Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I rise this evening to speak on the International Fund for Agricultural Development Amendment Bill 2012. This bill, if passed, will allow Australia's re-engagement with the International Fund for Agricultural Development, IFAD. A specialised agency of the United Nations, it aims to alleviate rural poverty. Having seen the face of human suffering brought on by malnutrition, there is no disputing that much more needs to be done in this area. In times of greatest suffering, as was seen in the Horn of Africa, Australians have generously thrown their support behind international relief efforts. Food security will be one of the great humanitarian and security challenges that will confront the international community over the coming years and decades. Rising populations, coupled with the growth of new middle-class markets in regions such as Asia, will increase the global demand for protein-rich foods and cereals.

As was seen in 2007-08, sharp increases in global food prices can be the catalyst that tips fragile societies into violent ones. At that time food riots broke out in at least a dozen countries, including Egypt, the Ivory Coast, Senegal, Yemen and Mexico. In Haiti, protests over rising food prices resulted in the death of at least six people, including a United Nations peacekeeper. The country's prime minister was forced from office after Haiti's parliament accused him of mishandling the government's response. This crisis was the product of a range of factors, including drought conditions in producing countries, increasing oil prices, demand for biofuels and restrictive trade practices.

Recent analysis by the Economist Intelligence Unit has pointed to sub-Saharan Africa as the most vulnerable region for food security. South Asia is considered the second lowest, with countries like Bangladesh particularly susceptible to disruptions to its food supply. According to Future Directions International, recent disasters in the country destroyed more than a thousand hectares of seasonal crops and much of its seed inventory. World Bank Group President, Jim Yong Kim, has warned that rising food prices are:

… threatening the health and well-being of millions of people. Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly.

The coalition supports efforts to improve international food security. Our nation's history of rural development, often in the face of tremendous adversity, enables Australia to play an important—indeed, leading—role in this area. Our technical expertise in areas such as tropical agriculture, dryland farming and establishing the regulatory frameworks that sustain agricultural development is widely regarded throughout the world. This support is not unconditional, however. We have a duty to ensure that the international organisations to which we contribute Australian taxpayers' money are accountable, fully accountable, to their members. We must also ensure that any decision, no matter how great or small, is in Australia's national interest.

My concerns, where they exist, do not relate to the issue of food security, nor do I question the need for enhanced and better-coordinated international action in this area. Rather, my concerns focus solely on the organisation IFAD, the International Fund for Agricultural Development, its history of organisational shortcomings and its strategic fit within the Australian aid program. These concerns are not new. In 2004 the former Howard government withdrew Australia from the fund, citing its:

The decision to withdraw from the fund was supported at the time by the Joint Standing Committee on Treaties. According to the committee's report:

AusAID has had concerns regarding IFAD’s performance in relation to the Australian aid program and its priorities for 'a substantial period of time'.

The committee found:

The lack of focus on South East Asia and the Pacific by IFAD is contrary to Australia's policy of focussing on the immediate region.

And:

… it is reasonable to ask whether this is the best use of our aid dollar.

At the time of Australia's withdrawal, the Australian aid program's priority regions of South-East Asia and the Pacific accounted for only seven per cent of all IFAD loans over the five years to 2002, according to the national interest analysis. The national interest analysis presented to the committee noted:

Systematic assessments by AusAID of IFAD's performance have highlighted serious concerns with IFAD's lack of focus on South-East Asia and the Pacific and shortcomings in its management and donor relationships.

It was:

… the Committee's view that Australia should withdraw from IFAD and utilise the ongoing savings on overseas development assistance in South-East Asia or the Pacific.

The decision to withdraw Australia from the fund was not made easily but it was both justified and necessary. As the recent review of Australia's engagement with IFAD stated:

In 2004 these were clearly valid, important reasons for Australia to take the sufficient and protracted step of withdrawing from a UN organisation.

Given the significant financial contribution that will be asked of Australia, the Australian parliament must satisfy itself that all of these shortcomings have been addressed. We must also be assured that the millions of dollars that will be required to support Australia's ongoing membership of IFAD are not better applied elsewhere, such as combating the spread of tuberculosis in Papua New Guinea, which received less than $6 million in funding from AusAID last year. It was for these reasons that the coalition referred this bill to the Joint Standing Committee on Foreign Affairs, Defence and Trade for further detailed consideration. Specifically, the committee was asked to determine whether the International Fund for Agricultural Development has fully addressed the concerns that were raised by the former Howard government and which prompted Australia to withdraw from the organisation in 2004.

Having assessed the evidence presented to the committee, it is clear that the answer is no—the fund has not fully addressed the concerns of the former Australian government. Progressing along the reform path is not the same as having fully addressed these problems. In fact, the review of Australia's engagement with IFAD states:

… challenges remain in HR and financial management.

A 'Desktop analysis of the International Fund for Agricultural Development', an annex to the review, found:

… IFAD is benchmarked worse than peers for some aspects of financial management and administration.

Too many questions remain unanswered about the fund for the coalition to lend its support to this bill. In its multilateral assessment of IFAD, the United Kingdom Department for International Development described the likelihood of positive change within the fund as 'uncertain', as it was too soon to judge the impact of the new top management team. Given this assessment, why isn't the Australian government waiting until the likelihood of positive change is better known? Why is the Australian government making a $120 million payment to the fund in 2013-14 when the United States only committed $90 million; the United Kingdom, $82.9 million; Canada, $76.8 million; and Germany, $70 million; and New Zealand committed nothing in the last replenishment round? What is the government's justification for proposing a larger contribution from the Australian taxpayer than the United States, with an economy of $15.6 trillion; Germany, with an economy of $3.3 trillion; Britain, with an economy of $2.4 trillion; or Canada, with an economy of $1.7 trillion? Is this commitment based on careful analysis, or is it, as it appears, just the latest example of the government shovelling money out of the door in order to appear to the world as if it is meeting its aid policy commitment of 0.5 per cent of gross national income by 2016?

Far too often, just spending money is the default position for this government, without consideration of the detail—usually it is done on the back of a drinks coaster. Time after time this government has shown itself incapable of even the most basic responsibilities expected of our nation's leaders. When it comes to fiscal management, the government is content to make it up as it goes along. If Australia is to rejoin this fund, there must be no doubt that our aid money will be spent both efficiently and effectively.

According to IFAD's 2011 annual report on investigation and anticorruption activities, the number of allegations of fraud and corruption received by IFAD's Office of Audit and Oversight has increased from five in 2004 to 41 in 2011. When asked about corruption within the fund during the committee's inquiry into the bill, AusAID stated that it was unaware of any allegations. It was in IFAD's annual report. Given the amount of money that is involved, the Australian people rightfully expect that their government will undertake the necessary due diligence. It has not. Once more, this work has been left to the coalition.

As a result of these concerns, the coalition has no option but to oppose the bill. As I have stated earlier, this position does not reflect our views about the need for greater international action on food security. Rather, it is about ensuring that good public policy is achieved—a lesson that this government continues to ignore. The coalition call on the government to show prudence, to delay the bill until the concerns that we have raised are fully addressed and the impact of the reform program commenced by IFAD's new management is known and can be properly assessed. I urge the government to take this sensible and logical course, given that $120 million of taxpayers' funds are involved. As we continue to coordinate international efforts on food security and on agricultural development, the government should be conscious of the need to ensure that our aid dollar is spent as effectively and efficiently as possible—indeed, it is our obligation as parliamentarians to ensure that that is the case. The government has failed to do so. The coalition opposes this bill.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I listened very carefully to the Deputy Leader of the Opposition's speech, and let me say from the outset that they never intended to vote for this bill, they oppose rejoining the fund, and if you wait for them to be satisfied you will be waiting for all time.

The fact is that this bill, the International Fund for Agricultural Development Amendment Bill 2012, comes before the House after two parliamentary inquiries. The previous inquiry was done by the Joint Standing Committee on Treaties, and its report said that it supported the Agreement Establishing the International Fund for Agricultural Development (Rome, 13 June 1976) and recommended that its binding treaty be taken.

Of course, the Howard government may have had good reason for withdrawing from the fund in 2004, and it did not seem like an extraordinary action to do that. It was certainly sending a message to the fund about their internal governance issues, and I would think that it was the strongest possible action. An alternative course of action would have been, of course, to simply not put any money into the replenishment rounds. That would have also sent a message, I would have thought.

Nevertheless, we withdrew from an organisation that we had been a founding member of, an important organisation for the world because it combats poverty, particularly related to agricultural development, and we know—I certainly know from my own interactions on the foreign affairs committee—that agricultural development is crucial to combating poverty. You only have to go to Timor, where they have a hungry season every year for two months of the year, when, while they do not starve, people certainly go hungry; there is not enough food around. If you go to Pakistan or any of those countries, you certainly find that agricultural development and agricultural productivity can have a very big impact on the reduction of poverty. And of course if we reduce poverty we increase the stability of these communities.

I chaired the Foreign Affairs Subcommittee, which looked into this bill. We recommended that it be passed. There was a minority dissenting report ably done by the member for Berowra, who will no doubt follow me in this debate. What we found, and what the evidence shows—and it is in the committee's report—is that it was AusAID that recommended that we rejoin the fund, and it was AusAID that thought it was the right time to do that. They had made their assessment about the best way of spending our aid dollars. We have to remember that the contribution we make to the International Fund for Agricultural Development is something like 0.4 per cent or so of our overall aid budget, so it is actually a very small part of it. But they wanted to rejoin because they thought it was the right time to do it—and they thought that based on the assessments of the United States and the United Kingdom, both of which have pretty robust governance arrangements over their foreign aid budgets.

If the Conservative government of the United Kingdom is contributing, and if the government of the United States, which gives pretty rigorous scrutiny through the congress, is contributing, it makes sense for Australia to join the fund and it makes sense for us to contribute. We might have a debate about how much we should contribute. That is a debate which should possibly be had in the context of budgets. But, on the question of whether or not we should rejoin, it seems to me to be just sensible to do so at this point. Governments retain the right and ability to influence the conduct of the organisation simply by contributing or not contributing. The previous speaker referred to New Zealand not contributing this year—although I do not know if that action was an attempt to influence the conduct of the organisation or not.

The reasons for Australia's withdrawal in 1984 have been addressed by the fund. The fact that they have more corruption reports results from their new governance arrangements. When you go looking for corruption, you will of course get more reports of it. When you go looking for corruption, you will of course have more prosecutions. The greater the transparency you seek, the more instances you will turn up. That is true of any organisation.

The conclusion of AusAID's report in 2011 was that there was a strong business case for Australia to rejoin IFAD. The reasons given were, firstly, that the work of the fund contributes directly to Millennium Development Goal 1, the reduction of poverty; to goal 3, improving gender equity; and to goal 7, environmental protection. Secondly, the report said that IFAD was seen to be effective, results-focused and providing value for money in the increasingly important rural development sector—and, in my opinion, we do not spend enough on things such as agriculture and rural development in our foreign aid budget. By far the most important thing we can do to improve living standards is to increase farmers' incomes and the surplus they are able to get from their land.

AusAID's report also found that there was:

… close alignment between IFAD and Australia’s priorities for food security and rural development—

and that IFAD offered:

… partnerships in regions and sectors where Australia wishes to expand but lacks deep technical or country knowledge and presence.

One of those areas, obviously, is Africa, where we have large mining interests but where our diplomatic footprint is not large, meaning we are reliant on multilateral institutions to deliver our aid. The final reason given by the AusAID report for Australia to rejoin IFAD was that it offered Australia the opportunity for strong Australian influence and profile. You only get that influence and profile—and the levers to change an organisation—if you join. You have to join. You have to stay in and fight.

I am surprised it has not been suggested in a speech—because it was certainly suggested in the proceedings of the committee and in other places—that this move to rejoin IFAD was part of our bid for a UN Security Council seat. I draw members' attention to paragraph 2.15 of the committee's report:

AusAID in evidence stated that the decision to rejoin IFAD was, to its knowledge, not influenced by Australia’s bid for a non-permanent seat on the UN Security Council.

That evidence was given after consultation. They consulted the United Nations Security Council task force within DFAT and were, in the committee's deliberations, the subject of the probing questions of the member for Berowra.

The committee looked at the reasons that we withdrew, we looked at the business case and we looked at the accountability issues. It was clear that there were governance issues, but it was also clear that they were now being addressed. No-one can predict the future conduct of officials or of an organisation, but, as quoted at paragraph 2.33 of the report, Results International Australia gave evidence that:

Since 2005, IFAD has also implemented an anticorruption strategy, which gives its Office of Audit and Oversight unrestricted ability to investigate complaints and allegations, and also empowers a Sanctions Committee to decide appropriate action where a case of fraud is substantiated. … IFAD also established an Ethics Office in 2011 to investigate and provide guidance on ethical issues for IFAD staff.

Clearly, when you put those corruption-breaking strategies and governance arrangements in place, you are going to get complaints and you are going to do investigations. That helps in cleaning up an organisation and make sure everyone is doing the right thing. There is no organisation which is perfect.

One other issue raised was the location of IFAD programs. We now know that East Asia and the Pacific are receiving some 31 per cent of IFAD allocations—so there has been a change in IFAD's focus. They are more focused on the Asia-Pacific, they are more focused on corruption issues and they are more focused on delivering on their mission statement: to reduce rural poverty and hunger and to work with smallholder farmers who are disproportionately represented among the poor, the vulnerable and the food insecure. This is a worthy goal. I think the organisation, while not perfect, is conceptually a good one. I think they are making progress in making sure that they are an organisation which will safeguard the Australian taxpayers' money being used to achieve their important goal, and I think the government of Australia and the parliament of Australia will have an influence over the running of the organisation, as do the governments of the United Kingdom and the United States of America.

They will also have an influence over whether or not the International Fund for Agricultural Development is a good organisation and whether it fulfils its mission statement. We should not forget that it is a really important mission statement. This is an area that Australia's aid budget should have a greater concentration in, and we can only really facilitate that if we are a part of multilateral organisations, if we are working with others and if we are doing it cooperatively. I think it is a worthy goal. Despite the opposition's refusal to back this bill, if they are in government—I should not pre-empt the election process—

Andrew Laming (Bowman, Liberal Party, Shadow Parliamentary Secretary for Regional Health Services and Indigenous Health) Share this | Link to this | Hansard source

Go right ahead.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I cannot—it is for the Australian people to decide, of course. If they were to take office I think that, despite their objections tonight, they would continue on the path the government has set—and that is to be a part of this very important organisation, to make sure it is delivering the world's poor and to monitor closely its conduct and make sure that it does a good job. I commend the bill to the House.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

I came to the debate on the International Fund for Agricultural Development Amendment Bill largely without any agenda and with little knowledge of the subject matter, and I am persuaded by a different view from that taken by the member for Wakefield. I first emphasise, as the Deputy Leader of the Opposition and member for Curtin did in her remarks, that we support the need for enhanced international responses to food security issues in developing countries. This is not an area in which we are opposed to proper and responsible expenditure. We think our skills and knowledge in agriculture are uniquely relevant to solving many problems with food security in the developing world, but we believe the money must be spent well.

While it is important to note—and the member for Wakefield made mention of this—that IFAD in its funding arrangements of the past did not place much emphasis on funding developments in this part of the world, Australia has nevertheless taken an interest in addressing food security questions in other parts of the developing world such as Africa and that sometimes we have been particularly well-placed to do so. As a member of the Foreign Affairs, Defence and Trade Committee I went to Africa and we visited some projects in Ghana involving Australian aid, and what impressed me was that we were able to see works of the CSIRO, who had developed specific programs for dryland farming. These were regions where dryland farming was unique and it was a matter that had to be addressed, and Australia was in a particularly advantageous position—having similar difficult areas in which to farm—to share that knowledge and expertise.

As far as the opposition is concerned this is not a matter of ignoring food security in developing countries. Our view is that money must be spent well and it must be spent to achieve the best possible outcome in areas in which we choose to target our aid. Sometimes there are differences about targeting. I am one of those who thinks that Australia ought to be targeting more in our region, and I think Europe ought to be targeting more in Africa. North America ought to be targeting more in South and Central America. I think we have particular responsibilities in the Pacific and South-East Asia. We are unique in being able to pursue programs in this part of the world, and we have seen a shift in that emphasis under this government.

One of the points I note is that this is a government decision. The member for Wakefield in his observations put it on AusAID and suggested that this was their initiative. I am not sitting in the government, so I do not know the processes, and I am not sure the member for Wakefield knows the processes. However, I suspect that professional public servants, doing their job and having been asked by the government to support a decision that it wanted, would find reasons for taking the decision. That is what I suspect—professional public servants advancing arguments on behalf of the government of the day. I believe that the government of the day is in a position to rethink this issue. There is $120 million being proposed as an aid expenditure priority at a time when other money is being allocated to building detention centres as part of Australia's aid program. There are issues of priority that this government is addressing, and money taken from aid programs—the government will not tell us precisely where from—is now being spent on immigration detention issues offshore. It is a very important point to note.

I will go through some of the reasons that the decision to withdraw from IFAD was taken in 2004. It was a proper decision because we saw limited relevance in the priorities that IFAD had established, and South-East Asia and the Pacific were not part of its agenda.

We saw a lack of comparative advantage in focus, and we saw shortcomings in management. It seems to me that, if we are to rejoin the fund and spend a significant amount of money, those concerns should have been fully addressed. I do not believe proof has been produced that these problems have been solved.

AusAID officials appeared before the committee, as mentioned by the member for Wakefield, on 25 October, and I asked them this question in relation to IFAD's management:

Do you believe all of those concerns have been addressed?

The AusAID representative said:

I believe that the concerns have been well documented and that we are satisfied that our concerns have been heard by IFAD and substantially acted upon.

I emphasise that: 'substantially acted upon'—not wholly acted upon, just substantially acted upon. They continued:

As per our previous comments, they are not all the way there yet but they are making progress …

My view is that I will look at it when they have progressed it to finality. I asked if they could quantify the progress that has been made, and AusAID said no.

The April 2011 review of Australia's engagement with IFAD identified ongoing challenges for the organisation in terms of human resources and financial management. The report said:

… IFAD is benchmarked worse than peers for some aspects of financial management and administration.

This is AusAID's own review. It also states that, according to the Multilateral Development Banks' Common Performance Assessment System report of 2008:

… IFAD had the lowest disbursement ratio and one of the less satisfactory variances between planned and actual project duration.

The United Kingdom, in its 2011 Multilateral aid review, stated that IFAD's organisational strengths were 'satisfactory', noting high administration costs and the need to improve project efficiency.

As mentioned by the member for Curtin, allegations of fraud and corruption received by IFAD's Office of Audit and Oversight are up from five in 2004, when these matters were being looked at closely, to 41: 25 against external staff, 13 against IFAD staff and three against both external and IFAD staff. Staff misconduct cases involved harassment, breaches of confidentiality, recruitment irregularities and conflicts of interest, with external activities and other fraud on the part of companies and project staff. At the same time, the Office of Audit and Oversight reduced staff numbers.

What I found particularly fascinating was an article by John Phillips entitled 'IFAD chief in expenses furore'. It made the following points:

Felix Kanayo Nwanze, the President of the International Fund for Agricultural Development (IFAD) has instituted spending cuts at the U.N. agency worth an estimated dlrs 2.5 million but has resisted diplomatic efforts to curb his extraordinary personal expenses including rental of a luxurious villa complex on the exclusive Appia Antica, senior officials say.

As Mr Nwanze prepares to present IFAD's 2011 Rural Poverty Report at Chatham House in London in December, senior U.N. officials have expressed concern over the cost of his sprawling Roman mansion set in two hectares of manicured lawns and parkland featuring a swimming pool, gymnasium, soccer pitch and basketball court and garage housing the president's two black BMWs, a jeep and a limousine, with diplomatic license plates.

I could go on; it is worth reading. This is the way in which those who are advantaged in this organisation have looked after themselves. But AusAID, when I asked, 'Have there been any allegations of corruption within the fund,' replied:

Not that we are aware of.

'Not that we are aware of.'

IFAD's 2011 annual report on investigation and anticorruption activitiesstated:

The increased volume of allegations … with the reduced staffing … led to a very high investigation caseload of 59 active cases in 2011 (compared to 49 active cases in 2010 and 33 active cases in 2009).

So the allegations are increasing, but the number of staff looking at these matters is down. The UK's Multilateral aid reviewreport concluded that the likelihood of positive change within IFAD was 'uncertain', saying:

IFAD has a relatively new top management team and although commitment is clear, it is too early to judge impact.

So I think there are very substantial reasons that we ought not to be in front of the pack. The member for Curtin made the point that, when you see that the United States and the United Kingdom are contributing less than we are being asked to contribute and that New Zealand is not involved in these matters all, you have to ask yourself: why is there a hurry to get on board again? The committee concluded that the move to rejoin IFAD was not because of any other interests; it was not related to our bid for a seat on the UN Security Council. The committee came to that view. The AusAID officials denied it was linked—and I think that is probably right; they do the right thing by the government of the day.

What I think is particularly germane to these discussions today and ought to influence people in relation to this matter were the comments by the member for Wakefield, because he said in his observations—notwithstanding the comments made in the dissenting report and by me and by the member for Curtin today—that we should be rejoining this organisation now in order to increase our 'influence and profile'. He did not explain what 'influence and profile' meant, but I think it is not unreasonable to read into those remarks that this is about the Australian government, which wants to have a much larger role internationally, increasing its influence and profile.

Quite frankly, I do not believe Australian taxpayers' funds should be treated in such a cavalier way. When our budgets are under as much pressure as we are being told they are under, to find the funds to re-join an organisation where all the issues have not been fully dealt with—and we have been told that by officials—just to increase our influence and profile I think is a very questionable decision. I would suggest, even at this late stage as the government is planning for a budget, that if they want to put this off for a while it would not be out of character with some of the other decisions they are going to have to take. It would not be unreasonable, and I do not think the Australian public would see it as being unreasonable.

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

It is a particular pleasure to follow the member for Berowra in this debate on the International Fund for Agricultural Development Amendment Bill 2012. My first-ever engagement with a federal parliamentarian was when I was a young volunteer for an organisation called Community Aid Abroad, now part of Oxfam. Community Aid Abroad invited us to visit our federal member of parliament to speak about the importance of foreign aid and why it should be increased. I suspect I was to the left of the member for Berowra even as a whippersnapper, but I do remember him being very good to me, giving me at least half an hour of his time, listening through what I am sure were not particularly well-informed comments about foreign aid and providing some genteel responses about his views on the issue. Those meetings do occasionally come back to me now as a federal member of parliament—thinking about the importance of giving time to somebody who has passionate feelings about an issue even if one might know more about that issue than they do. I use this opportunity to thank the member for Berowra, some two decades late, for his generosity in that regard. It made a mark and it continues to shape my dealings with my constituents.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

Can I interject and say thank you very much.

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

The interjection is greatly appreciated. The topic before the House today is foreign aid and global poverty. As Robert Lucas famously said, once one starts to think about the human welfare involved in these great issues, it is hard to think about anything else. I think it is important in this place that we do not just speak about the quantum of aid, important as that discussion is—and I am pleased to be part of a government which is increasing our overseas development assistance ratio to GNI to 0.5 per cent by 2016-17—but that we also speak about what that aid can do. We are in a world in which the statistics on poverty are staggering—where 1.4 billion people living in poverty and two-thirds of those are in our region. Every day 22,000 children under the age of five die from preventable diseases. Millions live in makeshift camps and gangs in Africa perform acts which are more abhorrent than anything a Hollywood movie producer could dream up.

Australia's aid does make a difference. To take one year's example, in a single year the Australian foreign aid program built 2,000 schools in India, funded a women's crisis centre in Fiji, prevented 8,000 cases of blindness in East Asia and provided clean water to 1.2 million people in southern Africa. World Vision CEO Tim Costello claimed that the Australian aid budget in a typical year saves around 200,000 lives. So we can make a difference. Australia may be a country which contributes only a couple of per cent to the world's economy, but what we do does make a difference.

In my view the Australian aid program should be shaped by the principles of comparative advantage, by thinking about what our aid program can do better than other countries' aid programs. There are three areas in which our country's development assistance program has a comparative advantage over those of other countries. The first is in resource extraction. We are one of the few developed countries in the world with high mineral wealth and have useful lessons to teach developing countries about the effective extraction of those resources in a way which enriches the whole population.

Our second comparative advantage is in dealing with fragile states. The region in which we live has a large number of fragile states. I think the Australian experiences in East Timor and the Solomon Islands stand in stark contrast to other attempts around the world to intervene in fragile states. That is also an important comparative advantage of the Australian aid program.

The third comparative advantage is in dryland farming. Australia's experiences with dryland farming are important for other countries. Our farmers have a lot of experience in good water management, in the selection of hardy crops and animals and the management of seed stocks in environments in which rainfall is volatile. We convey some of that information through the Australian Centre for International Agricultural Research, through involvement in the World Food Program and through the G20's Committee on World Food Security. Our involvement and re-engagement with the International Fund for Agricultural Development is, I think, another way in which Australia's expertise in dryland farming can be conveyed to developing countries.

There is great possibility for bringing millions of people out of poverty through improving agricultural productivity.

The 1960s and 1970s saw a green revolution in which the combination of hybrid seeds, chemical fertilisers, pesticides and herbicides massively raised agricultural output. By one estimate, the green revolution saved a billion people from starvation. Yet today, when Africa should be a net food exporter, it has become a net food importer. African cereal yields are 66 per cent below the global average. Africa is a continent that has one tractor for every 868 hectares, compared with the global average of one tractor for every 56 hectares. So Africa is a place with fewer farm machines than it should have.

There have been some successes. Malawi's agricultural output has increased substantially. We ought also to think about innovative financing models. The economist Ted Miguel has argued that aid agencies should work with developing country governments to provide drought insurance to rural households, allowing them to deal with the volatility that will inevitably come from climate change. There are climate models that predict increased rainfall volatility in Africa's Sahel, the part of the world containing Chad and Niger, where average incomes are less than $1 a day and where people just do not have the financial resources to deal with climate shocks.

Australia has traditionally played a role in liberalising barriers to agricultural trade. It was the Hawke government that set up the Cairns Group of agricultural free-trading nations in 1986, bringing together developed and developing country agricultural exporters in order to bring down the tariffs that stood in the way of agricultural products. There is an international deal to be done in which the United States abolishes its ethanol subsidies and the European Union takes a more science based approach to genetically modified foodstuffs. Those two changes would bring enormous benefits to developing countries which are agricultural exporters.

The member for Wakefield detailed well why Australia has chosen at this point to re-engage with the International Fund for Agricultural Development. We understand that Australia's withdrawal from the fund in 2004 was based on the sense that IFAD was not delivering cost-effective and tangible returns and that it did not have a clear mandate or role. But our view is that IFAD has improved and that there is a strong business case for Australia to rejoin IFAD. Another important reason is that it is to our comparative advantage to do so. If Australia is to be a country that focuses our aid program on the things we do better than other donors then we ought to be involved more in resource management, more in fragile states and more in dryland farming. So it makes sense to re-engage with IFAD.

In closing, I encourage AusAID officials in their dealings with IFAD to urge it to carry out the most rigorous possible evaluations. The randomised trials revolution, which has swept the world of development economics, has its origins in agriculture. Randomised evaluations are known as 'field experiments' because it was in agriculture that they were first tried. Australian farmers since the 19th century have been setting aside two plots of similar soils, trying different seed varieties or a different fertiliser mix and seeing which performs better. But we can do that with our policies too. We can do that with policies that help countries deal with drought assistance, with smarter ways of providing information to farmers and with more effective strategies for seed management. All of these things should be rigorously evaluated, because if we had all the answers to world development we would not have over a billion people in poverty today. I commend the bill to the House and commend Australia's re-engagement with an important organisation to boost us in taking our dryland farming expertise to the world.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

Before I speak in depth about the International Fund for Agricultural Development Amendment Bill, I say that I was interested to hear the member for Fraser talking about Australia's farmers. I think it was the Labor government that shut down Land and Water Australia. Deputy Speaker Scott, you could probably help me with that. It was interesting to hear the member speak about Australian farmers; however, the government has repeatedly, in successive budgets, removed funding from the agriculture budget. Given that Australian farmers are leaders, they need to stay at the cutting edge. The government has not shown them respect through its budget decisions.

In speaking on this bill I acknowledge the contributions by the Deputy Leader of the Opposition, the member for Curtin, and by the member for Berowra. I will not seek to repeat all that was said by those members, but I acknowledge their historic experience in this area, particularly in the previous government, and the very reasoned approach that the member for Berowra took on this issue.

As both of those members have said before me, we will not be supporting this bill. The deputy leader outlined in very great detail that we are committed not only to enhanced food security in developing nations but also to the very great need for prudence and due diligence in committing Australia's foreign aid budget. What we are discussing here is not whether we engage in supporting international food security efforts; it is how that support is delivered most effectively and with the greatest amount of accountability and how we deliver Australia's aid. What is the appropriate use of Australian taxpayers' foreign aid funds, and will it actually make a difference on the ground?

This is a question that IFAD needs to answer about the use of these Australian funds: is it actually making a difference on the ground? That is the sort of assurance, Mr Deputy Speaker Scott, that you and I are seeking in the allocation of Australia's foreign aid budget, particularly on food security.

We understand very well how important food security is. IFAD has failed to address the reasons for Australia's withdrawing from the fund in 2004, so more work is certainly needed there. We have heard that the decision to withdraw from the fund was supported, I think quite tellingly, by the then Deputy Director General of AusAID. He supported it; we know that the review of Australia's engagement with IFAD in 2011 was backed by the Deputy General's assessment. As recently as October 2012, AusAID officials could not assure committee members that IFAD had addressed all of the issues identified in 2004. We were in no better position to evaluate its expenditure, which included human resources and financial management. These are extremely critical issues when you are allocating $126 million of Australian taxpayers' funds. You would have thought that financial management and the effectiveness of the program would have been two critical areas to consider. You would have thought, too, that the government itself would have been concerned by the 2011 desktop analysis of IFAD. It found that IFAD was benchmarked worse than its peers for some aspects of financial management and administration. They are the same issues of financial management and administration as before. I think Australian taxpayers would, rightly, be very concerned about both of these issues.

Issues about IFAD's high administration costs and the need to improve its project efficiency were also raised in a UK review. Why is the Australian government, which is responsible for directing these funds to IFAD, not concerned that, since Australia's withdrawal from IFAD, the number of allegations of fraud and corruption received by IFAD's Office of Audit and Oversight has increased from five in 2004 to 41 in 2011? I do not think it is an issue that we should be taking lightly. The Australian government should be treating this far more seriously than it is. We are not talking about a small amount of money; it is not a small amount of foreign aid. We are talking about $126.4 million of taxpayers' funds over four years. We heard the member for Curtin speaking about the fact that this is more than the United States, the United Kingdom, Canada and Germany are committing to this program.

The Joint Standing Committee on Foreign Affairs, Defence and Trade reviewed this issue, and the coalition members of this committee, in their dissenting report, noted AusAID's lack of awareness of the fraud and the corruption relating to IFAD. AusAID's lack of awareness should concern government and taxpayers in general. What bothers me is that the government, in presenting the bill, does not appear to be concerned about the fraud and corruption either. This raises some very serious questions for members on this side of the House. The coalition certainly understands the need for a well-managed international response to food security in developing countries. That is not the issue. As I said earlier, the issue is how we deliver Australia's aid, what the appropriate use of taxpayers' funds is and whether those funds will actually make a difference on the ground, where they are to be expended.

All of us in this place know that, when we were young, we were taught that the basics of life were essentially food, clothing and shelter. This probably seems a bit simplistic in today's world. I think if you spoke to a number of young people of the current generation they would probably consider their mobile phone and perhaps internet access and a range of other appliances to be their priorities. But much of the world, as we know, continues to be short of the very basics of life.

The funding mechanism for IFAD was a commitment of US$6 billion from the establishment of the fund in 1977 to this year. Nations from around the world have contributed payments in eight tranches, and $5.7 billion will be delivered in August this year. The next call, the ninth tranche of payments—referred to as the ninth replenishment—is an additional US$1billion. I assume that the Australian contribution being requested through this bill will be part of that ninth replenishment. Mr Deputy Speaker, Australia, as you know, was a founding member of the International Fund for Agricultural Development in 1977 and it remained in the scheme until 2004, when very serious questions and issues were raised about the scheme's effectiveness. The coalition believes that hard-edged evaluation and accountability are still missing in the scheme but are definitely very essential. We do have a responsibility to taxpayers to ensure that the parliament makes the best use of Australia's foreign aid dollars.

We know that there are various reasons for food security challenges around the world. In some countries, it can be a result of corruption; it can be a result of a lack of governance. In some cases, it is not an agricultural problem, but in other cases it is. In some instances, it is about drought and long-term issues with the local climate. However, often they are issues that are put in the too-hard basket. The primary requirement for food security in some countries is not necessarily oil or water but competent and open government; in others, it is a lack of sufficient natural resources to produce adequate food for their local population.

As I said at the outset, we are not arguing, certainly, about the need for enhanced foreign aid to deal with international food security issues in developing nations. What we are talking about is how this aid is delivered and whether, in effect, we are making the most appropriate use of taxpayers' funds in our foreign aid budget.

Debate interrupted.