Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I present the 132nd report of the Joint Standing Committee on Treaties, Treaties tabled on 18 September and 30 October 2012, and move:

That the Senate take note of the report.

Three of the treaties examined in this report deal with Australia's relationship with international financial institutions: the African Development Bank; the African Development Fund; and the International Monetary Fund. The treaty establishing the African Development Fund and the treaty establishing the African Development Bank were considered together by the committee. Ratification of these treaties will result in Australia becoming a member of these institutions.

The African Development Bank is one of four multilateral development banks. Australia is already a member of two of these banks, the Asian Development Bank and the European Bank for Reconstruction and Development. The multilateral development banks have broad memberships encompassing both borrowing developing countries and donor developed countries. Membership of these banks is not limited to the regions in which the banks are based. Many OECD countries are members of all four banks.

The African Development Bank's objective is to support the economic and social development of African countries by promoting investment in projects that reduce poverty and improve living conditions. The bank works by mobilising both African and worldwide resources to invest in African economic development. Resources are usually provided through partnership arrangements between the bank and other development agencies.

The African Development Fund is a subsidiary of the African Development Bank, formed to provide low-cost loans for projects with long-term maturities or non-financial returns such as roads, education and health. Membership of the fund is a prerequisite for membership of the bank. Australia will be seeking to join both institutions at the same time. The committee was assured that the bank's and the fund's interests are parallel to Australia's international development interests. The bank's and fund's priorities are well aligned with Australia's aid programs' strategic goals as set out in Australia's Comprehensive Aid Policy Framework. The cost of membership of the fund will be about A$165 million over eight years. Bank membership is likely to cost between A$46 million and A$92 million over the same period.

Unlike the common perception, many African countries are, on the whole, dynamic, modern and stable. The committee also notes that many of Australia's competitors from North America, Europe and Asia have been bank members for some time. The committee hopes that ratification of these treaties will ensure that Australia forms a close relationship with African nations.

The report also contains the committee's consideration of the loan agreement between Australia and the International Monetary Fund. Australia has been a member of the IMF since 1947 and shares the IMF's interest in promoting international monetary cooperation, facilitating trade and contributing to employment growth, and assisting member states in financial difficulty. The recent financial crisis precipitated by the collapse of the United States housing market has resulted in a significant drain on the resources of the IMF. The agreement's purpose is to temporarily increase the IMF's resources for crisis prevention by making available approximately A$6.8 billion for the IMF to draw on if needed. The agreement is the first such arrangement entered into by Australia. Under the agreement, any funds drawn by the IMF will be repaid with interest. The committee agrees that Australia has an interest in ensuring that the IMF is adequately resourced to assist member states in financial difficulty, and consequently supports ratification of the treaty.

There were two other agreements between the Australian government and the government of Japan. Again, the committee was of the view that they should be entered into.

I commend the report to the Senate and I seek leave to continue my remarks later.

Leave granted; debate adjourned.