Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Hansard source

I am delighted to get up to support this legislation. We on this side very much welcome this deal and we welcome the government's support for the c. Sadly, it comes a little late in the day. In fact, on 31 October last year, Labor put out a press release saying:

Labor believes Australia should be actively engaging China on its proposal for an Asian Infrastructure Investment Bank.

Of course, governance and transparency arrangements, as well as environmental, social, and labour matters will need to be worked through.

There is an enormous need for increased infrastructure investment in the Asia Pacific, and we welcome additional investment from China.

The real mystery of this is the fact that we did not sign up earlier. Of course, it is important for transparency and governance arrangements to be clarified, but 27 nations in our region signed up before we managed to, because they were able to reassure themselves on exactly the questions we had.

Australia needs to be a strong advocate, I believe, for room to be made for China in the architecture that was developed after the Second World War for making decisions on issues between states—the relationships between states. If the institutions that were established after the Second World War cannot be flexible to see the changing economic weight of countries in our region, I think there is a role for Australia to advocate for those changing economic relationships to be recognised.

China has sought and failed to gain a role in the existing architecture that is a little bit more commensurate with its very fast-growing economy. Although China has the second largest economy in the world, by some measures perhaps the largest economy, it holds only 3.8 per cent of the voting shares of the IMF. That is less than one-quarter of the voting shares the United States has and just over half of the shares that Japan has. Of course, the IMF has made an effort to change this, but it has been frustrated by the US Congress refusing to pass reforms around the IMF. Naturally, it would be better, I believe, for China to have been part of one of the larger global institutions like the IMF or the Asian Development Bank in a more substantial way. If these organisations are not able to adapt to China's willingness and desire to be a greater investor in infrastructure in the region, then you see what happens—there is in fact a new body established by China. China could have got a loan; it could have just made bilateral arrangements with countries and become a supporter of infrastructure development in countries bilaterally. Instead, it has chosen to go down the route of the Asian Infrastructure Investment Bank, and I think it is better for China to be part of a multilateral institution like this. It is critical that the Asian Infrastructure Investment Bank lives up to the aspirations that it set for itself, to be 'Lean, clean and green': to be efficient, to be corruption free and to be environmentally responsible. Australia's involvement with the Asian Infrastructure Investment Bank certainly allows us to make sure that these goals are being pursued and are being met.

The Asian Infrastructure Investment Bank will play a very important role in reducing the infrastructure gap that so many institutions and individuals have identified. In 2009, the Asian Development Bank found that Asian countries will need to invest $8 trillion domestically between 2010 and 2020 just to keep pace with their expected infrastructure needs. Of that investment, 68 per cent would be for new capacity. According to the ADB, when you break that down by sector, 51 per cent of the investment would be for electricity, 29 per cent would be for roads, and 13 per cent would be for telecommunications. A further $300 billion would be needed for regional infrastructure construction. The infrastructure investment is crucial to keep the global economy strong and growing, and to prevent what the G20 has identified as a potential infrastructure gap of tens of trillions of dollars that could potentially cripple emerging and developing countries and reduce the pace of growth.

The Asian Infrastructure Investment Bank has the potential to boost infrastructure investment in our region by more than $100 billion. That is why, for many months, Labor has been calling for the government to become involved in the AIIB. We supported Australia's involvement from the very beginning, not just so that this funding would be released but also so that Australia could have a greater say in the governance mechanisms and transparency and environmental objectives of the bank.

Of course, it is not just Labor that has been calling for this in the Australian context. The previous speaker mentioned a number of business groups that called for Australia to be involved in the AIIB. There are also a number of academics. For example, Andrew Elek of the Crawford School of Public Policy at the ANU says:

This new development bank can help fill the vast unmet demand for productive economic infrastructure …

…      …      …

All Asia Pacific governments should welcome the initiative to set up the AIIB and the opportunity to participate in it.

Another academic, Peter Drysdale of the ANU's East Asia Forum, said:

It is a wrongheaded idea that China can be contained from participation in multilateral development finance …

…      …      …

Ironically, there was the same hesitation when Japan moved to establish the ADB in the 1960s. There should be none now. If these countries—

he is referring in this instance to Australia, Canada, Japan, Korea and New Zealand—

do not engage China on these positive initiatives they both stand to frustrate entirely positive regional and global economic outcomes and lose the opportunity forever to shape the terms of China's regional and global engagement. In so doing, they would be choosing to act against their national and collective regional interests.

We say that the announcement made by the government that Australia will be involved in the AIIB is welcome. We say that the $930 million paid in capital with a further commitment of $3.7 billion in callable capital is welcome. As a party, we certainly believe in the importance of multilateral institutions and regional and international cooperation. We say that our involvement as a nation of 20-odd million people gives us the ability to shape those institutions in a positive way. You saw our willingness, and indeed enthusiasm, for this type of engagement from the very early days of the founding of the United Nations, where it was Labor's view that we should shape it to be more than a club for the powerful nations; in our campaign for Australia to have a seat on the UN Security Council, which you will remember, Mr Deputy Speaker Kelly, your own party was very opposed to; and in seeing the potential for the G20, rather than the G8, to become the world's most significant economic forum. So I say again that we welcome our participation in the AIIB. We are very sorry that it has come after so much dithering and infighting. We were shocked in one sense when reading the leaks from cabinet about the foreign minister doing her very best to stop Australia signing up to the AIIB, but it is good to see that that position has been overcome by other more sensible ministers in the government. I believe the Treasurer is a supporter of the Asian Infrastructure Investment Bank.

As I have said, it is very disappointing that 27 nations in the Asian region signed up to the AIIB before Australia did. We know that the Chinese economy's links with Australia are very important to our future prosperity. We need to look at what China is saying about not just the size, the scale and the speed of its economic growth but the character of its economic growth and what opportunities that provides for Australia in the future. The Chinese government has spoken at some length about the new silk road and the maritime silk road, which in many ways will reshape the economy of our region—and the economy of the world. In November 2014 Xi Jinping announced plans to create a $40 billion US development fund for the silk road. The annual trade volume between China and the countries along the routes that he has described may surpass $2½ trillion dollars within the coming decades. It is not just the size of this growth that is important; it is the changing character of the growth. The third plenum of the CPA said in 2013 that the Chinese economy will change to provide markets with a much greater role, and administrative reforms to enhance effective governance and greater judicial independence will be supported. We are seeing the effects of those changes, announced at the third plenum, in the character of Chinese economic growth.

When China considers how it will grow it thinks not years ahead but decades ahead. It is one of the shortcomings of our system of government that we get very caught up in the day-to-day and the week-to-week and perhaps the month-to-month—

See this speech in context