Bob Sercombe (Maribyrnong, Australian Labor Party, Shadow Minister for Overseas Aid and Pacific Island Affairs) Share this | Hansard source

I join the member for Fisher in commending the member for Kingsford Smith for bringing on a discussion of this important matter. It is appropriate to discuss this issue, particularly at a time when matters relating to the quantum of developed countries overseas development assistance are very much on the agenda, and also the issue of the effectiveness and the priorities that that development assistance reflects. Increased levels of and more effective development assistance are vital not just because it is the right thing—the moral, ethical thing—for the developed world to do but because it is overwhelmingly in our interests as well. As the Secretary-General of the United Nations, Kofi Annan, has remarked, you cannot have development without security but, equally, you cannot have security without development. In a world where many hundreds of millions of people live in grinding poverty, the question of global stability and global security is very much in the balance.

It is in this context that issues such as microcredit are critically important—because, as the member for Fisher and the member for Kingsford Smith have already indicated, microcredit works. It works at very localised levels where individuals, families and communities with access to small amounts of credit are able to do things like sow crops, pay for their kids to go to school or capitalise microbusinesses—all things that are preconditions for sustainable reductions in poverty. Microcredit is critically important in those respects.

But, as indicated by the member for Kingsford Smith, despite the comments of the member for Fisher, Australia really lags dramatically in this area. Only some $14½ million in the 2005-06 aid budget was committed for microcredit schemes. This represents about 0.6 per cent of Australia’s aid budget. That compares with the international benchmark set by the United States of 1.25 per cent, which is more than double Australia’s contribution in percentage terms as well as being dramatically larger in real and absolute terms.

In a discussion paper that the member for Kingsford Smith and I were involved in launching earlier this year, Labor put forward a proposal for a Pacific development trust. Such a trust would engage the private commercial sector and non-government organisations along with governments—both the Australian government and Pacific island governments—in systematically addressing the question of access to credit in our more immediate Pacific neighbourhood. That is critically important. I am pleased to say that, since we have launched that paper—in fact, in June this year—an organisation called Microfinance Pasifika Network has been launched. That organisation is involved with not just advocacy but also the promotion of new technology for delivering credit, as well as innovation and best practice for addressing the unique needs of the Pacific region.

A number of Australian commercial enterprises are involved in this network, in particular the Westpac Bank and the ANZ Bank. This network now desperately needs the engagement and commitment of the Australian government—from the very measly base that the Australian government has established in this area—to take things forward. In this context, I particularly want to commend the ANZ Bank, under the chairmanship of Bob Lyon, which has shown extraordinary innovation and capacity in terms of addressing the rural banking needs of many parts of our Pacific neighbourhood. It is a pity that the Australian government is not backing up what until now essentially has been a private sector enterprise in order to really start producing much better outcomes in our own Pacific region.

Other speakers have referred to a more broad based Asian approach to this matter—for example, as with Bangladesh. In March this year, in Beijing, the Asia Microfinance Forum attracted nearly 300 participants. They heard of some very exciting and innovative ways in which not just financial benefits but also technological leading edge stuff can be delivered to developing countries. For example, they heard about a telecom company in the Philippines which has turned mobile phones into electronic wallets to handle remittances, donations, loan settlements, salary credits and bill payments via text messages. This is the sort of innovation that developing countries require and it needs to be translated much more actively into our more immediate Pacific region. However, there are areas where, as I have said earlier and as the member for Kingsford Smith has said, the Australian government is badly lagging. (Time expired)

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