Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Hansard source

I rise on behalf of the coalition to speak in support of the International Financial Institutions Legislation Amendment Bill 2010. The issues within this bill build on bipartisan support over a number of years. The bill has two key objectives and I will briefly run through each of them. Firstly, as we know from the explanatory memorandum and the minister’s introductory speech, it authorises subscription to additional capital stock in the International Bank for Reconstruction and Development, which is part of the World Bank, at a total cost of around $51.6 million. That additional stock will enable the International Bank for Reconstruction and Development to better carry out its purpose of providing loans to developing countries. It will do so in terms of the lending levels necessary at this point in time and in prudential standards that are necessary. Specifically, it authorises a subscription by Australia to 7,128 additional shares in the capital stock at a price of around US$120,635 a share, making that total commitment as I just indicated of $51.6 million.

Secondly, the bill incorporates changes to the agreement to the International Finance Corporation and to the Multilateral Investment Guarantee Agency Convention. The International Finance Corporation promotes sustainable private sector investment in developing countries and is part of the World Bank group, the largest multilateral source of private sector financing in developing countries, with more than 180 member countries. The changes to the articles of agreement reflect an increase in voice and participation of developing and transition economies. As the minister’s second reading speech pointed out, specifically it will do this by increasing basic votes of those participants and in doing so that will implement a G20 commitment.

The amendments with respect to the Multilateral Investment Guarantee Agency Convention, are four-fold: to enable insurance coverage of stand-alone debt; to allow changes for the process of investor registration; to allow for greater insurance coverage of existing assets; and to eliminate one requirement relating to coverage of additional non-commercial risks. They have been outlined in detail by the Assistant Treasurer and they are outlined in detail, of course, in the explanatory memorandum. As I said, this is a bill that has bipartisan support. It builds on much of the good work done in the last decade or so and I commend the bill to the House.

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