus is on progressing approvals into funded projects and tracking the benefit as they are delivered. Our commercial investment portfolio supports both current activity and long-term financial strength. In 2025-26, the future fund returned 6.6% and the community ready fund returned 3.8%. The future fund supports wealth for future generations while the community ready fund provides capital for our grants, community initiatives, and investment activity here and now. Looking ahead, we are strengthening our investment pipeline and working with organizations such as Indigenous Business Australia, Indigenous Land and Sea Corporation, the Australian National University's First Nations Portfolio and the North Australian Infrastructure Facility to identify opportunities for complimentary finance. We are also developing supplier finance opportunities to help ainal businesses participate in major project supply chains. Led by a originalinal investment NT, a compact for ainal economic development aims to improve coordination between institutions, strengthen project readiness and connect ainal proposals with expertise and capital. Each participating organization retains its responsibilities and decision-making processes. Our next steps are to agree on practical coordination arrangements and identify initial opportunities for collaboration. As delivery expands, we are strengthening, excuse [clears throat] me, we are strengthening our governance, organizational capability, and measurement of outcomes. Our 2026 2030 corporate plan supports this through improvement to the data collection and a transitional step that strengthens current measures whilst establishing the foundations necessary to support more matured outcomes and impact reporting over time. This includes shifting our reporting from activities and outputs towards outcomes and impact particularly how our funding contributes to employment business growth essential services and stronger aberiginal organizations. The ANAO issued an unmodified audit opinion for our 202526 financial statements. These have been included in the Aboriginal Investment NT's annual report which was approved to be tabled on the 26th of October. Our priority is to put Aboriginal capital to work responsibly, build lasting Aboriginal assets, stronger businesses and greater economic independence. Thank you, Chair.
>> Thank you very much, Mr. Browne. Uh Mr. tonight. Do you have an opening statement?
>> I do, Senator Greg. I will be brief. Uh, so thank you for the opportunity to speak this morning. Um, firstly, I would like to acknowledge the Nanowal and Nambry people. Pay my respects to their elders. I extend that respect to all Aboriginal and toouristrit islander people here today. And on behalf of IBA, we also extend our best wishes for the recovery to Helen Haines. This has been a foundational year for implementing our IBA strategy towards 2030 and positioning us to respond to the growing demand for finance and investment across the First Nations economy. Since releasing the strategy, we have seen significant interest from First Nations organizations seeking capital for larger and more complex projects. This highlights both the scale of the economic opportunity and the importance of addressing IBA's current capital We are working closely with government including NIAA and the central agencies to implement legislative reforms, finalize our borrowing rules and establish an appropriate borrowing framework. Partnerships continue to be central to our approach. We have strengthened our relationships across government, the banking sector, global indigenous capital partners and industry to increase the availability of culturally responsive finance and unlock the opportunities for First Nations businesses and communities. Our investment portfolio has grown to 578 million with 49% of it held alongside First Nations co-investors. This portfolio continues to perform strongly, delivering average returns of 7.2%. 2% over five years and 9% over Last year financial year, we delivered $80 million in lending through our business finance activities. We also continued to invest in capability building, supporting entrepreneurs and businesses to grow, create jobs, and participate, excuse me, in new economic opportunities. In response to changing economic and environmental conditions, we strengthened our hardship support measures to assist customers experiencing financial pressures. This ensured First Nations businesses had access to practical advice, tailored support, and flexible repayment arrangements. Demand for our home ownership program remains very strong. During the year, we provided $349 million in home loans, supporting approximately 1,465 First Nations people into housing. This included $16 million in shared equity assistance for 90 families. Home ownership remains a cornerstone of IBA's purpose because it creates financial security and builds prosperity for generations of indigenous families to come. It provides a platform for broader social and economic outcomes. We continue to deepen our understanding of intergenerational impact with our fifth impact report. This report focuses on the aspirations and experiences of First Nations young people and examines how we can better support their financial and economic aspirations. We will be launching the report later this week. Our enabling legislation requires us to manage and grow a capital base for the benefit of ainal and toristra island people. I'm pleased to report that our total assets are now 2 around 2.4 billion including revolving finance business products. IBA deployed 498 million to the indigenous economy in 2026. Importantly, IBA continues to operate on a highly sustainable basis, funding 91% of our operations through lending and investment activities across housing, business, investment, and economic development. We continue to see strong capability, and opportunity through the First Nations economy. Our focus is ensuring that IBA has the capital, capability, and partnerships required to meet the opportunity and deliver long longlasting economic impact. I'm confident that the strategic foundations established over the past year position IBA strongly for the years ahead and we look forward to discussing our performance and priorities with the
>> Thank you, Mr. Knights. Um, we will start with questions. We'll start with uh Senator Sharma.
>> Sure. Thank you, Chair, and good morning everyone. thanks for your appearance here today. Um, if I could start with you, um, Mr. Browne, um, can I understand just the the nature of your capitalization? So, it was started with $680 million in 2022. Um, I understand the future fund that you mentioned in your statement, is that a portion of the $680 million and how is that structured?
>> Yeah, that's correct. Uh, thank you for the question, Senator. So the original corpus of 680 million uh makes up a $500 million future fund.
>> Okay.
>> Um the board um was minded uh to uh be a bit guarded in how they invested in that uh total but now the um they divided it up into eight separate tanches.
>> the future funds 500 [clears throat] million divided into eight separate tanches
>> and now that's fully invested. So that's um now uh locked in uh for a 10-year period um earning a return for uh uh the future uh prosperity of the ainal investment in obviously the Aberinal people of the Northern Territory. The remaining uh uh 80 uh goes towards the community ready
fund. Okay,
>> that is the fund which uh essentially funds everything else from our grants, our smaller investments um and our uh activity here and now.
>> Okay. So, um when was the future fund established the 500 million fund?
>> Yeah. So, dear Joe Silvin, chief operating officer Aboriginal investment entity. So the future fund was established in December 2024 and at that time uh as Mr. Browne said we the board decided to invest in eight tanches over a 2-year period. It's now fully invested as of September 2026. The 500 million is now invested in the original investment NT trust.
>> Okay. So um it was the board's decision to set up the future fund. I just want to understand
>> correct. [clears throat] So the uh the strategic investment plan was developed by a originalinal investment entity board and tabled in parliament in August 2024 and in that uh it lays out the establishment of the future fund for maintaining that funding for future generations of Aboriginal territorians.
>> Okay. Minister, did you need to approve the creation of the future fund or this just a board decision entirely?
>> Board decision.
>> Right. Okay. Um [clears throat] and you said the um the $500 million is now fully invested in eight tanches. Could I just get on on notice what those investments are? You don't need to provide it uh here in the room. Um and I saw in your opening statement you said that that fund returns 6.6% in 2025 26.
>> That's correct.
>> What's the um what's the target return rate for that fund?
>> The target return rate for that fund is CPI plus 3%.
>> Okay. And um did you have a time horizon on that fund as well? Was it 10 years? >> Yes. Okay. Um, and the decisions about what this fund was invested in, that's the board decision decisions taken by the board.
>> We have an investment committee, a subcommittee of the aberiginal investment entity board where the chair of that is one of our independent directors and they uh they're delegated to make the asset allocations and investment decisions.
>> Okay. All right. Thank you. Um, and how many I mean I don't want you to give me an entire breakdown, but what are some sample in investments for that $500 million fund? In particular, I guess I'm interested in privately owned indigenous businesses that the fund would have invested in directly.
>> So, we uh have a investment manager, Janna. So um we invest in multiple products that Janna Investments actually hold but we can definitely take that on notice to give you a breakdown of uh the different types of funds that are there.
>> So you mainly direct through fund managers then
>> correct?
>> Okay. Did you have something to add Mr.
general manager investments. So the future fund doesn't have any individual direct investments in underlying entities. It's all through other funds. >> Okay. as advised by Janna and the investment committee.
>> Okay. And are these other funds I mean have they got a domestic mandate, a global mandate? Are they in listed or unlisted? I mean what's their
>> it's it's a combination of all it's structured similarly to what a typical super fund would be structured like uh there's a combination of local and international equities, private uh markets, debt, uh private credit and commercial properties. So it's a diversified portfolio invested in other funds globally and locally.
>> Okay. Okay. Um is there an investment strategy that's publicly available?
>> There is an investment strategy.
>> Yeah. If you could just provide that on notice as well as as well as the breakdowns. That's uh that would be helpful. Thank you. Um if I could turn out to Indigenous Business Australia, Mr. Knights [clears throat] um cuz I'm just conscious we're short of time so I'll be quick about this. Um, I understand that IBA's got a new capital raising model which I think you touched on a little in your in your opening statement to talking about finalizing borrowing rules and establishing an appropriate borrowing framework. Um, what will be the maximum amount that IBA will be permitted to borrow under that new framework?
Uh so uh Senator Sharma in our strategy we we have an ambition um that's on our strategy on a page um we have set up a a um risk appetite statement uh which has been approved by our board. Uh we do not intend uh to borrow out of line with normal financial institutions uh in terms of debt leverage ratios uh and so forth. Um we have a balance sheet at the moment with uh almost no liabilities. Um, so we're we're almost 100% equity.
>> So you said you total assets at 2.4
>> So to give you a perspective, the main banking system runs circa 93 94% on on liability to asset ratio, tier one equity about 6%. Uh we we'll be running under that um senator and we'll be we'll be uh under strict management and controls not only by the IBO board but but also by uh the central departments
>> Okay. Yeah. So what will govern like who will who will put [clears throat] in place the investment rules?
>> So uh the investment rules um so investment rules or borrowing rules?
>> Uh investment rules and borrowing rules. I mean we're >> so the borrowing settled yet?
>> Yeah, the borrowing rules um haven't been settled yet, but they will be they will be um given to IBA um via the the centrals. In fact, they're being uh drafted in OPC at the moment. Um so we understand that that that process is is well advanced uh and uh those rules will then be tabled in parliament early next year um for a a period of 15 days. Uh we need to comply with those rules. Uh in terms of our investment rules and policies uh they will be governed by the IBA board.
>> Okay. And have those investment rules and policies been um developed yet or?
>> Uh they are all being drafted in parallel. Um so uh as I said, we've got the risk appetite statement and we're now we're now working through um all of those appropriate covenants.
>> Okay. Um and I understand you you've said, I don't know if this was in your opening statement, so it might be somewhere else, but that you intend to mobilize um between five and 7 billion over 5 years. Is that have I got that right?
That is our strategic ambition, Senator Sharma. But that that is through a blended finance arrangement. So our intent is uh very similar to all the specialist investment vehicles. Uh as a government uh CCE uh it's our job to to catalyze the investment um and crowd in private investment and corporate investment uh into projects. Um so uh going forward, we'll also be looking at our contribution in a blended investment um approach. uh as Nigel said earlier, you know, we're working with other indigenous portfolio agencies uh to collaborate around those opportunities.
>> Okay. So, how I mean, how much of that I know this figure hasn't been settled yet, but roughly speaking, how much of that 5 to7 billion will consist of debt borrowed by the IBA, do you think?
I'll need to take that on notice in in the end shape and we can come back on the modeling on it. It's a combination of debt and equity of course in terms of financing
>> but like at 1 to2 billion or more or less
>> it would be around that vicinity. Yes.
>> Okay. Okay. That's I just wanted a ballpark figure. That's fine.
>> I think to give you perspective if you look at if you look at the other um uh specialist investment vehicles they run at a ratio of about 25% of the total blended investment
>> being debt.
>> Yeah. Yeah. is either debt or equity but that's the government funded component.
and would you do that through a bond the debt or what's the what's the intent
>> Uh that will be dictated by the the um the borrowing rules but most likely we would be uh taking similar types of instruments that specialist in investment vehicles um would would most likely do. In fact, uh we may end up um you know laterally borrowing um from within government um to ensure that the overall government debt is is minimized.
>> Okay. And then your security for that debt will be your your asset base that you've got.
>> Correct.
>> Yeah. Okay. So I'm just trying to understand I guess is any of your debt going to be government backed debt or no? It's it's going to be backed by the assets of the IBA.
>> It'll be backed uh by the asset base of
IBA. Not by the government.
>> No, we to my knowledge we are we are not um in a position to get a government guarantee.
>> do we have I don't want to take up all the time. Chair.
>> No. No balls in your court, Senator Shan.
I think look I think if I could just go back briefly to Aboriginal investment. Um then if you don't mind um what's the vision Mr. Browne of um Aboriginal Investment? So you've got the you've got the future fund, you've got the community fund. Is that right?
>> Community ready fund.
>> Community ready fund. [clears throat] Tell me about I I think I understand what the future I mean the future fund is designed to preserve capital and provide a steady stream of income. The community ready fund you said that provides >> grants as well. So is that I mean obviously that will deplete it over time. Is it intended that that will be topped up by growth from the f future
>> uh growth from the future fund but also uh from other investments uh that we make. Um in terms of the overall vision, the way that I explain it to people that come and work for a is we we're uh reingjecting equity into Aboriginal communities across the Northern Territory um that for a very long time have not had that opportunity like a lot of other communities. That's the very basic model. Um but we are working not only um to the mandate that we have in relation to uh self-sufficiency and self-management which are fairly dry descriptors um but we're also um wanting to uh build um or help build rather um Aboriginalled uh infrastructure uh and other projects that help communities um uh self-determine whatever they choose to and and the the community uh sorry the collective impact grants which is the largest grant um that we now have we've got the the two communities that we're working with at the moment and uh the EOIs are out for the the other two now um they're really I suppose the the pinnacle of um what we're trying to achieve in terms of working with communities on community-led uh projects whatever it may be over you know a number of years uh to allow them to create their own uh opportunities, their own business models, their own industries. um um to hopefully one day get to the point where there's no distinction between a remote Aboriginal community and Bendigo or uh you know another regional town somewhere uh where people um have uh no barriers in front of them um to be able to live life as they determine it.
>> Have you got any um specific investments in the community ready fund that you're or or grants? I mean that you that you hold out as a show piece for the fund and what it can achieve.
>> Yeah. So um it's it's very early days for the collective impact um uh grants um both Sander Theresa Ginger Porter uh in the central region and Martha Homelands in the top end of the first two that's off the rank so to speak. So they're still very much in the planning stages. Um in relation to our uh community impact and innovation grants um there are a number of different uh projects across the territory um that we have backed um there in relation to uh a range of different things uh aquaculture uh being one of them uh agriculture um we're looking into the the mining and resource sector uh which is another reason we also established anou with uh Tyan recently and we're looking to establish uh partnerships with other uh resource and rare earth um mining operations in the territory as well. Uh in in a lot of places those um uh commercial um projects are the only options for for remote areas as well. So um we're wanting to try to not only um look at the financial side but also to help Aboriginal businesses um win contracts and um engage in their own economic activity as well.
>> Yeah. Yeah. I saw you mention in your opening statement supplying helping Aboriginal businesses participate in major project supply chains. Um thank you chair in the interest of time. I'm happy to leave it there. Thanks for your time and appearance today.