The maligned Northern Australian Infrastructure Facility would be axed and replaced with a new fund focused on pipelines to link gas fields across Queensland and the Northern Territory under plans to be unveiled by Labor.
Opposition Leader Bill Shorten on Tuesday will announce that if the Labor Party wins the May 18 election it will end the infrastructure fund that was created by the Abbott coalition government with a mandate to sink $5 billion into projects across the northern reaches of Australia.
But it has been mired in constant controversy since it started operation in 2016, particularly around governance and the slow pace in finding suitable investments.
Until early this year the only project to get under way was a $16.8 million investment in logistical services in the isolated West Australian community of Onslow.
The office of the Auditor-General earlier this month was critical of the infrastructure fund, noting a lack of transparency around decisions while stating that its internal remuneration practices were inconsistent with the public sector.
Mr Shorten, campaigning in north Queensland where Labor is looking to hold the marginal seat of Herbert while winning the Coalition-held electorates of Leichhardt, Dawson, Flynn and Capricornia, said the fund had failed to deliver for the people of northern Australia.
He said not a cent of the $5 billion earmarked had yet been spent in Queensland, and highlighted that it had spent more money on authority salaries than actual projects.
The NAIF has been an abject failure.Opposition Leader Bill Shorten
The NAIF would be replaced by a development fund that would look to work with private financiers and investors to deliver major projects across Queensland, the NT and WA.
"The NAIF has been an abject failure," he said.
"Labor's Northern Australia Development Fund will provide a financing facility and work with Infrastructure Australia to identify and support projects of national economic significance, such as gas pipelines, in Australia's north."
Labor will set aside up to $1.5 billion for proposed pipelines across Queensland's Galilee and Bowen basins while another line connecting the Beetaloo basin to Darwin and across to the east coast.
Mr Shorten said opening the Beetaloo basin could help turn Darwin into a "manufacturing powerhouse" with the area holding enough gas to supply the domestic market for up to 400 years.
The new fund would also sink $1 billion into tourism projects across northern Australia.
Recommendations from the recent auditor-general report would be incorporated into the design of Labor's new fund while indigenous Australians would be appointed to its board.
Mr Shorten said all existing projects would be honoured with funding capped at $5 billion.
This would include $150 million to upgrade airports in Darwin, Alice Springs and Tennant Creek which while approved by NAIF have yet to be green lighted by the NT government.