Look, if someone can show me the flaw in my reasoning, then I'm...

Look, if someone can show me the flaw in my reasoning, then I'm happy to change my mind. But this "NAIF myth" is dangerous: all it would take is some journalist to ask the NAIF PR team "why didn't you fund PSD", or "why aren't you funding businesses", and for the NAIF PR team to answer honestly and we're down significantly. Thursday/Friday last week we got our first shorters - if they take hold, what does it mean for our attractiveness to bankers, and such.

Ultimately it doesn't matter what the company says about the NAIF, what matters is what the NAIF does in terms of the company - and the NAIF itself is quite limited in what it can do. So, a small power-station built by a smaller electricity player might make sense - they could claim "yes, we're going to get money for this power station because people will buy the kWhs, but without power that prawn farm won't be built - and all those people won't get jobs" and that might fit the NAIF rules - but it's very hard to argue that a company that's going to build a huge prawn farm has a public benefit. The car manufacturers employed a lot of people, but their "public good" wasn't enough to keep the subsidies flowing.

Let's also consider scale - PSD is going to take a lot of money - phase one (as it currently stands) is going to require a sum of money that would be more than 10% of the NAIF's entire facility.

Now, with all of that in mind, consider Part 2, section 7 of the NAIF directive:

1. Matters to be considered when making Investment Decisions

(1) Before making an Investment Decision to offer a Financing Mechanism, the Board must be satisfied:
(a) the Investment Proposal has met all mandatory criteria in Schedule 1 to this Direction; and
(b) that any return will cover at least the Facility’s administrative costs, and the Commonwealth’s cost of borrowing.
(2) In making an Investment Decision, the Board must have regard to:
(a) the extent of any concession that may be offered to a Project Proponent, in accordance with section 9 of this Direction; and
(b) the potential effect of the Project on other infrastructure; and
(c) the potential effect of the Financing Mechanism on the Australian infrastructure financing market; and
(d) the potential of the investment to encourage private sector participation in financing a Project.
(3) The Board, in making an Investment Decision, must consider a preference for:
(a) a diversified portfolio, including with respect to industrial and geographic spread across the States and Territory that comprise Northern Australia; and
(b) Projects that address an infrastructure need identified through a Commonwealth, State or Territory assessment process, pipeline, or priority list such as the Northern Australia Infrastructure Audit.

Go read the Northern Australia Infrastructure Audit for yourself (http://infrastructureaustralia.gov....cations/files/IA_Northern_Australia_Audit.pdf) and you will see it talks about road, airports, electricity, gas, port facilities, population growth, water facilities (like dams and water treatment plants), rail lines and communications stuff - all of which we categorised as "ancillary" a few posts ago.

I know of no infrastructure plan anywhere in the public service that says "you know what we need? the worlds biggest prawn farm in the middle of a cattle station"...

We don't need misleading hype - we need hard-headed analysis and clear expectations.