Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

To the crowded galleries I say thank you for coming along to listen to this address on the Asian Development Bank (Additional Subscription) Bill 2009! The coalition supports this bill. The bill proposes to allow the government to increase the number of shares that Australia holds in the bank. The ADB is raising capital and has offered its members the opportunity to increase their shareholding. On 2 April 2009, the G20 leaders meeting agreed to a 200 per cent general capital increase for the bank as part of its US$850 billion commitment to support growth in developing countries. On 29 April 2009, the ADB Board of Governors resolved to raise capital by allowing its members to increase their shareholdings. The board’s aim is to triple the ADB’s capital, which they will achieve if all their members take up all the shares on offer. Members can buy additional shares in proportion to their current subscription. Australia currently owns 5.7 per cent of the total number of shares. As such, we are entitled to buy just over 409,000 additional shares: 16,379 paid-in shares and 393,101 callable shares. In layman’s terms, paid-in shares are normal shares—the stake in the bank. Callable shares service security for the ADB’s borrowing on world capital markets. The bank has never drawn on its callable capital and is not likely to do so.

In the 2009-10 budget the government announced it would purchase US$197.6 million, the equivalent of A$241 million, of additional shares in the bank over 10 years and draw on US$5.6 billion, the equivalent of A$6.8 billion, of callable shares. The additional shares are a capital measure in the 2009-10 budget and do not impact on the underlying cash or fiscal balance. The additional callable shares appeared in the statement of risk as a contingent liability.

This bill will continue Australia’s very important work with the ADB to develop our region. The ADB was established way back in 1966—well before the minister at the table, the Minister for Early Childhood Education, Childcare and Youth, was born and in the year after I was born. The ADB is a international development institution which works to foster economic growth and cooperation in the Asia-Pacific region. It works with its members to develop them on both an individual level and as a group of interconnected nations. Australia was one of the original 31 members of the bank along with the United States, Japan, New Zealand, China, Canada, Germany and the United Kingdom. There are now 67 members both inside and outside the region, including Brunei, the Cook Islands, Portugal and Luxembourg.

To digress for a moment, I recall attending an AGM of the Asian Development Bank in Manila in maybe 1999 or 2000, which was quite an experience. I learned a lot about the ADB and the good work it does in different parts of the region. It does work with individual countries, the private sector and non-government organisations and it uses its AAA credit rating to finance projects in agriculture, education, health, law, governance, transport and communications. The ADB funds training programs in public policy, water management, transborder animal disease control, customs and quarantine, and ADB consultants provide technical advice on important energy projects, road construction and attempts to deal with severe air pollution in different parts of Asia. ADB loans are also made available for infrastructure, while grants allow education and immunisation to take place.

I think the House will be interested to hear about some of the ADB’s projects. One example of its worthwhile projects is a public policy training program in Cambodia, Laos and Vietnam. These three Asian countries have moved from planned economies to market oriented economies in the past two decades. How ironic it is that this current government wants to take us back to a planned economy from a market oriented economy, whereas the ADB is actually funding the movement from planned economies to market oriented economies. However, that is one of the reasons why we are supporting this bill. The ADB supports the transition of those three key countries with US$17.8 million for training programs for senior civil service officials.

Another example is HIV prevention. As we know, the countries in South-East Asia are improving their transport infrastructure and, while this is good news for trade, it brings with it social and health issues such as the spread of HIV. The ADB has provided US$6 million to tackle this problem. Recently, I was in Africa and witnessed firsthand how severe the impact of HIV is in Tanzania, Uganda and Botswana—throughout the entire African region. One of the reasons that it is spreading so quickly throughout Africa, and why it has already spread so quickly, is improved transportation between countries. In Tanzania, I met a family whose members were all HIV infected. That was in Arusha, which is regarded as the middle point, the meeting point, of Africa. Tanzania, I think, has seven countries on its borders and it is a horrific problem.

I must say I am digressing a bit, but the West has some responsibility in this. Some of the feedback I got was that, in an attempt to provide birth control measures in Africa, the West provided, for example, condoms that were out of date. That was as part of a so-called aid project. All that did was to completely undermine any confidence locals had in the quality of contraception. Obviously it made the spread of HIV worse by removing any confidence in the prophylactics that were offered. So the ADB’s work is very important in our region and if we can do some heavy lifting in our region then we will be doing good work.

As a third example, there was another health project to prevent and control avian influenza. We all remember the pandemics of the last few years, including of course bird flu. The ADB is providing US$25 million to fight the spread of the H5N1 virus among birds and to improve the region’s preparedness to tackle human influenza outbreaks. Obviously we have fears about the upcoming northern winter.

So there are a number of reasons why the coalition supports this bill. First of all, Australia plays an important role in providing both funding and expertise for the bank’s projects. The majority of the bank’s contracts are awarded through an international tender system which is open to companies and individuals from any member country. In 2008 Australia’s contracts for goods and services were worth $3½ million and contracts for consulting services were worth $32½ million. There are a number of Australian companies which have worked with the ADB in recent years, including HSBC Bank Australia, Flinders University, Sinclair Knight Merz and the Australian ITA Consortium. Australia has also recently co-financed projects in the areas of road assessment management in Cambodia, HIV-AIDS prevention in Papua New Guinea and hydro-electricity in Laos. As at 31 December 2008 there were 49 Australian professionals working at the ADB.

When the coalition was in government we made significant contributions to Australia’s place in the Asia-Pacific region. The most noteworthy economic contribution of the Howard government to our region was our action during the Asian financial crisis of 1997. We were one of the first countries to offer assistance to countries in distress in Asia, and Australia as a result became an important regional player. We provided $3 billion of currency swaps and loan facilities to South Korea, Thailand and Indonesia through the ADB. By doing so we were able to engage these countries in the economical reform that has helped them to develop.

The Howard government acknowledged that the Asia-Pacific region is integral to Australia’s future. We recognised that its development directly affected us as a nation in a number of ways, including, of course, in trade and security. The coalition government successfully managed regional partnerships during the very difficult move to independence by East Timor in 1999. We managed through that difficult period to maintain and in fact improve our relationship with Indonesia, our closest neighbour. We successfully maintained our relationship with China, a most important trading partner. I think that has been lost in a lot of the debate recently. Japan is unquestionably our most important trading partner, but that does not mean that we should in any way exclude the emergence of China or the emerging relationships with others in the region. We successfully identified one of those with the growing international trade associated with India, an emerging economy that is going to be a significant player in global commerce over the next 50 years and beyond.

Seven of Australia’s top 10 export markets are now in the Asia-Pacific region. They are, in order: Japan, China, the Republic of Korea, India, Singapore, Taiwan and Thailand. The export revenue for goods and services to these countries in 2007-08 was over $118 billion, from Australia’s total export revenue that year of $232 billion. This gives you an idea of the significance of the relationship between our economies. Added to that of course is the trade activity with our other regional neighbours, which widens the mutual benefit. In terms of security, development in the region will reduce Australia’s risk of being a target for terrorism, illegal drugs and people-smuggling. While these are, of course, criminal acts, they have a very strong link to poverty, weak border protection and corruption—three problems that have plagued the region.

If I can digress again for a moment, I would like to say that corruption remains the terminal cancer of democracy. Whether it be in other countries or even in our own, corruption is evil. It is a threat to every single person’s rights and freedom. I say that vigorously, coming from the state of New South Wales. I know this is not particularly related to the bill, but I am desperately concerned about the state of New South Wales. It is very hard for us to undertake international activity to fight corruption when there may be corruption in our own backyard. I think there is a long way to go in New South Wales in cleaning up the state—not that that is a surprise, I think, to anyone in this place.

The Howard government recognised when the coalition was in office that it is in everyone’s interest to support development to combat structural challenges like corruption, terrorism and so on. The coalition still believe that—we believed it in government and we believe it today. That is why we are supporting this bill. I think it should be noted that today is in fact the first anniversary of the collapse of Lehman Brothers. I was fully expecting a debate in this place today initiated by the Treasurer in relation to that matter, but obviously the Treasurer has given up debating me these days. So I would just make this point, because this ADB bill, just to satisfy the government members at the table, is a direct result of the global financial crisis so I am in perfectly in order—

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