Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

The Labor Party support the Asian Infrastructure Investment Bank Bill 2015 and we will facilitate its passage through this House and the other house. We support this bill because this bill facilitates Australia joining the Asian Infrastructure Investment Bank. The Labor Party have said consistently that Australia should join this bank. We were saying this consistently way before the government. While the cabinet was in meltdown, while the foreign minister was arguing with the Treasurer and while the Prime Minister was dithering about whether to join this bank, the opposition was saying very clearly that it was an easy decision—Australia must join. Australia should join this bank because it is the right thing to do. Australia should join this bank because China has shown leadership in setting up this bank and the rest of the word should join. But the government dithered; the government could not make its mind up. The foreign minister said we should not join, for reasons known only to herself. The Treasurer, to give him credit, knew that we should join, but he could not carry the day in the cabinet. On the other hand, the Leader of the Opposition, the Deputy Leader of the Opposition and I were of one mind immediately—this was an easy decision. This is a great opportunity for Australia. It is a good opportunity for the world to come together to deal with the infrastructure gap in Asia and to work together on the development of Asia. But, no: while the Labor Party was lending bipartisan support to this from last October, the government could not make up its mind.

I was amused to see in the second reading speech the Treasurer boasting:

On 29 June this year, I gave effect to the government's commitment to join the AIIB by being the first person in the world to sign the bank's articles of agreement in the Great Hall of the People in Beijing. My signature was followed by those of representatives of 49 other countries.

He was boasting that we were first. Well, he was the first to sign because Australia comes first alphabetically. That is why his signature was first; it is nothing for him to boast about. We could have been one of the first countries to join the bank when China invited the rest of the world to join. We could have been a leader, but instead under this government we are followers. We had to wait for other countries to join and then we decided to join afterwards. We joined after the United Kingdom, New Zealand, South Korea, Germany, France, Italy, India and Singapore—all of these countries showed leadership. Australia could have been in at the ground floor. It could have been in working with these other countries, setting the bank up, but, no, we had to wait to see what other countries like the United Kingdom would do. I thought we stopped letting the United Kingdom make Australian foreign policy decisions about 70 years ago, but under this Prime Minister and this government apparently we still wait for instructions from Westminster. We know this government is dysfunctional but its dysfunction impacts on policy. Here we had cabinet dysfunction impacting on policy and Australia missing a golden opportunity to come in at the ground floor and join this very important bank.

The Asian Infrastructure Investment Bank will fulfil a very important role. There is a significant gap in infrastructure around the Asian region—around $8 trillion over the next decade is the widely agreed figure, which is a figure I certainly agree with. The bank represents an opportunity for countries of the world to come together and pool funds, and to provide authorised capital so that the bank can facilitate infrastructure investment. We will have a very substantial shareholding of about US$3.7 billion. I note that the second biggest shareholder in the bank is India at about US$8.3 billion and a share of 7½ per cent. Our shareholding is substantial, as is appropriate. This is not a matter that will be reflected in budget figures, but it is an appropriate shareholding for us to have as a very significant economy in the Asia-Pacific region. We certainly support Australia's involvement and we will facilitate, in every sense possible, Australia being as involved as is possible because we should be. But we should have shown much greater leadership than we did. We should have shown the leadership of a nation that understands the opportunities of Asia.

There has been a lot said about China in recent days in this chamber and in the public debate. There has been a lot of lecturing going on from the dispatch box opposite about China and how we need to work better with China. We are not going to take any lectures from a government which for months got this key strategic decision on China so wrong, a government which could not even make a simple decision to join the Asian Infrastructure Investment Bank. They have the gall to come in here and lecture the Labor Party about how to do business with China when you have had the Leader of the Opposition, the Deputy Leader of the Opposition and myself, on behalf of the Australian Labor Party, consistently saying since last October that this is a no-brainer, this is an easy decision. If we were in government, if we were in the cabinet, we would have signed up straight away because it was an opportunity to take. Members opposite need to understand what a strategic error they have made and the leadership this captain's pick of a Prime Minister has made waiting for other countries to show leadership and sending a signal to China that we just do not care about their development.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

What is your position on the FTA?

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Our position is that we should be joining the Asian Infrastructure Investment Bank. That is a position we adopted last October and that the government were dragged kicking and screaming to. The government showed such lack of interest and such a lack of foresight that they could not make a decision to join the Asian Infrastructure Investment Bank. That is the sort of economic leadership we are seeing from this government.

Mr Simpkins interjecting—

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

China did not need to create this multilateral institution. China could have said, 'We are developing a bank and we are going to invest in ourselves,' but China made the decision to work in partnership with the rest of the world and to invite other nations—and not just Asian nations but nations from the rest of the world, such as the United Kingdom, France and others—into the Asian Infrastructure Investment Bank. That is a good thing.

Countries from the rest of the world have noted and supported this development. Singapore, Indonesia, Thailand, France, Germany, New Zealand and the United Kingdom are joining this particular bank—as they should. We welcome their participation. But it would have been a whole lot better if this government had shown more leadership and had realised the opportunities available from joining the bank rather than dithering for months and missing the opportunity to invest in infrastructure in the Asian region.

We all know about the opportunities of living on the edge of the world's fastest growing region. We know about the burgeoning middle class in Asia. We know about the increased demand for protein and Australia's agricultural goods in particular. We know about the opportunities in services—financial services and others—being exported to Asia. We know we have the skills and the capacity in Australia to export so many more services. Australia's financial services are highly developed. The fourth largest pool of funds under management in the world is in Australia, but we do not manage the funds of Asia. Around five per cent of the funds under management in Australia come from overseas. We could be doing so much better. Australia could be a financial services hub. But it would take complete engagement with the Asian economy to be so. You do not reach that sort of engagement when you have a cabinet which cannot even decide to join an important multilateral institution such as the Asian Infrastructure Investment Bank. This government are so dysfunctional that they spent months arguing about whether to take up the golden opportunity to participate in a new multilateral institution.

This is not to say that the other institutions, such as the Asian Development Bank or the World Bank, are not worthy of continued engagement. They have different tasks at hand, as does the International Monetary Fund. They have different tasks to conduct. But the Asian Infrastructure Investment Bank fills a gap. It fills a hole. It is right and proper that the fastest growing region in the world have its own institution devoted to infrastructure investment. It is right and proper that we, such an important economy in the Asia-Pacific region, be involved and a member.

So of course the Labor Party will give wholehearted support to this bill. We will give wholehearted support in the other house as well. But we will take the opportunity to point out that these are opportunities which were presented to Australia last year which the government was dragged kicking and screaming to embrace. We are not going to have the Treasurer boasting that he was the first person in the world to sign the articles of agreement. By virtue of the serendipity of the alphabet, the Treasurer was given the honour of being the first to sign. He has come to the dispatch box and said, 'Look at me: I was the first person in the world to sign!' But he was almost the last person in the world to sign up. He may have been given the honour of being the first person in the world to sign the articles, but he was the last person in the world to sign up to the bank. That is because he was hamstrung.

I am not critical of the Treasurer in this regard. Sometimes I am critical of the Treasurer, but I am not critical of the Treasurer in this regard, because he knew we should sign. He saw the opportunities. But he could not carry the day in the cabinet. He was nobbled by his Prime Minister. He was undermined by his foreign minister. He was not allowed to pursue and progress signing up to the Asian Infrastructure Investment Bank. He was not able to deliver what he knew was in our national best interest.

We have heard a lot of flummery about how we need to have better conditions and better governance. That is just flummery and an excuse—a dishonest one, at that—for months of inaction. The government have not progressed changes to the governance. To suggest otherwise is just wrong. What they have done is buy time, and they have been shown to be lacking in leadership. They have allowed other countries with much less to do with Asia than us to join before us. The United Kingdom, Germany, France, Italy all signed up before Australia. They all indicated their support before Australia.

When these institutions are being developed, the early days are very important. People who are members early are able to influence the development of the institution. Australia lost that opportunity. We lost that opportunity on the watch of the Treasurer. It was not his fault but the fault of his Prime Minister, the foreign minister and the rest of the cabinet, who showed a singular lack of leadership on this matter. So let us not have any lectures from members opposite in their remarks which will follow about Asia and China and the importance of the Chinese economic relationship, because they have completely mismanaged this matter. They missed the opportunity for us to join this bank as an early adopter. This government completely got it wrong.

We welcome the backflip. We welcome the fact that they have finally signed and have finally taken up the leadership shown by the Leader of the Opposition, the Deputy Leader of the Opposition and me on behalf of the Labor Party. They have finally got it is that this is a development which is good for Australia and good for Asia. We welcome the fact that they have finally understood the opportunities presented by this bank.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of the Asian Infrastructure Investment Bank Bill 2015, which is the enabling legislation for Australia's membership of the Asian Infrastructure Investment Bank. The bank is an international financial institution initiated by the Chinese government and is supported by 57 nations—37 regional and 20 nonregional—which are signatories as prospective founding members. The objective is to assist in funding major infrastructure projects throughout Asia and the Pacific.

Australia is not alone in supporting this multilateral international financing initiative. Representatives from the 57 prospective founding member-states gathered at the Great Hall of the People in Beijing on 29 June 2015 at a signing ceremony for the bank's articles of agreement. The Treasurer became the first signatory of the articles on behalf of Australia, and he was followed by the representatives of 49 other nations who signed the articles, which I will name for the record: Austria, Azerbaijan, Bangladesh, Brazil, Brunei Darussalam, Cambodia, China, Egypt, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Iran, Israel, Italy, Jordan, Kazakhstan, Republic of Korea, Kyrgyz Republic, Lao Peoples Democratic Republic, Luxembourg, the Maldives, Malta, Mongolia, Myanmar, Nepal, the Netherlands, New Zealand, Norway, Oman, Pakistan, Portugal, Qatar, Russia, Saudi Arabia, Singapore, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Turkey, the United Arab Emirates, the United Kingdom, Uzbekistan and Vietnam. This represents a truly international venture. The Asian Infrastructure Investment Bank will focus on the development of infrastructure and other productive sectors in Asia, including energy and power supply, transportation and telecommunications, rural infrastructure and agricultural development, water supply and sanitation, environmental protection, urban development and logistics.

Prior to entering parliament, I was involved in a multimillion dollar international financing contract with Chinese investors for a successful commercial development in Western Australia. Today, more than 100 people are employed from within the buildings that were constructed as a result of this international investment. Investment in infrastructure creates long-term sustainable jobs.

The recent experience of many developing countries in the 1990s and the first decade of the 21st century indicates that short-term export-driven domestic consumption development models favoured by mainstream neoclassical economists have not achieved successful results, giving rise to the notion that long-term economic growth can only be achieved through massive, systematic broad based investments in infrastructure assets. Accordingly, it is estimated that an infrastructure funding gap of US$8 trillion exists in the Asian region in the current decade. With initial authorised capital of US$100 billion, the AIIB will be part of the solution to closing this gap.

The AIIB will complement and cooperate with the existing multilateral development banks such as the International Monetary Fund, the World Bank and the Asian Development Bank to jointly address the large-scale infrastructure needs in Asia. Investment opportunities within the emerging economies of the Asia-Pacific region are expanding, in infrastructure as well as in new technologies, new products, new business patterns and new business models. The establishment of a multilateral trading system within the Asia-Pacific free trade zone, together with comprehensive regional economic partnerships, will serve to boost economic and financial cooperation, promoting economic development through industrialisation and regional integration.

Joining the AIIB presents Australia with opportunities to work with our regional neighbours and trading partners to drive economic growth and jobs. Australian expertise in funds management, engineering, construction, architecture and legal services could be widely applied to projects financed by the AIIB. There will be open procurement processes which Australian companies can participate in and a channel to connect Australian equity and industry superannuation funds to bankable projects overseas.

The government, working closely with the private sector, will allow Australian businesses to take advantage of the growth in infrastructure in our region. Australian companies will benefit from opportunities to participate in developing and building new infrastructure financed by the bank, as well as having access to improved infrastructure which facilitates trade in the region. For example, Australian iron ore may be utilised in the construction of railways and bridges, and these more efficient transportation linkages will in turn service the logistics of distributing Australian sourced goods into export markets.

Participation within the AIIB will improve trade relations with other nations and provide valuable commercial intelligence and market research information for Australian firms to utilise in entering the marketplace. A more diversified Australian economy will be less susceptible to the cyclical effects within sectors of the economy. The economic development of Asian nations will promote prosperity and in turn generate new consumer markets for Australian goods and services as wealth and spending increases. We are witnessing the phenomenon of the rising Asian middle class seeking to purchase premium quality Australian exports, sending their children to Australia for an education, and visiting Australia as tourists.

Participation in the AIIB is complementary with the coalition government's white papers on developing northern Australia and agriculture, as the existence of demand-driven emerging markets is essential. The development of roads, rail, bridges, ports, refineries, smelters, factories, water treatment plants, electricity generation and transmission infrastructure will see living standards rise. Overall, this strategic investment is positive for Australian mining exports, energy exports in the form of coal and liquefied natural gas, agricultural exports, agribusiness and food manufacturing.

The development of Asia will also generate more demand for professional services in architecture and design, engineering, construction, project management, quantity surveying, legal services, contract administration, transport and logistics. It will create opportunities for the development of domestic tourism, international education and health care.

Australia's participation in the AIIB has been generally endorsed by a number of industry leaders. Peter Collins, Chair of Industry Super Australia said:

The resources of the Asian Infrastructure Investment Bank will increase scope for pension and sovereign wealth funds to invest in long term, productive assets in the region.

Similarly, Jennifer Westacott, CEO of the Business Council of Australia said:

As a founding member Australia can play a key role in setting the direction of this body and the decisions it will make to finance projects that address Asia's infrastructure gaps.

Innes Willox, CEO of the Australian Industry Group said.

... the AIIB's objective of financing infrastructure development in the Asia-Pacific region will foster greater trade and economic development in the region of Australia's closest and most important economic partners.

The government's decision to join the bank has been made after key governance conditions have been satisfied as to world's best practice. The government will continue to work with other bank members to establish a governance framework that is effective, accountable and transparent, meets prudential standards and complements the work of other multilateral development banks. Consultation has also occurred with the states and territories, which are broadly supportive and did not raise concerns.

As a result of contributing approximately A$932 million in paid-up capital to the bank, to be paid over a period of five years, Australia is expected to become the sixth largest shareholder in the AIIB and secure a seat on the board. As a member, Australia will have input into key investment decisions. The articles of agreement will form the legal basis for the bank. The bank's governance structure is composed of a board of governors as the top-level and highest decision-making body; the board of directors as the middle level; and the management team which is at the bottom of decision-making pyramidal structure. No single member will control the bank, with major decisions requiring a super majority.

Upon membership Australia will be obligated to provide a capital contribution reflecting Australia's total shareholding of US$3.7 billion, which equates to approximately A$4.6 billion based on the exchange rate, comprising US$738 million or approximately A$932 million in paid-up capital. Paid-up capital will be made in five equal annual instalments with the first payment of US$148 million expected to be made on 1 January 2016. The remaining US$2.9 billion, equating to approximately A$3.7 billion, will be classified as callable capital, which represents a contingent liability against the Commonwealth. There will be no direct impact on the underlying cash balance, fiscal balance or net debt, as using cash reserves to purchase shares represents a change in the composition of the Australian government's assets.

Australia's participation as a founding member of the AIIB complements our nation's free trade agreements, particularly those in the Asia-Pacific region. Australia has nine FTAs currently in force with New Zealand, Singapore, Thailand, the United States of America, Chile, the Association of South East Asian Nations, Malaysia, Korea and Japan. The countries covered by these free trade agreements account for 42 per cent of Australia's total trade. Australia is currently engaged in six other free trade negotiations—two bilateral free trade agreements with India and Indonesia and four multilateral free trade agreements: the Trans-Pacific Partnership Agreement, the Gulf Cooperation Council, the Pacific Trade and Economic Agreement and the Regional Comprehensive Economic Partnership Agreement. The additional countries covered by these negotiations account for a further six per cent of Australia's total trade.

In summary, Australia is part of a group of 57 nations participating in the establishment of the Asian Infrastructure Investment Bank. This initiative is designed to fund much needed infrastructure in the emerging economies of the Asia-Pacific region, for which it is estimated there exists an US$8 trillion infrastructure funding gap in the current decade. This initiative will drive economic growth and jobs in our region by delivering much needed infrastructure, providing great opportunities for Australian trade and businesses.

Passage of this bill is required by 3 December 2015 to ensure that Australia is able to formally participate in the management of the AIIB, when it commences operations by the end of 2015. If the bill is not passed by the end of this year, there is a risk the AIIB will begin operations before Australia formally becomes a member, which could result in Australia being unable to participate in key decisions taken by the management of the AIIB in its formative stages. I commend the bill to the House.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I am delighted to get up to support this legislation. We on this side very much welcome this deal and we welcome the government's support for the c. Sadly, it comes a little late in the day. In fact, on 31 October last year, Labor put out a press release saying:

Labor believes Australia should be actively engaging China on its proposal for an Asian Infrastructure Investment Bank.

Of course, governance and transparency arrangements, as well as environmental, social, and labour matters will need to be worked through.

There is an enormous need for increased infrastructure investment in the Asia Pacific, and we welcome additional investment from China.

The real mystery of this is the fact that we did not sign up earlier. Of course, it is important for transparency and governance arrangements to be clarified, but 27 nations in our region signed up before we managed to, because they were able to reassure themselves on exactly the questions we had.

Australia needs to be a strong advocate, I believe, for room to be made for China in the architecture that was developed after the Second World War for making decisions on issues between states—the relationships between states. If the institutions that were established after the Second World War cannot be flexible to see the changing economic weight of countries in our region, I think there is a role for Australia to advocate for those changing economic relationships to be recognised.

China has sought and failed to gain a role in the existing architecture that is a little bit more commensurate with its very fast-growing economy. Although China has the second largest economy in the world, by some measures perhaps the largest economy, it holds only 3.8 per cent of the voting shares of the IMF. That is less than one-quarter of the voting shares the United States has and just over half of the shares that Japan has. Of course, the IMF has made an effort to change this, but it has been frustrated by the US Congress refusing to pass reforms around the IMF. Naturally, it would be better, I believe, for China to have been part of one of the larger global institutions like the IMF or the Asian Development Bank in a more substantial way. If these organisations are not able to adapt to China's willingness and desire to be a greater investor in infrastructure in the region, then you see what happens—there is in fact a new body established by China. China could have got a loan; it could have just made bilateral arrangements with countries and become a supporter of infrastructure development in countries bilaterally. Instead, it has chosen to go down the route of the Asian Infrastructure Investment Bank, and I think it is better for China to be part of a multilateral institution like this. It is critical that the Asian Infrastructure Investment Bank lives up to the aspirations that it set for itself, to be 'Lean, clean and green': to be efficient, to be corruption free and to be environmentally responsible. Australia's involvement with the Asian Infrastructure Investment Bank certainly allows us to make sure that these goals are being pursued and are being met.

The Asian Infrastructure Investment Bank will play a very important role in reducing the infrastructure gap that so many institutions and individuals have identified. In 2009, the Asian Development Bank found that Asian countries will need to invest $8 trillion domestically between 2010 and 2020 just to keep pace with their expected infrastructure needs. Of that investment, 68 per cent would be for new capacity. According to the ADB, when you break that down by sector, 51 per cent of the investment would be for electricity, 29 per cent would be for roads, and 13 per cent would be for telecommunications. A further $300 billion would be needed for regional infrastructure construction. The infrastructure investment is crucial to keep the global economy strong and growing, and to prevent what the G20 has identified as a potential infrastructure gap of tens of trillions of dollars that could potentially cripple emerging and developing countries and reduce the pace of growth.

The Asian Infrastructure Investment Bank has the potential to boost infrastructure investment in our region by more than $100 billion. That is why, for many months, Labor has been calling for the government to become involved in the AIIB. We supported Australia's involvement from the very beginning, not just so that this funding would be released but also so that Australia could have a greater say in the governance mechanisms and transparency and environmental objectives of the bank.

Of course, it is not just Labor that has been calling for this in the Australian context. The previous speaker mentioned a number of business groups that called for Australia to be involved in the AIIB. There are also a number of academics. For example, Andrew Elek of the Crawford School of Public Policy at the ANU says:

This new development bank can help fill the vast unmet demand for productive economic infrastructure …

…      …      …

All Asia Pacific governments should welcome the initiative to set up the AIIB and the opportunity to participate in it.

Another academic, Peter Drysdale of the ANU's East Asia Forum, said:

It is a wrongheaded idea that China can be contained from participation in multilateral development finance …

…      …      …

Ironically, there was the same hesitation when Japan moved to establish the ADB in the 1960s. There should be none now. If these countries—

he is referring in this instance to Australia, Canada, Japan, Korea and New Zealand—

do not engage China on these positive initiatives they both stand to frustrate entirely positive regional and global economic outcomes and lose the opportunity forever to shape the terms of China's regional and global engagement. In so doing, they would be choosing to act against their national and collective regional interests.

We say that the announcement made by the government that Australia will be involved in the AIIB is welcome. We say that the $930 million paid in capital with a further commitment of $3.7 billion in callable capital is welcome. As a party, we certainly believe in the importance of multilateral institutions and regional and international cooperation. We say that our involvement as a nation of 20-odd million people gives us the ability to shape those institutions in a positive way. You saw our willingness, and indeed enthusiasm, for this type of engagement from the very early days of the founding of the United Nations, where it was Labor's view that we should shape it to be more than a club for the powerful nations; in our campaign for Australia to have a seat on the UN Security Council, which you will remember, Mr Deputy Speaker Kelly, your own party was very opposed to; and in seeing the potential for the G20, rather than the G8, to become the world's most significant economic forum. So I say again that we welcome our participation in the AIIB. We are very sorry that it has come after so much dithering and infighting. We were shocked in one sense when reading the leaks from cabinet about the foreign minister doing her very best to stop Australia signing up to the AIIB, but it is good to see that that position has been overcome by other more sensible ministers in the government. I believe the Treasurer is a supporter of the Asian Infrastructure Investment Bank.

As I have said, it is very disappointing that 27 nations in the Asian region signed up to the AIIB before Australia did. We know that the Chinese economy's links with Australia are very important to our future prosperity. We need to look at what China is saying about not just the size, the scale and the speed of its economic growth but the character of its economic growth and what opportunities that provides for Australia in the future. The Chinese government has spoken at some length about the new silk road and the maritime silk road, which in many ways will reshape the economy of our region—and the economy of the world. In November 2014 Xi Jinping announced plans to create a $40 billion US development fund for the silk road. The annual trade volume between China and the countries along the routes that he has described may surpass $2½ trillion dollars within the coming decades. It is not just the size of this growth that is important; it is the changing character of the growth. The third plenum of the CPA said in 2013 that the Chinese economy will change to provide markets with a much greater role, and administrative reforms to enhance effective governance and greater judicial independence will be supported. We are seeing the effects of those changes, announced at the third plenum, in the character of Chinese economic growth.

When China considers how it will grow it thinks not years ahead but decades ahead. It is one of the shortcomings of our system of government that we get very caught up in the day-to-day and the week-to-week and perhaps the month-to-month—

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Hour by hour.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Hour by hour, sometimes. It is important when we are considering big questions like should Australia be involved in the Asian Infrastructure Investment Bank that we think not about the short-term politics of these questions but about what is in our interests in the decades to come. We need to have a road map to make those decisions wisely. When Labor were in government we put a lot of effort into the Asian century white paper to give us, as a nation, the sort of road map we need to think decades ahead. Sadly there has been an electronic book burning of the Asian century white paper. If the government is serious about engagement in our region and particularly about making the most of the economic benefits of being part of the fastest growing region on earth, then they need, similarly, a long-term road map—a strategy for engagement in our region which, sadly, I do not see at the moment. There needs to be a plan not for how we are responding to the politics of this week or this cabinet meeting but how are we positioning ourselves for the decades to come. Australia and China do have very complementary economies. Many people have spoken about this in the past. We have benefited greatly from China's fantastic success in raising hundreds of millions of people out of poverty. We know that the Chinese economy is changing to be more focused on consumption, and that gives us opportunities for the services industry in particular but many other economic opportunities as well. Because of the changes in the Chinese economy, it has to be part of our long-term thinking, not part of our short-term politics.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I find myself in furious agreement with some aspects of the speech of the member for Sydney and deputy opposition leader. Her speech was quite good, and certainly she is right, she is very much correct—and I wish she would please stay and listen—

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Link to this | Hansard source

An outbreak of goodwill!

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

And there should be an outbreak of goodwill on so many aspects of how we govern the nation. It is a shame that the Australian Labor Party does not get on board more often with government policy, because we could take this nation forward in so many ways—including so many ways involving jobs, and the emphasis has certainly been on jobs this week. The Asian Infrastructure Investment Bank Bill 2015 is all about jobs, and I do find myself in agreement with the member for Sydney when she talks about having a vision for the future—not just for the days and weeks and months ahead and not even for the years ahead but, as she said in relation to Chinese politics, for decades ahead. The Asian Infrastructure Investment Bank will do just that. The governance and transparency aspects of the AIIB were very important to make sure that everything was the way it ought to be before Australia got on board. Certainly there were certain aspects that we needed to guarantee ourselves on. We were always going to be a part of the AIIB but you have to make sure there is clarity, that there is transparency, and that governance is absolutely crystal clear before you sign up. There was a process, and we followed that due process—and that is a good thing.

The Asian Infrastructure Investment Bank Bill will enable Australia to become a founding member of the AIIB, which is expected to become operational later this year. The bank will boost economic growth; it will create jobs and promote trade in our region by financing much-needed infrastructure investment. That last sentence talked about jobs and how important they are. It mentioned trade. The China-Australia preferential trade agreement is so important—not just to our two countries but to the entire Pacific region.

This bank will create opportunities for our region and Australia by investing in areas such as transport, energy and water infrastructure, ports, logistics, environmental protection and information and communications technology, as well as agriculture. Mr Deputy Speaker, you know just how important agriculture is to my electorate of the Riverina. ChAFTA is going to open up trade opportunities for the Riverina that we could only dream of not that long ago.

Australia's prosperity and economic growth is tied closely to Asia—the member for Sydney acknowledged that—and a stronger Asian region underpins a stronger Australian economy. It is a win-win for everyone. That is why the Australian government is investing in this bank, having followed due process before signing on: because we are committed to reaching out to all corners of the globe to stimulate economic activity and growth right here at home.

The bill, once enacted, will provide an appropriation for the payment of Australia's financial investment in the Asian Infrastructure Investment Bank. Australia's initial shareholding will be about US$3.7 billion. This includes US$738 million in paid-in capital over five years and US$2.9 billion in callable capital, which is a contingent liability against the Commonwealth. Australia will be the sixth-largest shareholder. Australia's contribution will have zero direct impact on the underlying cash balance, fiscal balance and net debt, as we are purchasing a shareholding in the bank. That is important.

The bill will also authorise the Treasurer to issue promissory notes to the bank to discharge Australia's financial obligations. Again, that is very important. Additionally, this bill will enable regulations to be made to extend necessary privileges and immunities to the bank and its staff, and experts and consultants performing services for the bank.

The bank will initially have US$100 billion of total authorised capital and is expected to start operating by the end of 2015. This US$100 billion will be used to help address the Asia-Pacific region's acute infrastructure needs, which are estimated to reach US$8 trillion this decade. That is a significant sum. Australia will benefit from improved infrastructure throughout the Asian region, which should provide greater opportunities for Australian businesses through increased demand for our services and our exports, amongst which are our agricultural products—for example, Australia's exports will be able to reach new markets and expand existing markets through investment in new ports, roads and railways in member countries.

Additionally, Australian businesses will be able to sell services, including finance, engineering, building and construction and consultancy, to these new markets. Talking of new markets, I congratulate the New South Wales Premier Mike Baird on what he is doing to open up new markets. The New South Wales and federal coalition governments are doing everything we can to make sure that we open up new markets and keep them. Australian companies can also directly benefit by tendering to deliver these projects through the bank's open procurement model.

Another positive feature of the bank is that it will provide this infrastructure by bringing together private sector investment and co-financing projects with other development banks and private sector financiers. As the sixth-largest shareholder of the bank, Australia will be able to influence the bank's decisions and strategic direction. Australia will continue to work with China and other members to establish a bank that is effective, accountable and transparent. We will be asking the bank to complement the work of the World Bank and the Asian Development Bank.

I went to the Asian Development Bank's 48th board of governors meeting in Baku, Azerbaijan from 2 to 5 May this year.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I remember.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I am glad you remember that. No doubt you followed me very closely and the good work that I did on behalf of the government—and the good work the government is doing in conjunction with the Asian Development Bank right throughout the Pacific region.

I made a number of points to that forum in Baku. I told them that the development of the Asia-Pacific region is fundamentally important to Australia. The ADB's priorities closely align with our own, and I am sure that the AIIB's priorities will align with Australia's. The ADB is there to help reduce poverty in Asia and in the Pacific through economic growth and private sector development, just as the Asian Infrastructure Investment Bank, when formed, will be. The ADB has shown itself capable of comprehensive structural reform in the face of changing economic circumstances, and falling commodity prices and the slump in iron ore prices were a feature of discussions in Baku. This commitment will ensure that the ADB remains at the centre of international development in the future, along with the Asian Infrastructure Investment Bank.

The merger of the Asian Development Fund's loan assets and operations with the ordinary capital resources is just one example of the ADB's commitment to addressing long-term financial challenges and its financing challenges. The merger is an innovative way to enhance the ADB's capabilities while recognising the fiscal constraints of many donors. That is an issue that has to be considered. It is also in line with the call by G20 countries for multilateral development institutions to use their balance sheets more effectively. Australia strongly commends and continues to support that particular initiative. We are also encouraged as a government by the broad support the initiative has received from ADB member countries.

At last year's ADB annual meeting in Kazakhstan, Australia shared our ambitions at the time for our G20 presidency. When I was in Baku, and when I represented Australia at the G20 in Istanbul, Turkey, from 8 to 11 February this year, I felt very proud of the high esteem in which our Treasurer, the member for North Sydney, is held within world financial circles.

Opposition members: Hear, hear!

'Hear, hear!' I hear from the other side. And he is. We have continued that fine tradition of Australian treasurers—there you go; I am giving both sides of the House a compliment now—of standing tall in world financial terms.

The G20 have agreed to a range of initiatives which will deliver benefits globally, particularly to the rapidly expanding economies of the Asia-Pacific, thanks largely to Joe Hockey's initiatives when Australia was G20 president. Importantly, Turkey as the current G20 president has committed to follow through on the initiatives that the member for North Sydney put forward. The Brisbane Action Plan of November 2014 finalised the ambitious goal of lifting the G20's collective gross domestic product by more than two per cent above the business-as-usual scenario, and that is expected to have significant flow-on effects for global growth in all countries, delivering more jobs—there is that word again, that very important word—and higher incomes, and a better quality of life all over the world.

Our G20 presidency focused particularly on infrastructure development, something that is obviously of critical importance to the Asian Infrastructure Investment Bank, and we supported a range of initiatives to assist in the establishment and successful completion of infrastructure projects globally. One of the very important aspects of our G20 presidency was the establishment of the Global Infrastructure Hub in Sydney to help facilitate knowledge and information sharing between governments and the private sector in order to improve processes for the establishment and successful delivery of infrastructure projects which is so very important.

I am pleased that, this Thursday, I will be catching up with New Zealand politician David Bennett, the member for Hamilton East since 2005; former chair of the New Zealand parliament's Transport and Industrial Relations Committee and chair of the New Zealand parliament's Finance and Expenditure Committee. Mr Bennett is coming to Australia and he is going to be catching up with the National Party. He is a National Party person. It is great that we can share many of those infrastructure goals, those finance goals, and help boost both countries' objectives across the Tasman. Certainly, I will be reaching out to David Bennett when I meet up with him again on Thursday—tomorrow, in fact. I am looking forward to that.

Dr Leigh interjecting—

Indeed they do. The AIIB will drive economic growth and jobs in our region by delivering much-needed infrastructure. I know it is important for Australia and it is important for the Pacific Rim. It will provide great opportunities for Australian trade and businesses. It has received glowing endorsements from people such as the Chair of Industry Super Australia, Peter Collins; the Chief Executive of the Business Council of Australia, Jennifer Westacott; and the Chief Executive of the Australian Industry Group, Innes Willox. It has received support from industry and, certainly, from businesses. It is going to make a whole world—excuse the pun—of difference to the Asian region by building the sort of infrastructure and the sort of confidence that is desperately needed in the Pacific rim. It complements the work of the Asian Development Bank, which has been around since 1966. The ADB, because of its origins, is largely Japanese run. The nine presidents of the ADB have all been Japanese.

Now that the Asian Infrastructure Investment Bank is bedding down the governance and transparency issues that are so important to its establishment, Australia very much looks forward to being part of the overall framework and part of the establishment of this very necessary organisation.

I am glad that Labor is on board with this, and it has been supportive from the outset. I appreciate the remarks made by the previous speaker, the member for Sydney. I am sure the member for Fraser is going to have more to say about Labor's support for this bill. I commend this important bill to the House.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

As the previous speaker, the member for Riverina, noted, Labor will be supporting the Asian Infrastructure Investment Bank Bill 2015. On 29 June 2015, the government signed the Asian Infrastructure Investment Bank's articles of agreement in Beijing. That put us alongside 56 other founding-member countries. Fifty countries have formally signed the bank's charter. At the time of that signing ceremony, seven more were waiting for domestic approval before signing. The Asian Infrastructure Investment Bank will launch with capital of $100 billion, three-quarters of which will come from Asia.

Nobody doubts the need for investment in infrastructure in the Asian region. A study by the Asian Development Bank in 2009 estimated that Asia's infrastructure needs amounted to $8 trillion between 2010 and 2020, of which 68 per cent would be for new capacity. Fifty-one per cent of the spending would be for electricity, 29 per cent for roads and 13 per cent for telecommunications.

The terrific growth that the Asian region has seen, with the movement of hundreds of millions of people from poverty into the middle class, is one of the great developments of my lifetime and has brought with it a demand for high-speed railways, quality broadband, good roads, ports and airports. All of these things will potentially be funded through the Asian Infrastructure Investment Bank.

China will have a voting share of 26 per cent, contributing around $30 billion of the bank's launch capital of $100 billion. Australia is making an initial contribution of $930 million, but I understand that the anticipated contribution is US$3.7 billion, making us the sixth largest shareholder, behind India, Russia, China, Germany and South Korea.

The Asian Infrastructure Investment Bank has been opposed by the United States from the outset. The political dimension is worth exploring in considering the need for the bank. As TheEconomist magazine noted in an article on 21 March: there are three reasons why the United States should have been more receptive to the Asian Infrastructure Investment Bank. The first is the need for infrastructure, to which I have already referred. The second is that those countries who have concerns about Chinese lending standards should join the bank and improve it from the inside. Third is the suggestion that existing institutions ought to be reformed has been made impossible by the fact that the United States congress has stymied the very modest reforms of the IMF.

I spoke on the IMF reforms when they came before the House a number of years ago and was struck at that time by the degree of bipartisan commitment to the IMF reforms. I noted the irony that bipartisan support was going to IMF reforms which would see Australia increase our contribution and decrease our voting share. We voted for the IMF reforms, however, because they recognised the shifts in the global weight of China, in particular. But while the G20 in 2010 agreed to reform IMF quotas to transfer six per cent of voting power to emerging market economies, those reforms need the approval of all countries. The United States is the country which is failing to support these reforms, despite support from the Obama administration. In that context, it is reasonable to understand that the Asian region's investment needs might well be met by the Asian Infrastructure Investment Bank.

When the proposal was announced, on 24 October 2014, the Prime Minister said:

What we are not prepared to do is to sign onto something which is just an arm of one country's foreign policy.

That stood in contrast with Labor's initial response to the Asian Infrastructure Investment Bank. The opposition leader, Bill Shorten, said on 23 November 2014:

We understand that if China wants to build multilateral trade institutions and financial institutions, Labor says in principle; this is a good thing. We had this crazy situation where the Abbott Government treated the Asian investment bank, the infrastructure investment bank, as a security issue and all the reports showed they got their National Security Committee to reject the Asian Infrastructure Investment Bank.

It took until the 29 March 2015 before the coalition finally announced that Australia would sign the MOU for the Asian Infrastructure Investment Bank. In so doing, we found ourselves playing catch-up. Australia joined the Asian Infrastructure Investment Bank behind South Korea, behind India and behind Singapore. But we also committed to the Asian Infrastructure Investment Bank after New Zealand, after Germany, after France, after Italy and after Britain. Indeed, it was probably only the British government signing onto the Asian Infrastructure Investment Bank that led Australia to be embarrassed into signing.

The issue was raised in the coalition party room, reportedly. Phil Coorey, in an article in the Australian Financial Review in November 2014, noted that the Prime Minister had been taken to task over his early statements suggesting that joining the Asian Infrastructure Investment Bank would be a mistake. The split within the government was reportedly between the Treasurer and the trade minister, who favoured joining, and the Prime Minister and the foreign minister, who were holding out against joining.

As the Lowy Interpreter article by Philippa Brant noted:

It is revealing that the second debate was conducted in cabinet's NBC, where strategic rather than financial arguments became paramount. Ms Bishop provided scenarios of how China could convert financial power via investment loans into direct military advantage in vulnerable nations close to Australia.

That perspective reflects zero sum thinking. It reflects a sense that the Asian Infrastructure Investment Bank proposal was something which would force us to loosen our ties with the Asian Development Bank and with the World Bank. That is not the case. Singapore, very much in a strategic position similar to Australia, recognised that we did not need to see this as zero sum game. As Philippa Brant noted at the end of her article:

By seeing the AIIB as purely 'an instrument of China's national interest' (and therefore not in our national interest) Australia has lost a valuable opportunity to participate alongside other Asian nations and influence the direction China's financial engagement. And the strong overtures from US representatives feeds the Chinese perception that Australia doesn't make independent foreign policy decisions, making it harder to convince China that we're not just America's 'lapdog' when it comes to China's role in the region.

Geoff Raby, writing in the Financial Review on 12 April 2015. said:

By delaying for so long before joining the infrastructure bank, Australian forfeited much of the advantage of membership, while perplexing China and still annoying the US.

He points out that we joined at the tail end of a queue of Europeans, behind Luxembourg and just ahead of Norway—neither of them prominent actors in Asia Pacific affairs. Geoff Raby points out this is not simply a coalition Labor difference. He notes that, in the past, Australia, under a Labor government, was central to securing the Cambodian peace agreement and that under the Howard government Australia created the regional process on people-smuggling and stood firm against US based IMF conditionality for financial rescue packages for Indonesia and Thailand, following the 1997 Asian financial crisis. Those independent foreign policy stances ultimately served Australia well. Geoff Raby describes fears that the AIIB will be an instrument of China's domination in the region as those that:

… verge on the hysterical.

He argues that Australia ought to return:

… to our past traditions of regional active diplomacy …

And that:

… using our policy creativity will enhance our security.

The decision that has been made by the government is ultimately the right one. As Churchill once said of the United States, 'She can always be relied on to do the right thing once she has exhausted all the other alternatives.' I am not sure that we can say that the Abbott government can always be relied on to do the right thing, but in this case it certainly did attempt to exhaust all the other alternatives before signing on. Had the government recognised that this was an economic issue, rather than using zero sum national security considerations, we would have had a more powerful role in influencing the shape of the Asian Infrastructure Investment Bank.

The bank's governance arrangements will now see a board of governors, with each of the 57 founding members having a seat on the board. The board will meet at least once a year. It will have a board of directors, nine of which will be members from Asia and three of which can come from outside the region. Members have been asked to form constituencies to elect those directors.

I do hope that Australia is able to play a significant leadership role on the board of directors, because infrastructure investment within the Asia-Pacific region is vital not only in helping to alleviate poverty and improve income growth in the region but also because of the benefits that it brings for trade and national security. A growing, prosperous Asia-Pacific is in the globe's interests and it is in Australia's national interests. I commend the bill to the House and simply wish that the government had acted with more alacrity on this important issue.

Andrew Broad (Mallee, National Party) Share this | Link to this | Hansard source

This is a topic that interests the people who live in the electorate of Mallee, because we understand the value of infrastructure and we understand the value of trade. It was very interesting to hear the previous speaker talk extensively about how the opposition stand by this decision and, in fact, lament that they think we took a little long to get there. That particularly contrasts the discussion after question time, where there was so much rhetoric about the China-Australia Free Trade Agreement. We are demonstrating to the Australian people that we believe in trade, as opposed to the Labor Party which are obviously against trade.

If you think about the products that are produced in my electorate, they provide a very interesting case study for this. In a good year, we produce $5.3 billion in exports out of the electorate of Mallee. If you went to Mildura, you would be shocked to see trains two kilometres long that are full of shipping containers full of horticultural products that are going straight into Asia. We have infrastructure constraints ourselves. It was very pleasing to see the announcement of the Murray Basin rail link infrastructure to take product from Mildura to the port. Of course, from there the product has to travel by boat and go through the South China Sea. That is an issue of defence; everything that goes through the South China Sea needs to go through safe waters. Then it needs to get to the port of the country that is receiving it.

What we have seen, particularly with the growing wealth in Asia, is that that wealth is now filtering its way out away from the capital cities in Asia. You might go to Jakarta. Traditionally, most of the wealth in Indonesia has been in Jakarta. With the rise of Indonesia, we see that wealth is filtering its way out. You might go to Shanghai, but we are also seeing that, as the inland cities of China develop, the infrastructure constraints to get the product that we produce in Australia to the consumer are a challenge. We also know that as standards of income increase so do the demands on food products. Deputy Speaker Broadbent, you will know that once a person goes from earning $2 a day to $5 a day their demand for protein in their diet substantially increases, their capacity to afford that increases, their standard of living and health increases, and child mortality decreases. So the infrastructure constraints that we find ourselves in in the Asia-Pacific region are our great challenge.

Australia's does sit within Asia. This is our great advantage. I was in Washington a number of weeks ago. I said to some of the American congressmen there that Australia sits in Asia. It had not actually dawned on them that Australia sits in Asia. That is a bit of a worry. It is probably no surprise that they have been a little bit reluctant to sign on to this, because they do not quite have the understanding of Asia that the Australian government and the Australian people have. If you think about the constraints in taking our product from the port inland into the Asian nations, they are going to need finance. This is what this legislation is all about. It is about providing finance to build the infrastructure so that the wealth that hits the port, the food that hits the port and the product that hits the port can make their way through to the general population.

I was in Jakarta last year. Indonesia has 250 million people and a rising economy, but there are still 100 million people who are living on $2 a day or less. I went out to Bandar Lampung and had a look at some of the feedlots there. I have to put on the record: having seen the feedlots in Indonesia, we should be very proud of Australia's contribution to lifting animal welfare and lifting live exports. The trucks that are transporting those live cattle have to travel down roads would normally take us two hours to travel in Australia, but it is taking the trucks eight hours simply because of the sheer lack of infrastructure in that city. For example, Jakarta is a parking lot after 5 o'clock rather than a town that you can get around. There is no real public transport. So access to finance through the Asian Infrastructure Investment Bank will allow the governments and the builders in those areas to build infrastructure, which will go a long way towards addressing opportunities for us to get our product from the Mallee all the way to where the customer wants to take those products.

This also has a humanitarian bent to it because there is no doubt that, if you can get commerce into areas, you can also get medicine into areas. I will give an example. A number of weeks ago I was in Port Moresby, Papua New Guinea. I travelled only four miles but, because of the state of the road, four miles was too far for children to be able to access education, four miles was a challenge for them to access medicines. Whilst this is part of commerce—and we can see this very much from the shallow perspective of how we ensure that we can get our products into the marketplace and to more customers and address the infrastructure constraints in Asia—this is also about being a good neighbour and also humanitarian needs. In opening up those roads, in opening up that infrastructure, you allow better access to medicines, you allow better access to doctors and you allow better access for more serious health cases to come down to the major hospitals in the capital cities. It really is about standing by the Asian countries as they seek to lift their standards of living through their hard work.

The Asian Infrastructure Investment Bank is, relatively speaking, a small cost to the Australian budget over a number of years. It will add up to roughly $932 million over a five-year period. That would make us the sixth largest shareholder and it would afford us the opportunity to tender for some of the projects that will need to be built. With the rise of Asia, there are great opportunities in protein products, mechanised starch products and counter-seasonal horticultural products. There are also great opportunities in the service industry—and that is something I think we have not captured enough. It has huge potential to create more jobs for Australians. So being a good neighbour ultimately translates into jobs.

I will take this opportunity to touch on the China-Australia Free Trade Agreement. It has been very popular in my electorate. We have heard a lot of rhetoric in this place that, somehow, people are going to be undercut in the wage market. But on Sunday, at the Robinvale Almond Festival, I was talking to people who were table grape growers. They cannot believe the opportunities and optimism that are out there simply because we have stitched up the Japan free trade agreement, the Korea free trade agreement and now, hopefully, the China free trade agreement. They want us to get it up and going quickly. If you talk to them, they say this is generating jobs—low-skill jobs and high-skill jobs—in areas where there has traditionally been high unemployment. And now it is getting to the point where it is about finding the people.

That is the interesting part about this. We on this side understand that growing the whole economy, growing the whole marketplace, ultimately grows opportunities for Australia. I think Australians get that and know it. Certainly, people in my electorate get that. They are probably shaking their heads at the moment over the Labor Party's discussions in this place about free trade agreements. Surely, we have learnt that lesson now; surely we have come to a point where we know that we are in Asia, that we have opportunities in Asia. We have infrastructure constraints that we want to address through the Asian Infrastructure Investment Bank, but we want free trade agreements with Asia because we know that the world has moved on from the protectionist and xenophobic views that the Labor Party are trying to put into this discussion. People are saying: 'Get on with it. Sign the free trade agreement and capitalise on the opportunities. Get our products from where they are grown down to the railway, on to the port, through the South China Sea and into the marketplaces in those developing countries and develop that infrastructure.' I am glad that the Asian Infrastructure Investment Bank is welcomed by both sides of the parliament, but I just cannot believe that the Labor Party is choosing to play politics on trade opportunities with our biggest partner. On that note, I commend the bill to the House.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Like other speakers before me, I am delighted to have the opportunity to speak about the Asian Infrastructure Investment Bank Bill 2015. I am really pleased to support this bill. I am proud to support the bill.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Excellent, sit down then!

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

It provides the legislative basis for Australia's membership of the Asian Infrastructure Investment Bank. The member opposite suggests that I sit down now, having made that point. Even if I did sit down now, my speech would be of a higher standard than the one I have just had to listen to! As my friend the member for Mallee leaves the chamber, I remind him that, while it is great that the government now supports the AIIB, they did not support it for a long time, when we did. We were first on the cart for this; they were dragged, kicking and screaming, onto the cart. That is great, and welcome to the party—better late than never—but let us dispense immediately with the absurd notion that those opposite have always been supporters of this great initiative. But we have been. It is a credit to the Leader of the Opposition, it is a credit to the shadow minister for foreign affairs, it is a credit to the shadow Treasurer and it is a credit to our frontbench, who have supported this arrangement since day one. We are proud to have done so, proud to vote for it and proud to speak in favour of it today.

Probably the greatest economic phenomenon of our lifetime is the middle-classing of Asia. Members on both sides have mentioned it. We on this side have always recognised the growing importance of Asia to our economy and our culture—all the way back to Whitlam and his engagement with China, to the way Hawke and Keating opened up our economy and more recently, in the Rudd-Gillard period, to the production of that really high-quality strategic document Australia in the Asian Century. In another role in this place, I was proud to have the opportunity to contribute to that document. It was disappointing, though not entirely surprising, that when the new government came into office they removed that white paper from all the government websites. I thought that was—to be fair—a pretty petulant sort of act. If they had taken the time to go through the thing, they would have seen that there was an opportunity for them. If they had wanted to build on it or update it, great, but it was a pretty petulant act to just delete the Australia in the Asian century white paper and pretend that anything that had been produced by the former government was not worthy of their consideration.

If they had read it and if they had kept it, they would have come across some pretty stunning statistics. For example, in two decades, the Asian middle class more than doubled, from 21 per cent of the global population in 1990 to 56 per cent 20 years later. The OECD estimates that the Asian middle class will make up two-thirds of the global middle class by 2030. In just four years, from 2005 to 2008, the number of people below the poverty line fell from 903 million to 754 million. Just one more statistic: in dollar terms, just 15 per cent of the world's GDP fell within 10,000 kilometres of Australian shores. It has doubled today and is expected to double again to 60 per cent by 2030 with the continuing expansion of China and India in particular. So never before has Asia's regional economy been more important for our own domestic economy's future.

It is self-evident that with this growing middle class and growing wealth comes a growing need for infrastructure, both basic infrastructure and advanced infrastructure, throughout our region. The Asian Development Bank, another institution, has estimated that about 1.8 billion people are not connected to basic sanitation services at the moment; 800 million people do not have electricity; and 600 million do not have access to safe water. It is not only these basic facilities; there is also a need for more roads, railways and telecommunications infrastructure to bolster economic growth so that that growth is self-sustaining and self-perpetuating because it has the right infrastructure foundations. That is so that countries in our region—developing countries in particular but all the countries—can have the productivity growth that they need and the economic growth that they need to provide for their citizens. At the same time, there needs to be investment in the policies, regulations, systems and institutions that enable the infrastructure to be rolled out and used effectively.

All up, the Asian Development Bank has estimated that there is a need for investment in the order of $8 trillion before 2020. It is expected that Asia will make up 60 per cent of total global infrastructure investment over the next decade.

Here is a bit of history and a bit of context when it comes to the Asian Infrastructure Investment Bank, which was proposed by Chinese President Xi Jinping and Premier Li Keqiang in 2013 to address some of these funding shortfalls. The idea of the bank is to promote interconnectivity and economic integration in the region and to cooperate with existing multilateral development banks. The bank will focus on the development of infrastructure in Asia, of course, including energy and power, transportation, telecommunications, water supply, sanitation and urban development. After a year of negotiations, representatives of 57 countries gathered in Beijing on 29 June this year to formally sign the articles of agreement of the bank. Now that that is done, the bank is expected to start with a capital base of US$100 billion. That is considerable when you compare it to the Asian Development Bank, which has around $153 billion in capital, and the World Bank, which has about US$223 billion in capital.

Australia, as honourable members will understand, having read the background to this bill, will contribute about $930 million to the AIIB over five years. That makes us the sixth-biggest capital shareholder, so as a consequence of that we get the sixth-biggest block of voting rights. Ahead of us are only China, India, Russia, Germany and South Korea. I think it is something to be proud of that a country of our size can be the sixth-biggest contributor. I think that it speaks volumes about our capacity to participate in the region that we are prepared to kick in something of that magnitude. It is pleasing to see that we get in return a substantial amount of influence over the institution itself.

A lot of thought has gone into the design of the bank. The three principles are that it be lean, clean and green: lean in the sense that it will only have a small, efficient management team and highly skilled staff; clean in that it will be an ethical organisation with zero tolerance for corruption; and green in that it will be built on a foundation of respect for environmental considerations. On its own, the bank does not have the capacity to bridge Asia's infrastructure funding gap, when you think about some of those enormous numbers I mentioned before, but it really is an important part of the story. It will make a crucial contribution to building infrastructure in our region.

There are huge benefits for Australia. If you want to be transactional about it, there are huge benefits for us from greater investment in Asian infrastructure. We get that seat at the table that I mentioned already when it comes to these important infrastructure investment decisions. It makes us more than just a bystander to the economic development of Asia. It is crucially in our national interest to be part of that conversation. We also get to help shape the bank. We get to build even better connections with our regional partners. And, importantly for our private sector, for our companies, they will get the chance to compete for work in industries all across Asia as a consequence. This could mean huge opportunities—big opportunities for industries like mining and construction and for services sectors in Australia.

It is also very good economic diplomacy for Australia in our region. I agree with the member for Mallee in what he said about Australians understanding how important it is that we engage with the region. If you just take a couple of examples, the Lowy poll is the authoritative poll about Australians' attitudes to the world—I congratulate the team at Lowy for the work they do—and in the 2015 poll, released a couple of months ago, 77 per cent of Australians said that China was more of an economic partner than a military threat. That is a very important consideration. And more and more Australians see greater economic engagement with China as being in our country's interest.

That is why I believe in a high-quality China FTA. That is why I want to see the best possible China FTA. I want to see one that maximises Australian jobs and minimises the risks of exploitation. I will not be lectured by the other members about our relationship with China. Labor is the party of engagement with China and engagement with Asia. That is why we want to see a really good China-Australia Free Trade Agreement. We want to make sure that when it comes to creating Australian jobs we are doing all we can to maximise the opportunities for Australians and minimise the exploitation of Australian workers—after all, the whole point of an FTA is to create Australian jobs. Those opposite who chirp away with their usual talking points, which have probably been leaked out of their cabinet or leaked by someone on that side of the House, can bang on all they like, but I think the Australian people appreciate there is at least one side of the House that wants to maximise Australian jobs out of these agreements and minimise exploitation of Australian workers. There is no bigger believer in free trade in this parliament than me, there is no big believer in engagement with China and Asia than me, and I am proud to say that we do want a China FTA and we want a good one. We want one that does not dud Australian workers.

We welcome the government's support for the Asian Infrastructure Investment Bank—better late than never when it comes to this particular issue. That is why Labor has been so keen to support Australia's engagement with the bank since the idea was first floated. That is why for a month Labor called on the government to join the Asian Infrastructure Investment Bank, and the government engaged in their usual internal fights and cabinet bickering about the issue. Extraordinarily, we had leaks out of the National Security Committee of the cabinet about the arguments over the bank. We had the foreign minister oppose it one day and support it the next. We saw all of this play out in the national media in the usual way and in full view of the rest of the world, which must have confused them when it came to understanding our position on this issue. That delay was costly, as my colleague the member for Fraser was right to point out earlier when he was quoting former ambassador Geoff Raby. He talked about the costly nature of that internal confusion and that internal bickering as other countries jumped the queue on us, got to the table before us and were able to have a greater influence on the process. Infighting is not unheard of on that side of the House; it is a characteristic of this government. This cabinet has largely ceased to function as an effective institution in this country, so it is not surprising that the infighting was costly for Australia.

Government members interjecting—

Mr Deputy Speaker, they can laugh all they want. The only item on the cabinet agenda the other day was a line that said, 'When this cabinet leaks, say that it is performing "exceptionally well".' The only item on the cabinet agenda was a talking point to say that cabinet is working well. Do not tell us that cabinet is working well; actually make the cabinet work well.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

How do we know that?

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

The only reason we know that, as the member for Gorton points out, is that it was immediately leaked. Somebody in the cabinet, somebody on the frontbench over there—given both of those opposite are unlikely to ever reach the cabinet, they should listen—immediately leaked the instruction to say that cabinet is working effectively, so spare me this rubbish.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Let me remind members that the bill is the Asian Infrastructure Investment Bank Bill 2015.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. I am speaking about the costliness of the delay as the National Security Committee bickered over whether or not to support the thing that Labor supported all along—that is what makes it crucial to this conversation.

Mr O'Dowd interjecting—

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The member for Flynn will stop enjoying himself.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

The member for Flynn always enjoys himself. Many of our friends like the UK, New Zealand, South Korea, Germany, France, Italy, India and Singapore backed the bank months before this government resolved their own internal conflicts on it—that is a fact. Labor thinks that Australia needs to embrace a vision that extends well into the future and we need to solidify our place in the Asia-Pacific regional economy. That is what this bill is about.

Labor will support the legislation before the House today. We welcome those opposite in their late conversion. We supported it long before the government did. We support committing $930 million to the AIIB. We see our nation crucially as a part of Asia into the future and this will be aided by our involvement in the Asian Infrastructure Investment Bank.

Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Link to this | Hansard source

I am very pleased to rise to speak on the Asian Infrastructure Investment Bank Bill 2015, an important bill which will enable Australia to become a founding member of the Asian Infrastructure Investment Bank. In the time available to me this evening I would like to focus on three key issues. Firstly, I want to make the point that infrastructure is a priority for governments of every nation. Secondly, I want to speak about some of the challenges involved in financing infrastructure. Thirdly, I want to speak to the way in which the establishment of the Asian Infrastructure Investment Bank will help to address some of these issues facing nations across the Asian region.

Let me turn first to the proposition that infrastructure is a key priority for governments in every country. It is certainly a key priority for the Abbott government here in Australia. For example, the Abbot government has made a $50 billion commitment to improving Australia's road and rail network. That commitment involves a range of projects all across the country with new roads in most Australian states and territories, bridge upgrades, and a new freight rail link in Western Australia. Major work has commenced on the $3 billion NorthConnex project, which is expected to create 8,700 jobs for New South Wales—the second missing link to be started by this government after the M5 West widening. Early works on WestConnex also commenced this year, a project which is expected to deliver $20 billion in economic benefits and create around 10,000 jobs. We have also seen planning for the Western Sydney airport at Badgerys Creek commencing, and that reflects and follows a decision made by this government after the important issue of Sydney's second airport was kicked down the road by a succession of governments.

The Abbott government has established the $5 billion Northern Australia Infrastructure Facility that will be available for major infrastructure projects like ports, railways, pipelines and electricity generation. In addition to our plans announced to invest in Australia's north, the government has other programs to develop regional Australia, including through the $1 billion National Stronger Regions Fund. The Asset Recycling Initiative is freeing up states to invest in a range of productive infrastructure. Two agreements have been signed so far—with the governments of New South Wales and the Australian Capital Territory—and these are expected to generate more than $15 billion of additional infrastructure activity. There are a range of infrastructure priorities for the Australian government, as there are for governments throughout our region.

Another important infrastructure priority is the National Broadband Network, which is being delivered by the Abbott government more quickly and at less cost to taxpayers than the Rudd-Gillard-Rudd government. Since September 2013 the NBN has more than tripled the number of homes and businesses that can receive a service. As at the election date, the NBN was available to some 275,000 premises. By September 2016 it is expected that the NBN will have passed or construction will have commenced in a very substantial number of areas. We are already at over one million premises which are now able to connect to the NBN fixed line network.

These points illustrate the policy importance of infrastructure here in Australia and the policy importance of infrastructure in countries around the world and certainly throughout Asia. It is worth reflecting for a moment on why infrastructure is so important. There is a clear connection between the quality of a nation's infrastructure and the economic and productivity spin-offs from that infrastructure. Indeed, the link between infrastructure and productivity has been very well studied within economic literature and is very well understood.

One of the classic examples which is often quoted is the investment made by the US government in the interstate freeway system in the 1950s. That was justified at the time on the grounds of responding to defence and national security challenges, but it had an enormous economic benefit. The productivity spin-off was very substantial. For example, it reduced delivery times and increased the geographic area within which any one company could effectively supply customers, in turn increasing the intensity of competition and increasing the efficiency with which companies in the economy supplied their customers.

The same economic logic applies to the infrastructure of many times. That is why it is a policy priority for the Abbott government, as it is for governments in many countries, to support the construction of infrastructure as a means of, in turn, supporting economic growth, creating jobs and assisting businesses to link with their customers and to supply markets around the country and, in turn, internationally.

As well as the economic justification for infrastructure, there are also very important equity and quality-of-life justifications for investment in infrastructure. The US economist John Kenneth Galbraith—he was, in fact, born in Canada but carried out most of his career in the US—in the 1950s coined the term 'private affluence, public squalor' to convey the idea of a rich society which underinvests in its public infrastructure. He was the ambassador to India in the 1950s in the Kennedy administration. He was notorious for sending long memos full of advice to President John F. Kennedy. There is some suspicion that many of those memos went unread. But I will return to the essential subject of the remarks I want to make this evening. He was responsible for coming up with the notion of 'private affluence, public squalor' to convey the idea of a rich society which underinvests in its public infrastructure. The point that Galbraith was making was that this harms social cohesion and results in a society which fails to meet its full potential.

If congested roads mean you face a longer travel time to work, you are wasting time sitting in traffic rather than being with your family or pursuing other activities meaningful to you. Certainly that wasted time has a substantial economic cost—particularly when multiplied by the millions of people in the same position—but it has a very real social cost as well. One of the most important things governments can do to improve the quality of life of the people they serve is deliver or facilitate the delivery of good, quality infrastructure.

That brings me to my second point, which is the challenge of financing infrastructure. Asia is estimated to face an infrastructure financing gap of some $8 trillion over the current decade—an enormous challenge and one which the Asian Infrastructure Investment Bank, which is the subject of the bill before the House this evening, is designed to help address. Similarly, here in Australia there is a strong need for infrastructure financing. As I have mentioned, the Abbott government is working to address that need with our $50 billion infrastructure package.

There are a number of factors which underpin the challenge of financing infrastructure. First, infrastructure is by its very nature capital-intensive. It is very, very expensive. The benefits are realised over many decades but the costs are incurred over a few years. This creates a challenge. In Australia we have the further complexity that it tends to be state governments which are responsible for most infrastructure, and state governments often face fiscal challenges. They have only a limited capacity to raise their own revenue and much of what they spend is dependent upon transfers from the federal government. They also face ever-growing claims on expenditure.

There are a number of levers that a government, at least conceptually, can pull when looking at funding infrastructure. Options include: increasing public debt; increasing taxes; requiring a 'user pays' approach—for example, tolls to fund roads; and selling poorly performing public assets to the private sector where they might be run more efficiently and, in turn, using those proceeds to fund other infrastructure. This latter approach and certainly the notion of asset recycling has very much come to the fore in Australia in recent years. The Premier of New South Wales, Mike Baird, and the federal Treasurer, the member for North Sydney, have been strong advocates of this approach. It is certainly delivering some significant returns and benefits.

It is fair to say that, over the years, some progress has been made in Australia towards having the private sector take on more of the infrastructure task. Private sector investment in infrastructure has risen as a proportion of GDP. This is in part due to privatisation over a number of decades, in part due to the competition reform process which commenced in the 1990s and in part due to the growth of privately funded infrastructure associated with the resources boom, such as railways.

A particular public policy challenge in Australia when it comes to financing infrastructure is how we might better tap into the superannuation savings pool. As many have observed, the characteristics of returns on economic infrastructure projects—long-term, stable returns at reasonable rather than spectacular rates—are in many ways attractive to those saving to provide for their retirement. Nevertheless, the proportion of the Australian superannuation savings pool which is invested in infrastructure is quite low. One of the paradoxes is that it tends to be pension funds and superannuation funds from other markets which are more prominent investors in infrastructure in Australia than Australian based superannuation funds.

Yale University economics professor Robert Shiller has written extensively about the social value of economic and financial innovation. For example, he argues that there should be a market in futures contracts tied to an index of house prices, as this would allow people who did not own a house to hedge against the risk of house prices jumping sharply, locking them out of the market. More broadly, he has argued about the social benefits of financial innovation. In my view those arguments carry weight when it comes to the question of how best infrastructure ought to be financed. The public policy pay-off from financial innovation in the financing of infrastructure could be very significant.

I turn to the specific nature of the measures in the bill before the House this evening, which is to authorise the participation by Australia in the Asian Infrastructure Investment Bank. I would make the case that when we take a perspective across Asia, there is certainly a need for greater financial innovation in the area of financing infrastructure. I think the Asian Infrastructure Investment Bank is a good example of precisely the kind of innovation which ought to be encouraged. It is of course proposed to be a multilateral development bank and is expected to become operational from later this year. Australia will contribute some $932 million in capital over five years towards the expected authorised capital base of the Asian Infrastructure Investment Bank of US$100 billion.

The measures in this bill provide an appropriation for the payment of Australia's capital contribution to the Asian Infrastructure Investment Bank. Importantly, as the sixth largest shareholder, Australia will be well positioned to influence the bank's decisions and strategic direction. There is also a broader economic benefit in which our nation will share if there is to be improved infrastructure throughout the Asian region, which in turn will provide greater opportunities for Australian businesses and increase demand for our services and commodity exports.

New ports and railways in countries like India, Indonesia and Korea will mean that Australia's exports have new opportunities to reach new markets or expand existing markets. Australian firms will be well placed to benefit from infrastructure projects which are funded in whole or in part by the Asian Infrastructure Investment Bank. These projects could lead to work for Australian engineering businesses and construction management businesses and could lead to opportunities for Australian providers of finance, consultancy services and so on. The benefits of the Asian Infrastructure Investment Bank for Australian business look promising. The Asian Infrastructure Investment Bank also looks to be a promising vehicle to stimulate much-needed infrastructure across Asia, in turn stimulating economic growth and productivity in the nations of Asia. As a nation which is part of the Asian region, we clearly have an interest in greater prosperity throughout Asia and we therefore clearly have an interest in participating in the Asian Infrastructure Investment Bank as a policy tool designed to stimulate the achievement of that greater prosperity.

As I have argued, infrastructure is a key priority for governments in every country. Certainly here in Australia the Abbott government is delivering a number of major projects around the nation as part of a policy emphasis on stimulating improvements to our infrastructure. In the broader Asian region there is a very significant infrastructure financing task. The measures contained in the bill before the House this evening authorising Australia's participation in the Asian Infrastructure Investment Bank form part of the suite of policy responses which will help to meet the need for infrastructure in Asia to the benefit of the Asian region, to the benefit of countries in Asia and to the benefit of Australia.

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