Wyatt Roy (Longman, Liberal Party) Share this | Hansard source

I rise to speak on the Asian Infrastructure Investment Bank Bill 2015. I think the previous speaker made a very articulate defence of why we should support institutions like the Asia Infrastructure Investment Bank, but I wish that members opposite would apply that same logic to the free trade agreement that this government has sealed with China. I think this will lock our two nations together in a pathway towards future prosperity. If the logic of the previous speaker could be applied to all members when it comes to that agreement, I think that our country's future prosperity could be assured.

I have spoken many times before in this place about our nation's changing economic profile, about the need to look beyond the farm gate or the mine head, if we are to continue the trajectory of almost a quarter of a century of uninterrupted economic growth. Critical to the new order is that our country's future economic prosperity will depend on our relationship with an emergent Asian middle class of more than a billion people. They will want to buy our goods and services, so it is imperative that we are opening ourselves to those markets and cultivating access for our exporters.

However, for the Asia-Pacific region to become fully realised as the 21st century's economic powerhouse, one glaring deficiency must be not only addressed but prioritised. There is an acute shortfall in the region's funding reserves for major infrastructure. It is estimated to be as much as $8 trillion.

With this bill, Australia openly declares its hand—to lend a hand. We want to see the Asian economy get the fiscal injection it needs in order to grow. We want to create opportunities for the region—and by extension, for Australia—through helping to fund transport, energy and water infrastructure; by investing in Asian ports, logistics, environmental protection, information and communications technology and agriculture.

The reason is plain, unavoidable reality as much as any strategic drive. The current nexus between Australia's prosperity and economic growth and that of Asia will intensify to an almost unbreakable bond. A stronger Asia will underpin a stronger Australian economy. Infrastructure development in the region will provide greater opportunities for our businesses and will increase demand for our services and commodity exports. Ultimately, a deeper relationship with a better equipped and more productive Asian economy means more jobs for all Australians.

This bill represents a significant step in mapping out that future, by enabling Australia to become a founding member of the Asian Infrastructure Investment Bank, which is expected to be up and running by the end of this year. This is a global multilateral initiative with more than 50 member nations involved. China is the largest of the bank's shareholders, with a 30.34 per cent stake. Australia will have the sixth-largest share. Our contribution of about $932 million in paid-in capital to the AIIB over five years has been determined only after extensive due diligence and satisfaction that the bank will be based on world's best practice.

The membership has drawn widely from inside and outside Asia, from South Korea and India to France, Germany and the United Kingdom. We are in very good company. While there have been some reported concerns around governance, we have not joined the newest international bank on the block lightly. All members will absolutely be involved in the bank's direction and decision making. Transparency will be key.

The construction of new ports and railways in AIIB member countries such as India, Indonesia and Korea will mean Australia's exports can reach new and expanding markets. Building a coal unloader at an Indian port will create extra capacity for Australian commodity exporters. Constructing a new railway in Indonesia will help shift Australian wheat and beef to that market. The bank will also build roads and construct telephone and internet lines, among a shopping list of infrastructure improvements.

I am in no doubt that the AIIB will fuel demand for services, which take up an ever-increasing share of our export market and, as such, our national wealth. In particular, we will see demand grow for the expertise we can offer in engineering, construction, management, finance and consultancy. Currently the service sector represents 80 per cent of our domestic economy but only 17 per cent of our exports. Free trade agreements recently sealed by the coalition government will allow those service industries the unprecedented access to overseas markets that they need in order to grow. That includes the landmark free trade agreement with our biggest trading partner, China—an agreement that is now built upon by Australian and Chinese founding membership in the Asian Infrastructure Investment Bank.

With the tapering of demand for our resources and the swelling middle class of our Asian neighbours, services and experiences can become the powerhouse industries exporting to our region and employing our citizens. I am resolute in my conviction about this. No greater opportunity exists than in the tech space. If Asia is to forge, through AIIB investment, massive improvements in communication networks, we need to be there to capitalise on the explosion in innovative industries that will surely occur. We need to seize this moment now. For our economy's future health—and I believe it is as stark as that—we need to foster a start-up ecosystem of innovation which supports the next generation of entrepreneurs. Developing it will take a co-ordinated approach across government, the higher education sector and capital investment, and will involve a real cultural shift in this country.

ABS data underscores how a new approach is needed by government to reverse a trend against risk and entrepreneurship which is particularly worrying for young Australians. In 1997, nine per cent of employed Australians aged 15 to 34 owned their own business. By 2013, the number had diminished to 8.3 per cent. But in the right environment young Australians will find the confidence to start their own businesses, grow the economy and create thousands of new jobs. The nation has the fundamental components, with deep reserves of young, bright, talented Australians and other young international entrepreneurs set to be lured by our unique lifestyle.

Finally, we are perfectly placed at the heart of a growing Asia—which is the focus of this bill—to become an epicentre of global entrepreneurship. The startup economy, the PricewaterhouseCoopers study commissioned by Google Australia, showed that high-growth technology companies could contribute four per cent of GDP, or $109 billion, and add 540,000 jobs to the Australian economy by 2033 from a base of only 0.2 per cent today. In a recent speech to the Australian Institute of Company Directors, CSIRO chairman and former Australian of the Year, Simon McKeon, spoke passionately about a new innovation culture that should permeate business and government. He encapsulated it as an essential change in mindset, attitude and culture.

While entrepreneurial spirit has always been accepted in Australia, now it needs to be championed by government, which must step up as part of a collaboration with business, science and education. Our Chief Scientist, Ian Chubb, agrees, pointing out that while Australia has the same proportion of research scientists per capita in the workforce as the United States, only a third of them are in the private sector. In the US the opposite applies, with a premium in innovation, commercialisation and entrepreneurship. In Israel we see what is achievable. A small country under constant threat with no natural resources, it produces more start-up businesses than Japan, India, Korea, Canada and the UK, and it claims more companies on the NASDAQ than Korea, Japan, Singapore, China, India and all of Europe combined.

Successful governments stir an infectious entrepreneurial spirit, building direct partnerships with the private sector that attract capital for the commercialisation of great ideas. Put simply, they have made it as easy as possible to start and run a new business. The Asian Infrastructure Investment Bank will show us what is possible, for it will work to the very same principles: harnessing private sector investment and cofunding projects with other development banks and private sector financiers. As the Treasurer enunciated in his second reading speech, this is not a development bank but a bank that funds development. Australian companies will be able to bid for AIIB financed projects as the bank will have an open procurement model. But while it is vital investment, our AIIB commitment will not come at the cost of other government spending. There will be no direct impact on the budget bottom line.

Nobody can deny that Australia will face many challenges in the future. However, I believe we should also be infinitely optimistic about our potential for prosperity, not because of the resources we have in our ground but in light of the innovative capacity of our people. If we embrace our cultural heritage of 'having a go', if we look not in but out to our regional neighbours for the prospects of growth—theirs and ours—we will, as the new Asian middle class rises, be in a position to meet its demand for our food, education, health and innovative and entrepreneurial services. Our Asian neighbours will see doors open as a result of new and enhanced infrastructure across the region. They will walk through them to us. They will want to travel here and invest in our services. Their prosperity is our prosperity. That is the future, which is why I wholeheartedly support our membership of the Asian Infrastructure Investment Bank and this bill to implement our obligations under the bank's articles of agreement. I commend the bill to the House.

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