Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

in reply—I thank the honourable members who have contributed to this debate. The purpose of the International Monetary Agreements Amendment Bill 2009 is to simplify the process for Australia to accept agreed amendments to the articles of agreement for the International Monetary Fund and the International Bank for Reconstruction and Development. The International Monetary Agreements Act 1947—the IMA Act—established Australia’s membership of the IMF and the World Bank. The articles of agreement of the fund and the bank are schedules to the act. The purpose of this bill is to alter the definition of the IMF articles of agreement, the fund agreement, and the definition of the World Bank articles of agreement, the bank agreement, to include any amendments to the relevant articles of agreement that enter into force for Australia without the need for further legislative changes. Importantly, similar provisions are commonly used in Australian legislation to allow updates to international treaties to which Australia is a party.

Currently, an IMA amendment act is required to reflect any amendments to the fund and bank agreements. However, this legislative process is largely an administrative task, as all the proposed amendments are required to go through rigorous approval processes at both the institutions and within Australia. The Treasurer, as Australia’s governor of the IMF and World Bank, is required to vote on any proposed amendments to the articles of agreement of either institution. For the amendment to enter into force, three-fifths of all members of the IMF or the World Bank, having 85 per cent of the total voting power, must accept the amendment. If accepted, the amendment enters into force for all IMF or World Bank members, whether or not a particular member has accepted it.

The agreements constitute international treaties for Australia and, as such, irrespective of the requirement for legislation, any amendments to the treaties will still require tabling in parliament and consideration by the Joint Standing Committee on Treaties. A national interest analysis was tabled in parliament on 16 June 2009, outlining these proposed amendments for scrutiny by the Joint Standing Committee on Treaties.

This bill will allow Australia to accept a number of governance reforms which Australia has recently approved and which have been approved by the IMF and World Bank boards of governors when they enter into force for all members, including Australia, without the need for further legislative processes. Specifically, these amendments aim to enhance the voice and participation of developing countries in these two institutions and support a new income model for the fund aimed at providing it with a more robust, stable and sustainable income base into the future. As governor for Australia of the IMF and World Bank, the Treasurer voted in favour of each of these proposed amendments. Australia has a significant interest in seeing these reforms implemented, as they will enhance the effectiveness and legitimacy of both institutions and support the robust, stable and sustainable financial position of the fund into the future.

This amendment will also deliver for Australia on the commitment of the G20 leaders at their meeting on 2 April to implement the April 2008 IMF quota and voice reforms and the 2009 World Bank voice and participation reforms. Given the current G20 reform agenda, which includes calls for reform of the IMF and World Bank, it is likely that further amendments to the fund and bank agreements will occur in the future. This bill will allow for Australia to adopt the recently agreed reforms, as well as any future reforms which require amendments to either institution’s articles of agreement, in an efficient and timely manner while maintaining policy and parliamentary oversight. I commend the bill to the House.

Question agreed to.

Bill read a second time.

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