Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

I am pleased to support the Asian Infrastructure Investment Bank Bill 2015. Labor welcomes the introduction of this bill. I cannot understand why it has taken the government so long to be involved in what will be the biggest shake-up in global finance since Bretton Woods. It is something that Australia must be part of. For many months now, those on this side of the chamber have argued strongly for Australia to become a founding member of what will be a very promising global institution aimed at developing infrastructure within our region. We have watched as the rest of the world got on board—firstly the United Kingdom, then New Zealand, South Korea, Germany, France, Italy, India and Singapore. They all joined some time ago, while the Abbott government dithered, remained paralysed by fear and indecision.

It is not just this policy issue that the Abbott government seemed to have difficulties making decisions on; there are many others. Over the course of the last week, we have seen that in the case of same-sex marriage and other issues. They are completely paralysed, with no plan—particularly around economics—for Australia's regional development. They got rid of the Asian Century white paper, which was our country's road map, if you like, for engagement with Asia, particularly our highest trading partner, China. There is now no plan to deal with China and to make sure that we grow that very important economic and social relationship. All in all, the saga has really been an embarrassing display of disunity that is rife within this government, much to the detriment of Australian people and businesses.

Australia should participate in this fund and use its world-recognised expertise in infrastructure planning and financing to help ensure that the Asian Infrastructure Investment Bank matches the established transparency, human rights and environmental standards of other major multilateral funds. Our involvement can ensure that the right governance structures are put in place and that the bank delivers the best outcomes in our region, particularly in the Asia-Pacific area.

In the Asia-Pacific area there is enormous opportunity and a very large infrastructure deficit, as many speakers in this debate have mentioned. There is opportunity for growth, for improvement in living standards and for lifting people out of poverty. While the AIIB is yet to include any Pacific nations, this is an area in which Australia can be a vocal campaigner for bringing increased multilateral backed infrastructure investment to the region. We all know of the disadvantage that many in the Pacific face; we all know of the low living standards and the fact that many Pacific nations do not meet their millennium development goals. They include some of our nearest neighbours, such as Papua New Guinea and the Solomon Islands. This bank, we believe, will be an opportunity for multilateral institutions and nations within the region to concentrate on some of those infrastructure deficiencies and to lift living standards. That is ultimately why Australia should be involved.

It is proposed that the AIIB will be a new multilateral fund to focus on projects in areas such as energy, telecommunications and transport for Asia's underdeveloped countries. The idea is to harness some of China's vast financial resources and reserves, along with the expertise acquired in recent decades of its own massive infrastructure development in order to improve and develop projects within the region. Beijing will provide at least 50 per cent of the capital needed for the bank, which is estimated to be between $50 billion and $100 billion. With these sorts of funds, the AIIB will already be nearly two-thirds the size of the Asian Development Bank, which is valued at about $165 billion. We are not talking about a small institution here; we are talking about one of the largest shakeups of international finance and infrastructure since Bretton Woods, as I have already said. President Xi Jinping has stated that the AIIB will follow multilateral rules and procedures to ensure the best practices of the World Bank and the Asian Development Bank.

The bank was officially launched in Beijing last year at a ceremony attended by 21 of those founding countries, including Thailand, India and Malaysia. Australia was invited to be one of those founding partners and initially showed some interest, but then went mute on the idea of becoming a founding partner. Despite the encouragement and the support of this side of the chamber, the government was wracked with indecision, became frozen on the idea and was not one of those founding partners. Thankfully, it has now made the right decision and found its voice on involvement with the bank and on greater involvement in the region, and Australia will now become a member of the bank. And that is the right decision.

The bank can play an important role in promoting infrastructure development and growth in our backyard, the Asia-Pacific. This also provides Australia with a terrific opportunity to play an active role in regional development and trade. There is a large infrastructure deficit in Asia. The existing institutions seem unable to meet the real needs for infrastructure across Asia, both currently and into the future. There are estimates that from now until 2020 Asia needs some $8 trillion worth of infrastructure development to meet the growing populations and to improve living standards. Indonesia alone is said to require $230 billion worth of that investment. The Greater Mekong Subregion, linking less developed parts of Vietnam, Laos, Cambodia and Thailand, needs $50 billion. That gives you an idea of the magnitude of the task and the importance of the role of the AIIB in providing and dealing with some of the infrastructure deficit. The AIIB will play a vital role in financing and coordinating many of those much needed projects within our region.

A view has been put, certainly by the United States, that Australia should not be involved in this body, and they have encouraged other nations to take a similar view. My belief is that in joining the AIIB it is not necessarily an either/or dichotomy—it is not a simple decision of either/or. It is definitely within our capacity to foster close relations between the United States and China. In fact, I think Australia has a great opportunity to play a role in promoting and fostering relations between those two economic powerhouses on the Pacific rim—two very important partners for Australia. There is also an opportunity for Australia to be involved in the bank and to promote development in our backyard, particularly in the Pacific region. Essential infrastructure, such as new hospitals, new education facilities, women's shelters, new roads, new dams, new bridges, boosts living standards. Such projects can connect communities, generate economic activity and boost GDP. Australia has a wonderful opportunity to promote all this through the bank.

The other area in which Australia can play an active role through the bank is in tackling climate change. We all know that China has over the last couple of years has become very serious about tackling climate change. It is the world's largest investor in renewable energy. Over the course of the next 12 months, they will bring online a national emissions trading scheme. I was looking today at the exchange for what will be the largest carbon market in the world—in terms of both dollars and emissions—to be established in Beijing. Think about this, Speaker: up until the election of the Abbott government, which nation in the Asia-Pacific region held the expertise on carbon reduction schemes, on carbon trading and on emissions trading schemes? It was Australia. We have missed one of the most important economic opportunities for future generations ever. The biggest carbon market in the world is going to be established in our backyard over the next 12 months. Australia could now be advising China on the establishment of the world's largest carbon market. We could also be talking to them about linking schemes and providing an opportunity for the world's largest carbon market exchange to be here in Australia, ensuring that we are developing the expertise in carbon trading and research and development of renewable energy, in financing projects and the like.

Debate interrupted

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