Wednesday, 20 February 2019
Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019; Second Reading
I also rise to speak on the Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019. We have heard from previous speakers that it will allow Efic to fund offshore infrastructure projects in our region, will provide Efic with an additional $1 billion in callable capital to fund infrastructure projects in our region and will renew our commitment to partnering with and investing in our closest neighbours.
We all know here that infrastructure development is one of the most critical needs in the region, particularly for our Pacific neighbours and Timor-Leste. The development sector, however, and some key stakeholders have raised some concerns about this bill, including the reason for the large increase in the callable capital for Efic. They have questions about the quality of projects that will be funded, the lack of accompanying policy work to improve development outcomes and the conflicted nature of Efic to fund overseas infrastructure projects that were in Australia's interests but not in the interests of the recipient country. We are aware that there need to be strong policy frameworks around this bill. There are many academics and others who have made submissions with respect to that. We need to get this right. A Senate legislative committee has been agreed to by both major parties to examine the impacts of this particular bill. I think that's the right step going forward.
It is interesting, though—just to give a bit of context to this bill—that very recently Labor made a very important announcement in this policy space on financing infrastructure in the region. The Leader of the Opposition, Bill Shorten, last year on 29 October talked about:
My vision is for Australia to actively facilitate concessional loans and financing for investment in these vital, nation-building projects through a government-backed infrastructure investment bank.
When our Pacific neighbours look for partners to invest in critical infrastructure projects, a future Labor government would make sure that Australia is the first place that they look. We'll make sure, to quote the Leader of the Opposition again, that Australia is seen as the partner of choice in our region. Of course—and this is interesting as well—within a couple of weeks of the Leader of the Opposition's announcement, Prime Minister Morrison effectively copied this announcement. In November he announced the government's new mechanism for providing infrastructure projects, the Australian Infrastructure Financing Facility for the Pacific. Efic, of course, will become the instrument for providing the loan component of this new mechanism.
This is about the role that Australia, as a middle power, should play in our region. It's about our role as a good, responsible international citizen. When we help our neighbours prosper, we all prosper. Our world becomes a safer one. Our region becomes more secure. When you engage, interact with and support countries in our region, it's actually in our national interest. It benefits us as well as them. Good governance, better governance, less poverty and better systems in place mean less violence, less conflict, more trade, more engagement and, of course, healthier and happier people right throughout the region.
Do you think that this government understands this? They have cut $11 billion in development assistance on their watch over the last five years—development assistance that is critically important for these goals, for our goals and for our national interest. When our neighbours can thrive, whether it's through their transport, their telecommunications or the energy and water infrastructure that they need, our region is the better for it. We as a nation are the better for it. This goes for development assistance as well as these concessional loans.
We know that these loans will be granted on a commercial basis and must meet what's called an Australian benefit test. We need to help build local capacity to ensure that domestic policy frameworks are embedded so that Australian infrastructure support goes as far as it can. It creates the positive impact that these recipient countries need. Both the major parties have agreed to a Senate legislative committee which will examine the impacts of this bill. Pending this review, the shadow minister for trade, who's here today and sitting right next to me, has foreshadowed that there will be certain amendments that may be needed in the Senate. This is the right step forward.