Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The purpose of this bill is to simplify the process for Australia to accept agreed amendments to the articles of agreement of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, commonly known as the World Bank.

The International Monetary Agreements (IMA) Act 1947 established Australia’s membership of the IMF and the World Bank.

Articles of agreement of the fund and bank are schedules to the act.

The bill proposes to alter the definition of the IMF articles of agreement (fund agreement) and the definition of the World Bank articles of agreement (bank agreement) to include any amendments of the relevant articles of agreement that enter into force for Australia without the need for further legislative changes.

Similar provisions are commonly used in Australian legislation to allow updates to international treaties to which Australia is party.

Currently, an IMA amendment act is required to reflect any amendments to the fund and bank agreements.

However, this legislative process is largely an administrative task, as all proposed amendments are required to go through rigorous approval processes at both the institutions and within Australia.

This bill also does not alter the way in which Australia’s financial relationships with the IMF and World Bank are conducted.

The Treasurer, as Australia’s governor of the IMF and World Bank, is required to vote on any proposed amendments to the articles of agreement of either institution.

For the amendment to enter into force, three-fifths of all members of the IMF or World Bank, having 85 per cent of total voting power, must accept of the amendment.

If accepted, the amendment enters into force for all IMF or World Bank members, whether or not a particular member has accepted it.

The agreements constitute international treaties for Australia and, as such, irrespective of the requirement for legislation, any amendments to the treaties will still require tabling in parliament and consideration by the Joint Standing Committee on Treaties.

The bill will allow Australia to accept a number of governance reforms, which have recently been approved by the IMF and World Bank boards of governors, when they enter into force for all members, including Australia, without the need for further legislative processes.

Specifically, these amendments aim to enhance the voice and participation of developing countries in the two institutions and support a new income model for the fund aimed at providing it with a more robust, stable, and sustainable income base.

The Treasurer, as governor for Australia of the IMF and World Bank, voted in favour of each of these proposed amendments.

Australia has a significant interest in seeing these reforms implemented as they will enhance the effectiveness and legitimacy of both institutions, and support the robust, stable and sustainable financial position of the fund.

Given the current G20 reform agenda, which includes calls for reform of the IMF and World Bank, it is likely that further amendments to the fund and bank agreements will occur in the future.

This bill will allow for Australia to adopt the recently agreed reforms, as well as any future reforms, which require amendments to either institution’s articles of agreement, in an efficient and timely manner while maintaining policy and parliamentary oversight.

Further details of the bill are contained in the explanatory memorandum.

I commend the bill to the House.

Debate (on motion by Mr Wood) adjourned.