Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

I am pleased to inform the Senate that Labor supports the Asian Infrastructure Investment Bank Bill 2015, and we will facilitate its passage through the Senate today. We support this bill because this bill facilitates Australia joining the Asian Infrastructure Investment Bank. Labor has 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, Ms Bishop, was arguing with the Treasurer, Mr Hockey, and while the former Prime Minister, Mr Abbott, 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 world 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 cabinet. On the other hand the Leader of the Opposition, Mr Shorten; the Deputy Leader of the Opposition and our shadow minister for foreign affairs, Ms Plibersek; and our shadow Treasurer, Mr Bowen, 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.

As I have said, Labor is supporting this bill and is facilitating its speedy passage through the Senate today. I note that we have already agreed to exempt this bill from the cut-off order to enable it to be considered in this sitting week. Further, we have facilitated debate immediately following the presentation of the report of the Senate Economics Legislation Committee inquiry into this bill. This report was completed following a public hearing with officials from Treasury and the Department of Foreign Affairs and Trade just last night. Senators will be forgiven if they have missed this hearing, but I assure everyone that it did occur. Senator Wong, the Leader of the Opposition in the Senate, was present as was Senator Edwards and Senator Dastyari.

The Senate Economics Legislation Committee inquiry received two submissions, one from Treasury and the Department of Foreign Affairs and Trade, and one from Stephen Howes and Robin Davies from the Development Policy Centre at the Australian National University. The public hearing provided an opportunity for senators to seek clarification on a number of matters from the government. These issues included matters relating to our membership; the governance of the bank and concerns raised by Australia; the Australian shareholding; accountability; the immunities and privileges that extend, as set out in section 8 of this bill; operational policies; and the ratification process. Questions remain about a number of these matters, particularly around some of the rhetoric that has been used in public debate on the bank by government ministers. Other issues requiring further amplification relate to the capital provided to the bank, how the board of directors will operate, Australia's constituency and whether any funds can be included as official development assistance in the future—these are all matters to watch.

In light of Labor's cooperative approach to this bill, I do seek an undertaking from the minister that demonstrates a similarly cooperative approach from the government. At the hearing last night, a number of matters were taken on notice. Whilst it was disappointing that questions could not be answered, including many simple questions seeking clarification of comments by, for example, the Minister for Trade and Investment that were already on the public record we understand that sometimes it is not always possible for the officials at the table to answer questions where they require an explanation from the minister concerned. The opposition seeks an undertaking from the minister, which I hope he will be able to give in his concluding remarks, that answers to questions taken on notice at last night's hearing will be provided in a fulsome and timely way.

The opposition could have opposed the exemption of this bill from the cut-off and sought to delay consideration of this bill until the Senate Economics Legislation Committee report had been fully considered and answers to questions on notice received, but that is not the approach we are taking. We support this bill and Australia's involvement in the Asian Infrastructure Investment Bank and want us to be able to take up our seat at the table as soon as possible.

I look forward to the minister being able to give a commitment to the Senate, today, that this additional material will be provided in accordance with the deadline set by the committee. Then all senators and the Australian people will be able to fully understand the nature of Australia's participation in the Asian Infrastructure Investment Bank and the attitude of the government to some of the issues that have been raised by its own ministers. Labor has proceeded in good faith in its approach to this bill and expects the same courtesy from the government.

It was interesting to see, in the second reading speech in the other place, the Treasurer boast: '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 representatives of 49 other countries.'

He was boasting that Australia was first. Mr Hockey 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. Instead, under this government, we are followers. We had to wait for other countries to join—then we decided to join. 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 and see what other countries, like the United Kingdom, did. I thought we had stopped letting the United Kingdom make Australian foreign-policy decisions about 70 years ago. We know this government is dysfunctional but its dysfunction impacts on policy. Here, we have 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 Australian 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 the opposition agrees 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 and I note that the second-biggest shareholding in the bank is India, 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 a very significant economy in the Asia-Pacific region.

We certainly support Australia's involvement and will facilitate, in every sense possible, Australia being as involved as 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 weeks, in this parliament and in public debate. There has been a lot of lecturing going on from those opposite about China and how we need to work better with China.

We are not going to take any lectures from a government that for months got this strategic decision on China so wrong. It is a government that could not make a simple decision to join the Asian Infrastructure Investment Bank. They have the gall to come in here, the Senate, and the other place and lecture the Labor Party about how to do business with China when you have the Leader of the Opposition, the Deputy Leader of the Opposition and the shadow Treasurer, on behalf of the Australian Labor Party, consistently saying—since last October—this is a no-brainer; this is an easy decision. If Labor were in government we would have signed up straightaway, because it is an opportunity to take. Those opposite need to understand the strategic error they have made—in waiting for other countries to show leadership and sending a signal to China that we do not care about their development.

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

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 invite other nations—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 realised the opportunities available, from joining the bank, rather than dithering for months and missing the opportunity to invest in infrastructure in the Asia 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 for 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 respected and 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 funds under management in Australia come from overseas. We could be doing so much better. Australia could be the financial services hub, but it would take complete engagement with the Asian economy to be so. It is not possible to reach that sort of engagement when the cabinet cannot even decide to join an important multilateral institution such as the Asian Infrastructure Investment Bank. This government is so dysfunctional that it spent months arguing about whether to take up a golden opportunity to participate in a new multilateral institution.

This is not to say that 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 has 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, as we did in the other place, but we take the opportunity to point out that these are opportunities 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, although Labor does recognise that he was not allowed to pursue and progress signing up to the Asian Infrastructure Investment Bank due to the conflicting attitudes of the Minister for Foreign Affairs and the former Prime Minister. The Treasurer was not able to deliver what he knew was in our best interest.

We have heard a lot of words about how we need to have better conditions and better governance. That is just an excuse—and 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 and 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 affairs 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. The government completely got it wrong.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Perhaps Senator Brown is aware of the history of this bank and why it took so long. The US government for a number of years lobbied very hard for a lot of people in the region, including us, not to sign onto this bank. Senator Brown is right when she says the UK was the first to break ranks and do so, and after that we saw a steady trickle of people signing on, including us.

I want to, firstly, raise the issue that infrastructure in this country is also very important. We believe that there is a significant pipeline of projects in Australia that should be financed, especially at a time of record low interest rates. One of the ex-leaders of the opposition, Professor Hewson, has been very outspoken, as has Saul Eslake, a fellow Tasmanian, on the one-off historic opportunity to finance infrastructure in Australia. I just want to get on the record that, when the consultation process around the national interest analysis was conducted on the Asian Infrastructure Investment Bank, you will see in attachment 1, the attachment on consultation:

Between 6 and 13 July 2015, Treasury sought views from state and territory governments on the AIIB Articles—

the AIIB being the Asian Infrastructure Investment Bank. It outlines in two pages that the various governments of New South Wales, Tasmania, Victoria and Western Australia welcomed potential investment from this bank in major infrastructure projects—for example, across New South Wales. So there was an expectation that perhaps this bank would be financing infrastructure projects in Australia, but if you read the report of the Joint Standing Committee on Treaties, which goes into a bit of detail on the national interest analysis, it says: 'Although no projects have been identified in Australia, the NIA advises that the bank is likely to focus its efforts in developing countries with significant infrastructure gaps. It is, therefore, unlikely that Australia will be a recipient of bank funding for a major infrastructure project.'

On its own, the fact that Australia needs infrastructure and this bank is unlikely to finance any in Australia is not a reason to knock it back, but I do make the point that there are a backlog of projects in this country. Saul Eslake said to a recent select committee inquiry, which I am part of, that the Australian government could spend up to $50 billion on infrastructure projects in this country under current arrangements without impacting its AAA credit rating. So let us be clear: there is no doubt that there is a need for infrastructure spending in our region and, on one level, we have a very strong feeling that Australia should be part of that, but we do need infrastructure spending in this country and it is something that the government said it would prioritise. In fact, I think our recently departed Prime Minister, Mr Abbott, said he would be an 'infrastructure Prime Minister'. As I have discovered through the select committee, that has been another broken promise. Whether because of fiscal constraints or other issues, it has not happened. So, while we are talking about infrastructure, let us not forget that Australia needs more infrastructure spending and it has a unique opportunity at this point in time.

Moving to the Asian Infrastructure Investment Bank itself, the concept is a good one—the idea of Australia playing a role and having a leadership role and influence over a large infrastructure investment bank in the region that has very significant Chinese buy-in is a good one. I note that one of my economic heroes, Professor Joseph Stiglitz, a Nobel Prize winner, has been very outspoken in supporting this bank and the concept of this bank in the region. He has been very critical of the US government for not supporting this bank, saying, 'You're stuck in the old ways through the World Bank. This is what the Asian region needs and the US should be playing a leadership role in this.' It is very useful to point out that Professor Stiglitz has been a supporter of this bank.

As was reflected in Labor's contribution, the Greens have some very specific concerns around what has not been addressed in the scanty information that we have seen to date. I might start by talking a little bit about environmental and social policy. I note that Senator Milne, prior to leaving the Senate, got it on record—and Adam Bandt, the Greens member for Melbourne, has expressed similar concerns—that we need to see what environmental and social policies the bank will pursue or, at least, what conditions or requirements are going to be put in place for an investment bank. We have seen investment in some socially and environmentally destructive infrastructure in the Asian region such as building dams in Sarawak displacing rural communities and ruining the environment. These are the kinds of things that we want to see avoided. So it makes sense to have some very clear-cut guidelines in place.

I have a number of questions for the government. I wish I had been able to get to the JSCOT meeting yesterday so I could have asked the Department of Defence, the Department of Foreign Affairs and Trade and others the questions directly—I was in here debating the amendments to a bill for small business. I will ask some questions during the committee stage. In particular, what is the government's intention in relation to the development of policies in regard to environmental and social impacts? Does the government intend to try to influence the development of the policy of the bank? Is it even clear if the government can influence that?

Going back to the national interest analysis, at page 29 and 39 it says that 'the NIA advises that Australia is negotiating to lead a constituency of regional members which would, as a group, be able to secure a seat on the board of directors. If successful, this position should allow Australia to enforce decisions made by the bank.' I would have thought that, before we signed up to this, we would have had a guarantee that we would be able to influence decisions of the bank and that we had secured a seat on the board. If you go to page 4 of the national interest statement, it makes this look a little more certain than the analysis that was given to us by JSCOT. Nevertheless, there is uncertainty there. Australia, as yet, has not secured a seat on the board. I would have thought that that would be a pre-requisite for us before putting billions of dollars of Australian taxpayers' money into an infrastructure bank in the region.

I also note that the UN sustainable development goals are due to be agreed to at a meeting in New York on 22 September 2015. Does the government intend to apply the principles of the UN sustainable development goals in influencing the policies of the bank? That is a perfectly reasonable question to ask given all the work group that has gone into developing those sustainable goals. That is also very unclear.

In terms of the clause allowing any of the members of the bank or any of the shareholders to withdraw by giving six months notice, has the government established any triggers for potential withdrawal from the bank? In other words, will there be mandatory triggers that would lead to withdrawal of our support for the bank such as the breach of environmental or social conditions? And would the government withdraw from the bank if it was found to have breached one of its own policy objectives? It is hard to answer that because we do not have those policy objectives yet. This is the problem: the concept sounds great but there is no detail on the ground. This is something the Greens believe it is very important for us to get more information on.

In relation to the immunity clauses set out for the infrastructure bank, what oversight will employees of the bank be subject to? What mechanisms are available to prosecute employees of the bank for any potential misconduct? Do the immunity provisions in relation to the conduct of employees relate to bribery? What standards will be upheld at the bank? Once again, there are some precedents that we could use from the World Bank and other organisations but it is not spelled out clearly.

You need only look online at the corruption index for countries in our region to know that there is significant corruption in terms of business dealings in these areas. If we are looking at financing private projects, particularly if there is co-financing of public private projects in this area, then corruption is going to be an issue on the table. Unfortunately, that is the lie of the land. So these things should be spelled out in a lot more detail.

I think it is unusual that the enabling legislation for Australia participating in and providing promissory notes for this infrastructure bank actually lays out that 'each country has to guarantee immunity with respect to acts performed by them in their official capacity, except where the bank waives the immunity, and shall enjoy the inviolability of all their official papers, documents and records'. This has been noted by the Scrutiny of Bills Committee report. The committee, therefore, remains concerned about the proposed approach and the limited information readily available as to the detail of the intended immunities and privileges. That is another significant area of uncertainty when we are being asked to support enabling legislation that puts billions of dollars of Australian taxpayers' money into an Asian infrastructure bank without us having even seen how the employees of this bank are going to be scrutinised, audited and, potentially, prosecuted for any breach of law. In fact, what is law when it comes to a bank that is operating across various jurisdictions? These are more questions that need to be addressed.

And what about the strategy of the bank? There is no doubt that there must be a huge pipeline of potential infrastructure projects in Asia. Are we talking about brownfields projects or are we talking about greenfields projects, which, by their nature, are of much higher risk? That is also unclear. Is there an expected or benchmarked rate of return on investment that the bank is seeking? How do we actually define and measure the social return on projects in the region in terms of what they bring to local communities? What projects will be selected on the basis of their benefits to the communities they are in or the basis of return to investors? Have any particular projects been identified? Is there even a pipeline for projects? I would be very interested to see the kinds of projects that this bank would be investing in—primarily because I am interested in getting more investment financing in Australia for infrastructure because we do have a backlog of projects here and I would like to see what is on offer in these regions. Of course, that ties in very closely with potential conditions around social and environmental factors.

And then there is governance. Who is in the constituency of countries which, according to the national interest analysis, Australia is expected to lead? As the fifth largest investor, shouldn't we assure ourselves a place on the board before signing?

Coming back to what I said earlier, why is it that we are planning to ratify the articles of the bank and provide financing as the fifth biggest shareholder when, as yet, we have not actually locked in a position on the board? I like the idea of us being able to influence infrastructure spending in the region in areas like renewable energy. I think there is enormous opportunity for Australian know-how and innovation in technology development, as there is in agricultural technology, to be employed across the region. It would be beneficial to Australia businesses. Of course, it would be beneficial to the environment, which is critically important. It is something that we can actually say we have some expertise on. If we have a leadership role and the ability to influence these kinds of things, that would be a positive for Australia. But it is not locked in. There is no certainty around that.

My last set of questions relate to aid. What impact will Australia's participation in the bank have on Australia's aid budget and activities? How close are aid activities going to be to the commercial activities of an infrastructure bank? I do not know the answer to the question of whether we even provide aid for infrastructure projects. It comes back to the earlier question: are we dealing with greenfields projects or brownfields projects? Are we dealing with assets that have already been set up and somehow been securitised or monetised and the bank is providing the financing for maintenance? What are we talking about here? I would like to see a lot more information around that.

How will Australia's participation in the bank align with our aid objectives? This government has been brutal in the last two years with the aid budget. Aid has been an ATM—an automatic teller machine—for other things in this country. I would hate to see this capitalisation from the Australian taxpayer of an Asia infrastructure bank being used as a smokescreen for reducing our aid budget further or not taking our aid responsibilities further. I am worried about this because it is something the government has introduced. It has looked at aid for private businesses—aid for business swaps. The remaining deputy leader of this country, Ms Bishop, has raised this issue in foreign affairs—that is, swapping aid for private business. Of course, that has a whole range of potential ethical and moral considerations to be taken into account as well. I am not sure if these commercial activities will displace current aid. That is something the Greens would like to know a lot more about.

Here is a scenario: we have an option to withdraw from this bank, giving six months notice. There may be some financial implications to that, but every investor in this bank has an option to withdraw. Under what conditions would Australia potentially withdraw? Should we set an automatic set of triggers for withdrawal if those conditions are reached? This seems like a reasonable approach to risk management to me. Those conditions may relate to governance—the loss of influence on the board. Those conditions may relate to something entirely different, like corruption or illegality in relation to those immunity provisions that we talked about earlier. They may relate to a breach of a very clear set of environmental or social guidelines on ethical investing. I think ethical investing is being taken seriously around the world now. Even a lot of private funds invest along ethical guidelines. Should we consider building in, through legislation, a mandatory code for potential triggers to withdraw from the bank? If we sign up to this, if we give everyone the benefit of the doubt and give the concept the benefit of the doubt in our region without the information that we need to make a good decision, shouldn't we at least put a fail-safe device in place whereby, if it does not meet our environmental, social and ethical standards and other overlays, Australia will withdraw from this project? There may be a range of other things we could include in that, but that is something the Greens would like to consider in the committee of the whole.

To wrap up, the strategy is a good one. There is a whole broader geopolitical overlay to this bank that raises the idea that the yuan, the Chinese currency, could end up becoming a replacement for the US currency as an international reserve currency. This is certainly going to see increased Chinese hegemony across the region. While we are involved in that, it is not necessarily a bad thing. It could actually be a good thing. We have seen the US oppose countries signing with this bank for its own political reasons. We have seen some very good, well-respected Nobel laureates come out and say, 'Actually, this is the kind of thing the US government should be promoting.' The US should be behind these projects because they will have the ability to raise living standards and increase environmental advocacy—a whole range of positive things—across the Asian region. There is a huge amount of infrastructure there that could be financed.

While that concept is good and the Greens support it, I would like to say that without the necessary information that we need, including information addressing the direct concerns raised by the Scrutiny of Bills Committee, we are taking this as a matter of blind faith—an article of faith. The Greens would like the Senate to consider what amendments we may be able to make to at least put triggers in place for withdrawal should conditions not be met. I think that is the only way we can actually back-test this without having that information up-front to provide some protections in line with our ethical and environmental considerations, and other factors. So, yes, I am looking forward to getting more information, as is Labor, very shortly.

I move the second reading amendment standing in my name:

At the end of the motion add, "but the Senate:

(1) urges the Government to use its diplomatic influence to secure standards for labour rights, environmental preservation and the protection of local communities that face displacement from large projects; and

(2) calls on the Government to withdraw if policies addressing environmental and social impacts required by Article 13 of the 'Asian Infrastructure Investment Bank Articles of Agreements' are breached."

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I too rise to speak this afternoon on the Asian Infrastructure Investment Bank Bill 2015 and the role it will play in the future of our international relations in the region. I am sure Senator Whish-Wilson will be able to make another contribution and talk to those amendments. Having been involved in the hearing last night—albeit somewhat distracted, as I was—I know that quite a lot of information did come out on the involvement of other countries. I particularly look forward to listening to his contribution with regard to his two proposed amendments. Other than that, given the tone and nature of the two contributions—by Senator Brown and Senator Whish-Wilson—it would seem that this is something that we all in this chamber feel that Australia should embrace, with some tweaking that may follow, perhaps, and something that we should look forward to.

The Asian Infrastructure Investment Bank Bill 2015 provides authority and an appropriation for the payment of Australia's capital contribution to this body and entity to be known as the Asian Infrastructure Investment Bank, or the AIIB. The bank is an international finance institution proposed by the Chinese government to assist in funding major infrastructure projects throughout Asia. This bank will boost economic growth, it will create jobs and it will promote trade in our region by financing much-needed infrastructure investment. As we are all aware, Asia is on our doorstep. It is a burgeoning region in terms of its different economies, whether Indonesia and Central Asia or indeed the China-Japan-Korea region. The bank will provide the economic opportunities for Australian firms and help our commodity exports in accessing markets through the development of infrastructure—for example, our coal exports. It may also be for the development of financial infrastructure or indeed the services that Australia can provide and the critical up-front investment that often is hard to raise locally. Its intended capital base of US$100 billion will help address Asia-specific acute infrastructure needs, and it is estimated at $8 trillion this decade. That is a massive amount of capital to find. As you know, when economies are in growth, they are voracious consumers of cash.

Following the completion of all necessary ratification processes, Australia will lodge its instrument of ratification with the AIIB's depository. That will be in China. Australia's membership of the bank will become effective on the latter of the date of lodgement and the day on which the bank is established. The commencement provisions set out in the bill will address the situation of the bill having received royal assent and the bank not yet having been established. On becoming a member of the bank, Australia will be obligated to pay for Australia's shareholding. Payments that Australia must make for subscriptions of shares of the capital stock of the bank is authorised by section 5 and section 7; that same section authorises the consolidated revenue fund to be appropriated for the purposes of purchasing Australia's share subscription. So, Australia's total shareholding will be US$3.7 billion, or approximately A$4.6 billion, based on the exchange rate on 22 May 2015. That will comprise US$738.3 million, or approximately A$932 million, in prepaid capital. The remaining US$2.9 billion, or approximately A$3.7 billion, will be callable capital which is a contingent liability against the Commonwealth. In other words, when called upon it is payable.

Section 6 of the act will authorise the Treasurer, as the responsible minister, to make promissory notes and issue them to the bank in accordance with the standard terms outlined in subsection (2)—namely, that the promissory notes will be non-negotiable, non-interest-bearing and payable to the bank at par value upon demand. Section 5 also enables these promissory notes to be drawn down. Promissory notes are financial instruments that are frequently used as part of a process to discharge the government's obligation to international financial institutions, such as multilateral development banks. They provide both parties with more control of encashments but can still be considered by the MDBs as an asset. Section 8 enables regulations to be made to extend certain privileges that Australia is obligated to provide to the bank and its personnel under chapter IX, articles 50 and 51. The articles provide slightly different obligations to those of other international organisations, such as exemptions from taxation on expenses relating to immigration of experts and consultants performing missions or services to the bank.

How will Australia benefit from being involved in this bank? The key benefit to Australia of becoming a member of the bank is improved infrastructure throughout the Asian region, which will provide great opportunity for Australian trade and businesses. Australia's prosperity and economic growth is tied closely with the region. Not only does greater infrastructure investment mean greater demand for Australian commodities such as metals and coal, as I mentioned earlier; greater investment in ports and rail in emerging markets will create new opportunities for Australian companies. The bank also provides an opportunity to deepen our relationship with our largest trading partner and the region's largest economy along with up to 55 other member countries. Those countries include Korea, the UK, Germany and France, to name but a few.

The bank will have an open procurement model, meaning companies from any country, not just from member countries, can bid for contracts. Australia, as a member of this bank, will be able to benefit from up-to-date knowledge of the opportunities available to Australian companies. Australian companies have won contracts from other multilateral banks, such as the Asian Development Bank, so they will be well positioned to make strong bids for contracts from this bank. The infrastructure bank is not precluded by the articles of agreement from making investments in Australia. However, we expect that this bank will initially focus on infrastructure in developing countries in the Asian region, where it will be able to play a more important role in encouraging private sector funding and financing of infrastructure.

The bank will have an initial authorised capital of US$100 billion, with around US$20 billion paid in—that is, a promise of $80 billion, which is callable at any time, and US$20 billion in the bank when it is founded. Founding members will make contributions in proportion to their economic size. In addition to Australia's approximately $932 million paid-in contribution to the bank, Australia will be responsible for about US$3.7 billion in callable capital, which will only be drawn if the bank cannot meet its liabilities from within existing resources. There is a fair bit of latitude in that business model because this bank will be searching the Asian region for projects, and, obviously, other third-party bankers will be interested in those projects as well.

One of the other motives for investing in the AIIB is the benefit to Australia's economy from the improved infrastructure in the Asian region. Joining the bank will promote stronger linkages between Australia and our neighbours, driving economic growth and generating benefits for Australian trade and businesses. The bank will work closely with the private sector and provide opportunities for business to bid for contracts with the bank. The bank will drive economic growth in our region, which will mean that there will be more demand from our region. This will create opportunities for Australia and for Australian businesses.

Australia's decision to join this bank—and there appears to be fairly universal agreement to do that—will enable it to have a seat at the table as a director. It will have a say in key investment decisions. In addition, no one country will control the bank, with major decisions requiring a supermajority.

I would like to talk a little about the open procurement process which Australian companies will be able to participate in. We will continue to work with China and other members to establish an institution that is effective, accountable and transparent and complements the work of other institutions. Senator Whish-Wilson talked about those kinds of governance issues which will be paramount for the board when working in those regions with different cultures and different expectations of how companies run. That will be something the board of the bank will have to keep a close eye on to ensure that all the projects that are undertaken meet the necessary governance criteria that we expect in our country and that we expect in the bank as well.

I would like to talk about the endorsements we have received from Australian industry. Several industry groups and companies have publicly expressed their views on Australia's membership of the bank, including the Australian Industry Group, the Business Council of Australia, Industry Super Australia and Fortescue Metals, to name just a few. In their public comments, dated 24 June, these organisations welcomed the government's decision to join the bank, and I feel sure that they are also welcoming the opposition and crossbench support that has been indicated here this afternoon. The chair of Industry Super Australia, Peter Collins, said:

This move will be a huge fillip for Australian expertise in funds management, engineering, construction, architecture and legal services which could be widely applied to projects financed by the AIIB.

…   …   …

The activities of the AIIB will not only provide new opportunities to deploy capital but also export the funds’ know how in connecting pension savings to bankable projects.

… … …

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.

Australia, like Asia, is dealing with the challenges of a shrinking workforce and an ageing population. To meet this challenge it is vital we better match the long term investment horizon of retirement savings to strengthen our economic capital base, while simultaneously producing superior risk-adjusted performance returns on retirement savings.

Peter Collins concluded with:

It's a win-win.

Business Council of Australia chief executive, Jennifer Westacott, said:

The Business Council of Australia (BCA) welcomes the government's decision to join the Asian Infrastructure Investment Bank (AIIB) as a founding member.

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.

Australian companies will benefit from opportunities to participate in developing and building new AIIB financed infrastructure, as well as having access to improved infrastructure which facilitates trade in the region.

Infrastructure investment in Asia is essential to sustaining economic growth, and the AIIB's promise of an additional $100 billion will be important to meeting these infrastructure needs.

That is what the Business Council of Australia says. We can see a theme emerging here. This involvement with this bank, this money and this investment will create an entity which Australian businesses, companies and joint ventures can get involved with. It is just another opportunity to export our skills. The Australian Industry Group chief executive, Innes Willox said:

Ai Group welcomes Australia's participation in the Asian Infrastructure Investment Bank. We have argued for some time that 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.

Given our national ambitions to be more thoroughly engaged in the Asian region, it makes clear sense for Australia to become a founding member of the AIIB and to work to ensure its success.

So, again, a strong and ringing endorsement of our participation as a founding member of what this bank has set out to achieve. The Deputy Leader of the Opposition, the Hon. Tanya Plibersek MP, released a statement on 24 June on behalf of the opposition, welcoming the government's decision to join this bank.

As I mentioned before, there is an estimated infrastructure financing gap of US$8 trillion in the Asian region this decade, and this bank will be part of the solution to close the gap. Joining this bank presents Australia with opportunities to work with our neighbours and our largest trading partner to drive economic growth and jobs. Working closely with the private sector, the bank paves the way for Australian businesses to take advantage of the growth in infrastructure in our region.

In the seconds that I have remaining, I have a couple of comments on last night's hearing. The Treasury and the Department of Foreign Affairs and Trade were able to advise at the hearing that Australia had recommended a number of governance strengthening mechanisms in August and was provided with the information, and it is part of the report. (Time expired)

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

I too rise to speak on the Asian Infrastructure Investment Bank Bill 2015. It is with great pleasure that I am able to make a contribution to the debate on this particular bill. It is also even more delightful to know that we have reasonably universal support for the benefits that such a bank is going to bring to our country.

The Asian Infrastructure Investment Bank Bill 2015 basically sets out the authority and the appropriation for the payment of Australia's capital contribution to the bank. This will facilitate Australia's membership of the bank. Following completion of all the necessary ratification processes and the like, Australia will lodge its instrument of ratification with the bank's depository in China, and Australia's membership of the bank will become effective on either the date of the lodgement or the day on which the bank is actually established. On becoming a member of the bank, Australia will be obligated to pay for Australia's shareholding. I understand Australia's total shareholding will be US$3.7 billion, which probably adds up to about A$4.5 billion on current exchange rates. So it is obviously a very substantial contribution on Australia's behalf. We have to realise that that contribution is going to have amazing and ongoing impacts for Australia.

We only have to look at what is happening in the Asian region as we speak. The Asian region is projected to account for half of the global population growth that we are going to see over the next 35 years. It is already the world's most populous continent, but it is projected that another billion people will be resident in the Asian continent by 2050. It is not just the increase in the number of people in Asia that is of significance to Australia as one of the residents of this particular region; the changing affluence in Asia means that we have a shift towards greater expenditure and a more western diet—particularly with increases in protein, which they are looking to gain through things like meat and dairy rather than plants. So the opportunity for Australia in the Asian area over the next 35 years is massive, and our involvement in the Asian bank obviously gives us a greater level of access to take advantage of these opportunities that are presented on our doorstep.

The key benefit of Australia becoming a member of the Asian Infrastructure Investment Bank is improved infrastructure throughout the Asian region, which will provide great opportunities for all of our trade and businesses in Australia. Australia's prosperity and economic growth are closely tied to the region. Not only does greater infrastructure investment mean greater demand for Australia's commodities, such as metals, but it also means greater investment in ports and rail in emerging markets will create new opportunities that currently do not exist for Australian companies. The AIIB also provides an opportunity to deepen our relationship with our latest trading partners in the region and the largest economies, along with the other 55 member countries of the bank. It is interesting that this particular opportunity has come to our doorstep so soon after the trade agreements that we have entered into since coming into government with our near and very important economic neighbours of China, Korea and Japan.

Obviously there has been a lot of talk in recent times about the ChAFTA, but the overwhelming majority of Australians believe that the opportunities that ChAFTA provides for Australia are going to be of great benefit to this country. Let us remember that China is already Australia's largest trading partner. It buys almost one-third of all Australian exports, so one-third of Australian exports go into one country, which is a massive amount—it was valued at nearly $98 billion in 2014. It is also good to remember that it is our top overseas market for agriculture, research and services exports, and Chinese investment in Australia has been growing strongly in recent years. It is believed to have reached in excess of $65 billion in 2014. ChAFTA builds on Australia's largest successful commercial relationship with China, and by securing markets and providing Australians with even better access to China across a range of our key business interests, including goods and services and investment. The trade and investment opportunities with China will be a central key to the prosperity of Australia because, as I have probably said ad nauseam in this place, Australia is an exporting nation and we are not going to get rich selling to ourselves, so the importance of the kinds of agreements that we have put in place since coming into government in 2013 are absolutely essential because the prosperity of Australia is going to be driven by the prosperity of our export market opportunities.

It is not just China; we have other agreements, particularly the two that I have already referred to—the Japan and Korea agreements. Once again, the economic partnership that we have established with Japan—Japan has been a very sophisticated market for Australian exports for a very long time, and in some areas it is our biggest market. We have had a long-standing and very complementary relationship and economic partnership with Japan. It is also our second largest trading partner and the fourth largest source of foreign investment into Australia, so the economic partnership agreement that we entered into earlier this year is of major importance to Australia, particularly some of our export markets, which come from—and I know that certainly for my home in the Riverland in South Australia the Japanese market is a massive market for our citrus and it has been not just a very large market but also a very profitable market for Australian citrus growers over a very long time. It is also a big market for our beef, as you would know, Mr Acting Deputy President Back; wine, which is another huge export commodity from South Australia; dairy; and seafood. This particular market, the Chinese market and, indeed, the Korean market are very important for our farmers and our agricultural producers across Australia. Given that Australia has a reputation as being one of the cleanest, greenest and finest producers of good quality, safe, clean food these particular agreements are very important. The fact that we have these agreements is very important, and overlaying that is this very important piece of legislation that will facilitate Australia's membership and involvement in the Asian Infrastructure Investment Bank. I think it is very timely that they should coincide.

It is also really important to understand the opportunities that will be provided for Australian companies to bid for the projects that will be invested in by this particular bank. One of the things that is very exciting is the opportunity for an open procurement model, meaning that companies from any country, not just member countries, will have the opportunity to participate in bidding for contracts. But, as a member of the AIIB, Australia will benefit from having a working, up-to-date knowledge of what is going on, the projects that are afoot and the opportunities that we are able to make available to Australian companies. Australian companies have won contracts from other multilateral banks, such as the Asian Development Bank, so I think Australia is well positioned to take advantage of the opportunities that are provided by this new Asian Infrastructure Investment Bank.

While the AIIB is not precluded by its articles of agreement from investing in Australian projects, it is my understanding that initially the focus of the bank's investment in infrastructure will be in developing countries, particularly in the Asian region, where it will be able to play an important role in encouraging private sector funding and financing of infrastructure so that the opportunities that are able to be capitalised on in these particular areas can be realised.

Australia's contribution to the bank, as I said, will initially be that Australia will put in approximately $932 million paid in contribution to the bank, but we will also be responsible for about $3.7 billion in capital, which will only be drawn on if the bank cannot meet its liabilities within existing resources. I suppose the question is: why is Australia making a decision to commit $932 million—cold, hard dollars—to the AIIB instead of funding other priorities, because there has been much debate in this place about the limited resources that are available to the Australian government for investment or for expenditure on any government project, no matter what it might be. The decision by the government to make the Asian Infrastructure Investment Bank a priority for the allocation of resources is something that has obviously been very, very carefully and strategically considered.

We believe that Australia's economy will benefit from improved infrastructure in the Asian region. Joining the AIIB with them will promote stronger linkages between Australia and our neighbours. It will drive economic growth and it will generate benefits for Australians in the area of trade and business. And, as I said, being an exporting nation, if we continue to concentrate on the activities that happen only within our shores then our opportunities for the growth and expansion of our economy will be extremely limited. So, I think the forward thinking of the current government in seeing the opportunities that this particular infrastructure bank is able to provide for Australia—Australia's businesses, Australia's economy and Australia's future—represents a very strategic decision and one that has been very wisely made.

Also, there is no doubt that the AIIB will work closely with the private sector to deliver these infrastructure projects. Given that Australian businesses are considered to be world leaders in many of the areas of infrastructure delivery, the opportunity is there for Australian businesses on the ground, not just the benefits of the infrastructure once it has been provided but there are opportunities in the build phase of the infrastructure for Australian companies. That also needs to be considered in realising the net value to Australia, the net economic benefit and the net economic opportunity, of its involvement in the Asian Infrastructure Investment Bank.

Consistent with the treatment of Australia's contributions to other international financial institutions, Australia has paid in capital. It will be treated as an investment. Therefore, it does not come at a cost to other government spending and will not directly add to the budget deficit, which is very important for Australia's books, to make sure that we keep our credit ratings where they need to be, sensibly treating capital as an investment.

But you do not just need to take my word for the benefits that this opportunity is going to provide for Australia. A number of people have come out publicly in support of the Asian Infrastructure Investment Bank. And I think it is very important that we seriously take into account some of the comments that have been made by important heads of Australian industry and industry groups. They are the ones who represent the very people who will be the beneficiaries of this particular project. But we must also reinstate, reinforce every time, that if we have businesses that are going well in this country, these businesses employ people, and the most important bottom line is to ensure that the majority of Australians—that every Australian we can possibly can get into the workforce—has an ongoing job. That is probably the most important thing that any government can achieve.

But we as a government believe that the best way of facilitating people getting jobs is making sure that the jobs exist in the first place. You cannot create jobs out of thin air; hence we believe that investment in these long-term productive activities is much more important. It comes back to the old saying that if you want to feed a man for a day you give him a fish but if you want to feed him for life you give him a fishing rod. I think that is very important with these sorts of projects, these sorts of strategic investments by government. What we are seeking to do is provide the fishing rod to Australian industry so that we are actually able as a country to feed our people in the longer term and make sure they have jobs, have a standard of living to which I think all Australians aspire. And we certainly do not want to see our standard of living slipping backwards the way it has done over the past few years. It is these sorts of investments into the future and the future prosperity and economic opportunity that will make sure that Australia retains or regains its position as an economic powerhouse that is able to deliver for all citizens of Australia.

But, as I said, do not just take my word for it. There are a number of industry leaders who have been very public on the record about their support for this opportunity. As an example, the chair of Industry Super Australia, Peter Collins, said:

This move will be a huge fillip for Australian expertise in funds management, engineering, construction, architecture and legal services which could be widely applied to projects financed by the AIIB.

He also said:

The activities of the AIIB will not only provide new opportunities to deploy capital but also export super funds' know how in connecting pension savings to bankable projects.

And:

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

So, obviously the head of one of Australia's large industry super funds has seen the opportunity for his particular funds and resources that he has available for investment in these sorts of projects and that they really give him the opportunity to generate the economic growth that he needs to in order to provide the outputs that need to occur at the end of the investment in a superannuation scheme.

The Business Council of Australia chief executive, Jennifer Westacott, equally made some very positive remarks about the opportunities that the infrastructure bank provides for Australia:

The Business Council of Australia (BCA) welcomes the government’s decision to join the Asian Infrastructure Investment Bank (AIIB) as a founding member.

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.

Australian companies will benefit from opportunities to participate in developing and building new AIIB financed infrastructure, as well as having access to improved infrastructure which facilitates trade in the region.

Ms Westacott obviously has taken the view that the opportunities are not just in the development or the build component of the opportunities that this bank provides but also in the increased trade and investment opportunities for Australia in the region.

Australian Industry Group chief executive Innes Willox was equally full of praise for the bank:

Ai Group welcomes Australia's participation in the Asian Infrastructure Investment Bank. We have argued for some time that 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.

Given our national ambitions to be more thoroughly engaged in the Asian region, it makes clear sense for Australia to become a founding member of the AIIB and to work to ensure its success.

Mr Willox makes a very good point in terms of the strategic overall policy of this government in acknowledging and recognising the opportunity that Asia provides for Australia. So often we hear the rhetoric whereby governments say that they are going to do things—'We are going to be the food bowl of Asia'; 'We are going to feed the world'; 'Agriculture is going to be one of the mainstays of our economy.' So often we hear the rhetoric, but often the policies that sit behind that rhetoric do not deliver the outcomes of the policy.

If you have look at a broad range of the activities that have occurred under the government that I am a member of—this current coalition government—many of the things that we have sought to put in place since coming into government have been the policy implementation and real actions behind the rhetoric that we have heard for such a very long time. The free trade arrangements that we have put in place with Korea and Japan—and hopefully we will see the nonsense in relation to the ChAFTA arrangements resolved very shortly when the opposition realises that focusing on one particular component of that agreement is completely silly in comparison with the massive economic benefits that we can deliver to our country from signing it. When you look at the agricultural white paper that we have seen in recent times and, on top of that, this particular bill today—the Asian Infrastructure Investment Bank Bill 2015—that seeks to provide the opportunity, the authority and the appropriations for Australia's involvement in what I think is a very important initiative and a fantastic opportunity—the Asian Infrastructure Investment Bank—which will enable many Australian businesses, over a very long period of time, to realise the series of opportunities that would not otherwise be available to them in the largest and most quickly growing economy in the world. (Time expired)

Jacqui Lambie (Tasmania, Independent) Share this | Link to this | Hansard source

I rise to oppose the Asian Infrastructure Investment Bank Bill 2015. The main purpose of this bill is to facilitate Australia becoming a founding and substantial financial member of the Australian Infrastructure Investment Bank. The title of his bank and legislation is fundamentally misleading. It is not Asia that has established his bank; it is China. China announced its intention to establish the bank in October 2013 and is driving this project. If China had chosen not to project its economic power into Asia and the South Pacific through the establishment of this bank, this debate would not be happening today in our parliament. Up-front, if we are to be honest, it should be called the 'China and Other Countries Infrastructure Investment bank', not the Asian Infrastructure Investment Bank.

There are many reasons not to agree to this legislation, but before I detail the most common found in our media I would like to make this point: this financial organisation will be controlled and heavily influenced by the communist government of China. The Parliamentary Library report states:

To illustrate the disparity in voting power, China, the largest AIIB shareholder will have 297,804 Share Votes while the Maldives will have just 72 Share Votes.

A weighted voting system ensures decision-making reflects the relative size of a country’s capital contribution. However, it potentially creates a longer-term challenge because of the need to ensure the distribution of power within the organisation keeps pace with shifts in relative economic power. In multilateral organisations, representation and voice can be strongly linked to perceptions of legitimacy and effectiveness.

As China will have over a quarter of the votes, under the AIIB’s Articles of Agreement it will have an effective veto over issues requiring a ‘super majority’, defined as 75 per cent of votes and two-thirds of all member countries. The types of issues requiring a super majority include selecting the President, increasing the capital stock of the AIIB and changing the size and composition of the Board of Directors. However, this is not without precedent. The United States is the only country to have a veto over major governance decisions at the IMF and World Bank.

No serious financial expert or commentator will ever say you can trust any financial figures that emerge from the government of China. Because of a lack of transparency and basic integrity, all financial figures and reports that are created by the Chinese government are viewed by every free-world Western economy and every Australian peak body representing Australian business as suspect and to be taken with a grain of salt. Just like the Chinese free trade agreement, we are making the mistake of entering into a deal with an organisation that is not like any private sector entity in the Western world—because it is not a private sector entity with the same rigorous, trustworthy reporting mechanisms.

This bank will be an arm of the Chinese communist government just like its military, whose purpose will be to protect, expand and spread the influence of communist, not democratic, culture. The influence of the Chinese government is being felt in this parliament today through at least $5.5 million in political donations from people linked to the Chinese government, so it is little wonder that there will be little or no resistance to this legislation which the Australian bankers are all supporting. The Australian banking industry is another group of people who have considerable influence in this parliament due to the amount of political donations they give to political parties and the people who have come from the banking industry and now occupy high positions of authority in our political system.

It is not just me who has expressed grave concerns about the establishment of the 'China and Other Countries Bank' and participation in it. Some very respected people and sources have raised serious concerns, which the Australian government is now ignoring by entering into this deal. From Huey Fern Tay, the ABC journalist based in Beijing:

China is the biggest shareholder at 30%, Australia is 6th largest with 4.9% voting power—putting us at a great disadvantage.

And:

Japan and US refuse to join—why? Well the AIIB doubles up on the World Bank and Asia Development Bank. There are still doubts surrounding the AIIB's transparency and governance standards, even though Australia waited for those to be improved before joining.

ABC business reporter Stephen Letts writes that the Asian Infrastructure Investment Bank is:

… self-serving as China hopes the AIIB will be a better way to deploy its massive foreign exchange reserves, which are earning almost nothing in the US Treasury bonds.

From The Economistwe read:

… China will use the new bank to expand its influence at the expense of America and Japan, Asia's established powers. China's decision to fund a new multilateral bank rather than give more to existing ones reflects its exasperation with the glacial pace of global economic governance reform.

Yun Sun, writing in The Diplomat, has said that China has capital share of 30 per cent and voting rights of 26.06 per cent and:

… will have veto power on issues that require a supermajority vote, such as the board, the president, the capital, as well as the major operational and financial policies. Retention of a veto reflects China's determination to retain control on key aspects of the bank.

Most Australians will remember the surprise visit of a flotilla of three Chinese warships which sailed past our territorial waters and Christmas Island in February 2014 on a military exercise that included combat simulations. The media report of the incident said:

Never before has a Chinese naval drill come so close to Australia.

  …   …   …

This month's exercise took the theory a good step closer to reality, bringing China's bold ambitions virtually to Australia's doorstep. In doing so, it has crystallised the challenge facing our military planners in preparing for a very different world.

On the subject of China's military might, I think of its recent parade. While our military planners are preparing for a very different world because of the rapid increase in Chinese military might and the willingness of the Chinese government to use that might, it appears that the Liberal and National Party leaders and members of this parliament, with their calls to rush into a free trade agreement with China and this legislation, have not prepared for a very different world. Australia's purchase of hundreds of billions of dollars of sophisticated military hardware—F35 fighter jets and submarines—is because of the very real military threat the Chinese communist government poses to our nation and our allies. This is a simple statement of fact not, as some would have you believe, a xenophobic rant.

Most Australians would be shocked to learn of the size of the donations to our major political parties by people who have links—most likely strong links—to the Chinese communist government. Especially in the light of the approval of the Chinese government state owned Shenhua mine, the question must be asked and answered: what political influence does this money—$5.5 million—buy?

This government wants the Australian people to rush into both a banking deal and trade deal with a country which recently put on a parade which The Economist magazine described as: 'a show of military muscle in Beijing to upset Asian neighbours'. Indeed, so aggressive was the display of Chinese military might this year that every western government chose not to send their leaders to a ceremony whose primary purpose was to celebrate victory over the imperialist Japanese forces and fascism. This was a conflict on mainland China in World War II which killed 35 million Chinese and tied up 600,000 Japanese troops, a feat of resistance by the Chinese people which most likely prevented the invasion of Australia.

This government has had a very mixed approached to China. Our previous Prime Minister, Mr Abbott, boycotted China's most important cultural event in six years because of fears about China's military aggression and expansionism, while his party urges this Senate to support legislation like the China free trade agreement which undermines our nation's sovereignty—and I refer to the investor state dispute settlement provisions which allow the Chinese government to sue our government if we pass legislation thought this house which the Chinese believe harms their commercial interests.

The government's own figures reveal that Chinese investment in Australia in the last 10 years has increased—without a China infrastructure bank or a free trade deal—by a factor of 10. It has risen from $3 billion to $32 billion. The average Australian would like to know where the Chinese money has been spent. How many Australian jobs have been created and where are they? Before we enter into this deal and others there needs to be more comprehensive community discussion that engages ordinary Australians, not just the elite, from both sides of the political divide.

Media reports indicate that the American President has stopped using a famous hotel chain because of espionage fears after the hotel chain was bought by people linked to the Chinese government. Are we going to call the American President xenophobic because his administration is taking precautions and is vigilant about Chinese espionage and other forms of cultural and industrial attacks on western values of democracy and liberty? In the national interests of Australia I oppose this legislation and course of action. There are better ways of conducting business with China which respect our democratic values and our rule of law and guard our children's liberty and freedoms.

Debate interrupted.