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

The International Monetary Agreements Amendment (Financial Assistance) Bill 2009rather a mouthful—extends the current arrangements that we have with the International Monetary Fund to include the World Bank and the Asian Development Bank. Under this bill the Treasurer will be permitted, as he is now in relation to International Monetary Fund programs, to lend money or enter into currency swaps with a country where at least one other country or organisation has provided or intends to provide assistance to that country in connection with a World Bank or an Asian Development Bank program. The amendments are therefore closely based on provisions already in the act that cover the IMF.

The primary purpose of this bill is to allow Australia to enter into a loan with Indonesia for $1 billion. This was announced by the Prime Minister on 10 December last year. This $1 billion loan will form part of the World Bank led package to assist Indonesia through the current global economic downturn for the calendar years of 2009 and 2010. My understanding is that the loan has not been activated yet; it is a standby facility. However, it can be activated if certain criteria are met. The coalition support this legislation because we undertook similar activities in the past when we were in government. During the Asian financial crisis it was entirely appropriate to provide emergency assistance and support to our Asian neighbours during very difficult times. We did that in 1998 when we amended the International Monetary Agreements Act in response to the Asian financial crisis.

Economic stability in our region helps with political stability. That is why we need to take a responsible approach as a good regional neighbour, particularly with our closest neighbours. Indonesia—a country I have been to on a number of occasions—is a very important strategic friend of Australia and it is important that we undertake this sort of support. Of course, we do it not alone but in conjunction with international financial institutions such as the IMF, the World Bank and the Asian Development Bank. It is part of a coordinated approach.

Australia obviously has the capacity to do this. As a nation we are in reasonably good economic shape today—certainly very good shape compared with other nations—because when we entered into the global financial crisis we had money in the bank, no net debt, surplus budgets and a low unemployment rate of around four per cent. It is easy to lend money to others in need when you yourself have a surplus of money. It is much harder if you are lending money and you need to borrow it yourself. I make the point that there is some irony in the fact that we are borrowing money to fund ourselves to lend money to other nations. Australians will understandably ask the question whether it is a good idea for us to be in the business of borrowing money to fund our day-to-day activities, which is what the Rudd government is doing, and at the same time lend money offshore—whether it be $1 billion through this initiative to Indonesia or $10 billion to the IMF potentially going to eastern Europe. Australians are rightfully entitled to ask the question: are we now in the business of borrowing money to lend money?

After all, didn’t the whole global financial crisis start with individuals borrowing too much money and with banks lending too much money? Isn’t that how it all started? Now it is simply the case that governments have become substitutes for the private sector in borrowing lots of money. Ultimately, whether it be the private sector or the public sector, if you are borrowing money someone has to pay it off. Let us be frank about it: it all comes down to the same person—the taxpayer. Whether it be a taxpayer repaying a debt to the bank or a taxpayer paying increased taxes for fewer services to the government, if money is being borrowed it has to be repaid. When we as a nation are in the position of borrowing money to lend to other countries, we would want to be absolutely sure that the money that is being lent is for prudent and responsible economic and even political reasons. We believe providing financial support by providing this facility to Indonesia is prudent.

I am going to take the opportunity in the debate on this bill to talk a little about debt. I do so because the Rudd government yesterday in declaring ‘mission accomplished’ on the economic downturn were effectively saying that there is no recession and there is no economic downturn of the massive scale that is going to take Australia into negative territory. What they are saying is that it was prudent to borrow money to hand out cash to people in the community. As we dig into the national accounts figures from yesterday, we start to peel the onion and discover what really is behind the spin of the Rudd government.

Obviously we have identified, as have many economists, the point that the underlying data is of great concern. A number of states in Australia, if you apply the broader definition of recession, are in recession. What we can identify is that the very significant collapse in imports in the last quarter and the marginal increase in exports delivered a massive boost to GDP of 2.2 per cent, which I might add is the largest contribution, as I understand it, quoting from market economists, of any export figure to GDP in a quarter.

Duncan Kerr (Denison, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

I rise on a point of order, Madam Deputy Speaker. I enjoy doing what Joe does occasionally, and that is taking a point of order on relevance. The bill, as is described, is not a matter to which these very general remarks should go. Might I also say he falsely represents the statements of the government as though ‘mission accomplished’ was stated by the government. We made it very plain that the economic circumstances remain troubling for Australia.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

Order! The honourable member for North Sydney has the call.

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

Thank you, Madam Deputy Speaker. The most revealing statistic was that prior to the release of the current account data on Tuesday, only two of 20 economists surveyed by Reuters thought it was going to be in positive territory. After the data came out on Tuesday, that surged to 13 out of 20 thinking it was going to be a positive quarter. So that alone illustrates the significance of the net export data in the national accounts yesterday.

But also what was revealing in the national accounts yesterday was the ongoing relative strength—relative strength; I do not want to be misquoted again by the Treasurer or the Prime Minister—of the terms of trade. There is a graph in the national accounts, from memory on page 9, but I stand to be corrected, which indicates that the terms of trade that currently exist are more favourable to Australia than they were even when the coalition lost the election in 2007. So the mining boom might have been part of the record of the Howard government, but the terms of trade continued to improve after the election of the Rudd government in favour of the Rudd government. What we now know is that all those benefits have gone because the Rudd government has gone on a spending spree on a scale that we have never seen before—29 per cent of GDP.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I ask the honourable member for North Sydney to come back to the bill, please.

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

I am talking about the state of the budget, Madam Deputy Speaker, and this is a bill that goes to the heart of the budget—it is a financial assistance bill.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I ask the honourable member to turn his attention back to the bill.

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

I am happy to do that, and we will apply the precedent to every other bill debated in this place.

Duncan Kerr (Denison, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

On a point of order, Madam Deputy Speaker: this bill, through its schedules, implements agreements with the IMF for assistance in particular areas, and the shadow minister has indicated they agree with that. These broad comments have nothing to do with the legislation. It is simply a misuse of parliamentary time.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I have drawn the honourable member’s attention to the bill.

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

This is a financial assistance bill. You guys know how to spend money—29 per cent of GDP this year. You are the biggest spending government in Australia’s history. The Rudd Labor government is the biggest spending government in modern Australian history—29 per cent of GDP. No wonder the Parliamentary Secretary for Pacific Island Affairs, who is at the table, does not want to talk about expenditure. This is a financial assistance bill.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The honourable member will address the bill.

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

I am addressing the bill.

Duncan Kerr (Denison, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

You’re not; you’re nowhere near the bill.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I do not need help from my right-hand side, thank you.

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

Madam Deputy Speaker, this goes to the capacity of Australia to be in the business of lending money to other nations. If we do not have our own public finances in check, if we are dealing with the biggest spending government in modern Australian history and the biggest borrowing government in modern Australian history, that cuts to the chase of whether you have the capacity to lend other countries money. It is easy to say, ‘Lend other countries money.’ You just borrow money to lend other countries money. The interesting thing is that your capacity to be generous at the expense of Australian taxpayers is severely reduced when this government is in the business of borrowing for day-to-day purposes in Australia.

I would not suggest for a second—and various people have tried to verbal the opposition on this—that it is unnecessary as of today to borrow some money. Our argument with the government is about, firstly, whether the government should be borrowing so much money—$315 billion gross—and, secondly, whether it is money well spent. Is it well targeted and well spent? I say to the House and to the Australian people, the Rudd government has announced new additional expenditure items to the tune of $10 million an hour since the election.

Duncan Kerr (Denison, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

Madam Deputy Speaker, on a further point of order: it would be relevant to this bill if the shadow minister was saying that the expenditure was neither targeted nor well spent, but he is not. He is supporting this legislation. The general remarks are not relevant to this legislation.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The honourable member for North Sydney has the call.

Sharman Stone (Murray, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Madam Deputy Speaker, on the point of order: the point was being debated; it simply was not being put. It is time-wasting.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The honourable member for Murray, I know what is debate. The member for North Sydney has the call.

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

Thank you, Madam Deputy Speaker. I am happy to take up the whole half-hour if the member continues with this. I make the point that it is the Rudd government’s new spending initiatives of $10 million an hour from the Prime Minister who claimed before the election that he was a fiscal conservative. There are $124 billion new and additional spending initiatives since the election of the Rudd government. The Treasurer is fond of saying that we have had a massive collapse in revenue. It is true; there has been a significant collapse in revenue. But if you look at the estimated net debt of $188 billion, $124 billion of new spending makes up a big chunk of it. Of course there have been revenue falls. Even in this budget for the current financial year there would be a very small deficit as a result of the estimated revenue collapse. What has made the hole so deep is the level of expenditure by the Rudd government.

They will claim that they have created jobs. They had heroic assumptions about the first cash splash; they said it would create, from memory, 77,000 jobs. Where do they get these numbers? It is like the Treasurer saying that he has been advised that without that cash splash there would not have been such a significant increase, or marginal increase as it turned out, in household expenditure in the national accounts yesterday. We are going to test those figures. Whenever the Treasurer says, ‘Treasury tells me,’ let me say that we want to know what the assumptions are. We want to know what the justification is for the assertion. Some people in the gallery will just take the assertion as fact, but we want to know what the assertion is based on. Did Treasury, in fact, claim that there was a 0.6 per cent contribution as a direct result of the cash splash before Christmas? I am sure that in the interests of transparency the Treasurer will release all of that information.

In relation to the budget itself, because you have to raise revenue, when we proposed a small increase in the cost of cigarettes to offset the proposed broken promise by the Rudd government on private health insurance, the Treasurer released estimates from Treasury—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The honourable member for North Sydney, I have been very indulgent. It is a wide-ranging debate. Could you turn your attention to the International Monetary Agreements Amendment (Financial Assistance) Bill 2009?

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

Okay. I understand they smoke cigarettes overseas, Madam Deputy Speaker, and they smoke in Australia as well. In relation to smoking in Australia we proposed a marginal increase in the excise on cigarettes. What does the Treasurer do? He releases Treasury assumptions that go out 10 years. He does not advise the public that Treasury’s figures have been out by $1 billion in the last few years on cigarette excise.

Duncan Kerr (Denison, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

Madam Deputy Speaker, I raise a point of order on relevance. This really is contemptuous of you and of the parliament. The shadow minister has been Leader of the House and shadow leader in many circumstances and he would know that this is unparliamentary, that this is a narrow bill and he is raising matters of absolutely no relevance to it.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The shadow Treasurer will please continue but should address his remarks to the bill. I have been very indulgent, as the House is indulgent with wide-ranging debate.

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

Madam Deputy Speaker, it comes down to the credibility of the assumptions in the budget and it comes down to the fact of whether Australia is able to be in a position to borrow money to lend it to other countries and what the cost is to our budget. If that is not relevant, Madam Deputy Speaker, it is your call. But it is certainly relevant to the taxpayers out there who are paying for the debt by the Rudd government. That debt, which goes out to 2022 according to the Prime Minister, is based on heroic assumptions in the budget that tend to be a rather moving feast for obvious reasons, which will become more apparent over the next few days.

I think what needs to be recognised is that ultimately we have to be a good neighbour and we have to be a good friend. It is in the national interest to have global economic stability, but the political tactic of the Rudd government have always been to talk out of both sides of their mouth. On the one hand they want to scare people about how bad it really is offshore, therefore ignoring the basic and fundamental stability of the Australian economy. On the other hand they want to ride in on a white horse claiming that only thanks to the Rudd government is Australia able to withstand this global onslaught. They truly ignore the significant state, the positive state, of the Australian economy that they inherited. They ignore the fact that they had no net debt. They ignore the fact that the budget was in surplus. They ignore the fact that unemployment was at four per cent. They ignore the fact that even after their election the terms of trade were more favourable to them than they ever were to the Howard government. They ignore all of that. In that frame of mind they are running a dual line.

We recall the Prime Minister saying on, I think, 12 October last year, ‘It is going to be bad; really bad.’ They were not optimistic words from the Prime Minister; they were scary words from the Prime Minister. He was scaring consumers into not spending and scaring business into pulling back on investment and employment. In relation to business, it worked. There is no doubt that the household sector has gone out and spent some money—no doubt about that. The underlying concern is that the business sector has pulled back dramatically. Imports are not down because there are fewer LG widescreen flat panel TVs coming into Australia—even though that may be the case. Imports are down because business is not importing the machinery that is going to create the jobs and generate the exports tomorrow. Business is contracting. Business is the engine room of the Australian economy, and business is contracting according to the national accounts from yesterday.

Even the data that came out earlier today provides evidence that business investment is flat or has decreased. That is a concern, because they are tomorrow’s jobs, tomorrow’s exports and tomorrow’s wealth creation. Yet the government have declared that it is mission accomplished, after they managed to spend a truckload of money. They were very fortunate—indeed, Australia was fortunate, thankfully—to get very favourable terms of trade and very favourable data on net exports, which fed into the national accounts yesterday.

That very favourable data on net exports is closely linked to the fact that the Australian dollar had plunged so low in a short period of time. It is also related to the fact that Japan still needs our coal to meet its domestic energy needs. There is a consensus view that China has been hoarding resources, in part in anticipation of the huge impact of their domestic stimulus packages. We know that there are very significant negotiations currently underway between Australian miners of iron ore and also coal and the Chinese government. The Australian based resources companies have obviously had to negotiate significantly lower prices in the last few weeks than they would have expected, but they are still reasonably good prices compared to a few years ago. But the Chinese are certainly sending the very clear message that they expect to pay far less than some of the other nations. That will ultimately have a significant impact on further contributions of net exports to the national accounts.

It is a good thing that Australia is helping out our neighbours. We do that in many ways. There is bipartisan agreement that we should provide through this bill a facility of up to $1 billion to Indonesia. What we all need to be sure of is that any money that we lend, be it through the ADB, the World Bank or the IMF, is well spent and is not influenced in any jurisdiction by corrupt practices or that the quality standards of projects are less than what we would reasonably expect. Therefore, we support this bill in good faith. We remind all Australians that only for so long can Australia go down the path of borrowing money to lend money to other countries.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak in support of the International Monetary Agreements Amendment (Financial Assistance) Bill 2009. I will confine most of my remarks to the bill, but before I do, having listened to the member for North Sydney, I want to say that here we have another clear example of the coalition again simply talking down the Australian economy. They simply cannot accept that as a result of the prudent management of the Australian economy by the Rudd government that Australia is in a much better position to withstand the global economic recession than just about any of the other 30 OECD countries. We are not out of the woods as yet. Contrary to what the member for North Sydney said, this side of the House have never said that it is mission accomplished. We are not out of the woods yet, but we did see in the last quarter 0.4 per cent growth in GDP in this country, growth that is a result of a strategy that is protecting Australian jobs while investing in nation-building infrastructure for the future.

I wish to speak about at length the substance of this bill. The purpose of this bill is to simplify the process for Australia to accept agreed amendments to the articles of the International Monetary Fund and the International Bank for Reconstruction and Development, commonly known as the World Bank. This bill amends the International Monetary Agreements Act 1947 to establish a framework for Australia to provide financial assistance to a country in support of World Bank or Asian Development Bank programs.

The International Monetary Agreements Act already provides such a framework for assistance provided to a country in support of International Monetary Fund programs. The International Monetary Agreements Act 1947 established Australia’s membership of the IMF and the World Bank. Under the current legislation, any amendment to the fund and bank agreements requires an international monetary agreement act in the Australian parliament. This bill will alter the definitions of the articles of agreement of the IMF and the World Bank to include any amendments of the relevant articles of agreement that enter into force for Australia without the need for further legislative changes.

The IMF and the World Bank were conceived at the United Nations Monetary and Financial Conference, also known as the Bretton Woods conference, held in Bretton Woods, New Hampshire, in the USA, in July 1944. Both organisations were founded with the intention of managing the global economy to prevent a repeat of the global financial economic meltdown and subsequent Great Depression of the 1920s and 1930s. The intention of the World Bank was the reconstruction of postwar Europe. The intention of the IMF was to manage a system of fixed exchange rates to facilitate world trade and economic growth. Following the remarkable reconstruction and economic recovery of Europe in the years following World War II, the World Bank’s focus shifted towards funding development and poverty reduction in Africa, in Asia and later in eastern Europe. From the 1970s onwards most countries moved from fixed exchange rates to setting their own exchange rates, reducing the need for the IMF to manage the exchange rates system. The IMF’s role then shifted to assisting countries experiencing a balance of payments crisis, such as was seen during the Latin American debt crisis of the 1980s and the Asian financial crisis of the late 1990s.

Crucially, in recent years both the IMF and the World Bank have put reducing poverty at the forefront of their work, and this is a subject I will return to later in my speech. In addition to reducing poverty, climate change has been given greater prominence in the policies of both the IMF and the World Bank, because it is the poorest countries of the world that will be affected first and most dramatically by climate change. It is timely that we are now discussing the changing roles of these international financial institutions. The world is experiencing its greatest economic crisis since the Great Depression. This global crisis has had a very significant impact on developing countries, particularly on their financial sectors and their government’s ability to access credit. The IMF and the World Bank will play crucial roles in the recovery of the world economy, particularly in developing nations.

I refer to the specific action that this bill addresses. In December 2008 the Prime Minister announced that Australia would provide $1 billion to Indonesia as a stand-by loan—I repeat, as a stand-by loan—to help mitigate the effects of the global economic crisis. This loan is required not because of bad policy or problems with Indonesia’s economy but because the global economic recession has seen financial markets effectively close to countries like Indonesia. This stand-by loan is another step in the strong relationship between Australia and Indonesia. The focus on our nearest neighbour as a trading partner and a regional ally was driven by Paul Keating during his time as Prime Minister and continued under the previous government, which in November 1997 issued a similar stand-by loan to Indonesia to assist during the Asian financial crisis. Given that the Labor Party in opposition supported the then government’s loan in 1997, I understand and welcome the bipartisan support for the loan proposed in this bill. Australia’s relationship with a stable and prosperous Indonesia has numerous benefits beyond the economic, as we cooperate in areas such as security, people smuggling and combating terrorism. The changes in this bill will allow Australia to provide a loan to Indonesia if needed by mid-July 2009. This demonstrates the Rudd government’s willingness to act decisively to tackle the economic crisis at home, in the region and internationally.

The World Bank estimates that in 2009 an additional 55 million people will be living on less than US$1.25 per day as a result of the global economic crisis. After strong growth in recent years, the global economic crisis has had a devastating impact in developing countries, resulting in a severe slowdown in economic growth; slowing exports, particularly in the commodities sector, which is such an important source of foreign exchange and tax income for developing countries; limited access to finance, which is what this bill is all about; reduction in private investment; and worsening of government budget positions. In the same way that Australia faces a $210 billion tax revenue shortfall because of the global crisis, developing countries are finding similar shortfalls in their own budgets. For the same reasons, they will have to borrow offshore.

It is important that Australia is a good global citizen and does what it can to assist countries less fortunate than ours. The Rudd government has taken steps to support developing countries during this global economic crisis. At the recent G20 leaders summit in London, the Prime Minister and other world leaders agreed on a range of measures to boost the IMF, the World Bank and multilateral institutions such as the Asian Development Bank to help developing nations through the global economic crisis. These measures included an additional $500 billion in funding for the IMF, a trebling of its resources; $100 billion for various development banks around the world, such as the African Development Bank and the Philippines based Asian Development Bank in our region; $250 billion by way of trade finance to continue to support global trade; and an additional $250 billion to support global liquidity. Prime Minister Rudd described the IMF as the ‘global financial policeman’, and these additional resources allow the IMF to fulfil this role and support economies around the world.

In addition to the successes of the G20, Australia’s aid budget was increased from 0.33 per cent to 0.34 per cent of gross national income in 2009—working towards a 2015 target of 0.5 per cent. Despite a $210 billion shortfall in taxation revenue, the government has chosen to increase its aid budget, keeping the promise made prior to the 2007 election. There have been some significant changes in the countries where this aid budget is targeted. In his speech celebrating Africa Day on Monday, 25 May, the foreign minister, Stephen Smith, noted that Australia had increased its aid to Africa by 40 per cent in recent budgets. According to the United Nations, of the 50 least developed countries in the world, 34 are in Africa. A further 14 are in the Asia-Pacific region. It is in these two regions—Africa and the Asia-Pacific—where Australia’s aid budget is now focused, ensuring that the assistance is targeted at those countries most in need.

I take a moment to speak about Australia’s increased support for Africa, particularly for those 34 African nations that are amongst the world’s 50 least developed. Of these least developed nations, almost 50 per cent of the population lives on US$1 per day. Only 58 per cent of the population in these countries has access to clean water. Nearly 140 million people in these countries live in poor housing conditions, often referred to as slums. In recent years these least developed countries have seen debt relief for past government loans, an increase in foreign investment, an increase in export income and positive trends in health and education, as some countries are on course to meet their Millennium Development Goals targets. In 2004, the 50 least developed countries recorded an average economic growth rate of six per cent—their best result for 40 years. Given the recent positive trends in these countries, it is important that the Australian government and international institutions, such as the IMF and the World Bank, work to support developing countries during this global economic crisis. It would be a tragedy if the progress of recent years was lost. The 40 per cent increase in Australia’s aid to Africa announced in the recent budget is just one of a range of measures that are strengthening Australia’s relationship with Africa.

I would like to elaborate on the very important point the foreign minister made regarding Australia’s future relationship with Africa, and using our ‘experience and expertise’ to make a ‘unique and positive’ contribution. There are many similarities between Australia and developing countries within Africa. Many of these countries, like Australia, are rich in natural resources. The challenges their governments face are the same as our own in working to ensure that the proceeds of these natural resources benefit as many people as possible and build the country’s long-term future. Like Australia, many developing countries have strong agricultural sectors that provide export income to drive economic growth. African farmers encounter the same issues on the global market that Australian farmers do, such as government subsidies and restricted market access. The Australian government is working, through trade minister Simon Crean, to free up market access and reduce agricultural subsidies in areas such as the USA, Japan and the European Union. This will benefit not only Australia’s agricultural sector but also farmers in all developing countries.

There are many people of African descent within my electorate of Makin. They come from countries such as Somalia, Sudan, Liberia and Ethiopia. The increase in the number of people from Africa who migrate to, visit or study in Australia is further evidence of the strengthening relationship between Australia and Africa. I take this opportunity to mention the work being done by the Uniting Church in Modbury, in the electorate of Makin, to build bridges with people from the African communities. Every Tuesday the Modbury Uniting Church hosts their African Women’s Day. This provides a safe place for refugees and new migrants from Africa to meet in a non-threatening environment. The day has been expanded to include the teaching of skills such as sewing, computing and English language conversation. The church recently invited members of the South Australia Police to attend African Women’s Day, which allowed the many police men and women who attended to further build relationships with the African community. It was most fitting when recently the Modbury Uniting Church was honoured for its work with African Women’s Day by receiving a certificate of appreciation from the Premier of South Australia. This recognition is much deserved, and I congratulate Reverend Tony Goodluck, Pat Thomas and Wendy Sinnott from the church on this honour. Regrettably, the church hall that is used for these activities was the subject to an arson attack only about a week ago, causing extensive damage.

The IMF has been criticised in the past, particularly for some of the conditions attached to the support packages it provides to developing countries. The IMF has taken steps in recent years to make its support packages more transparent and tailored to a country’s specific needs. The greater flexibility in loan conditions for both inflation and fiscal policy are further evidence of this reform process. I also welcomed the IMF’s plan, advocated at the G20 by the Prime Minister, to reform its quota system of governance in 2011. This will see nations such as China play a much more significant role in the fund’s direction and administration, and address the criticisms in the past that the fund is not sufficiently representative of the developing world. The renewed focus of both the IMF and World Bank on reducing poverty and combating climate change demonstrates that, despite past criticisms, both organisations are now focused on achieving the stated target of the United Nations Millennium Development Goals.

Although this bill relates to funding for people outside of Australia, there is a deep passion for this issue within Australia and certainly within my own electorate of Makin. Since being elected, I have been lobbied on numerous occasions by people within my electorate about Australia increasing its aid to Third World countries, but I want to share one particular experience. On 30 March this year I attended a special assembly at King’s Baptist Grammar School in Wynn Vale. The purpose of the assembly was to present me with hundreds of cards the schoolchildren had made relating to global poverty and to ask me to present them to the Prime Minister. The cards were the culmination of projects aimed at raising awareness among the children of King’s Baptist Grammar School of the plight of their counterparts in developing nations. I was pleased to attend the assembly and to speak about world aid with students. And it was my pleasure to be able to pass the cards on to the Prime Minister’s office.

This bill continues Australia’s role as a leader in supporting developing nations worldwide, particularly in Africa and our own Asia-Pacific region. The bill allows the Australian government to fulfil our international obligations in this time of crisis, and I commend the bill to the House.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the International Monetary Agreements Amendment (Financial Assistance) Bill 2009. I listened to the contribution from the member for North Sydney in silence. That contribution is characteristic of all we saw about the Howard coalition government—and he was a senior member of the government—sloppy, slothful, lazy and lethargic. That was the contribution of the member for North Sydney. It was not addressing the bill that is before the House, it was in relation to—

Sharman Stone (Murray, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order: that language was inappropriate and unparliamentary and I ask the member to withdraw.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member will resume her seat. The member for Blair has the call.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

It was not addressing the bill at all. It was all right to come in here yesterday and make speeches about the national accounts, but the bill before the House deals with a very important matter. It deals with issues concerning our relationship with Indonesia, a country to our north of about 225 million people. Our relationship with Indonesia is simply vital, not just for our national security but also for our future prosperity. The member for North Sydney hardly mentioned that fact.

The Howard government was involved in this process of helping Indonesia as well. We are doing what we need to do as a good neighbour. One of the greatest stories in literature is the story of the Good Samaritan. It is a great story about helping those in need. The priest goes past, not helping the poor fellow who has been injured. But someone who has no relationship with the injured fellow’s culture or religion goes past and helps him when he is in need. We have an obligation because we are part of a common humanity and a common world to help those in need.

We should aspire to the Millennium Development Goals. We should do everything we can to help our neighbours. We do that in the South Pacific. If our neighbours are in need in South-East Asia, we should support them. If our neighbours are in need in Africa, we should support them. We are a First World country and we aspire to be a country that helps people and sets an example in the fields of sport, culture, economics and political development and democracy. If we are a country like that, we should and do have an obligation to support our neighbours in their hour of need.

In December 2008, the Prime Minister announced that Australia would provide US$1 billion to Indonesia as a standby loan to help ameliorate the effects of the global financial crisis should Indonesia need it. This bill before the House fulfils that commitment. The bill appropriates funds required for such a loan or currency swap agreement. In mid-July, Indonesia requested that a loan arrangement be put in place as soon as possible to boost market confidence in their economy and particularly in their financial sector.

The Howard coalition government did these sorts of things in the past. It entered into three bilateral standby loans during the Asian financial crisis—US$1 billion to help Indonesia in November 1997, US$1 billion to help Thailand in August 1997 and US$1 billion to South Korea in December 1997. The Howard coalition government did this, and I give them credit for it. That was the right thing to do in the circumstances, and we supported it. That is the reality. The Howard government did this when our neighbours were in need during times of financial crisis, and we supported it. We are, under the auspices of the World Bank, making a loan agreement. It includes contributions from other bilateral and multilateral partners, among them Japan and the Asian Development Bank. We are responding when our neighbour asks for it. What would we do if our next-door neighbour, our friend down the road or someone in our suburb or city asked for help? Would we turn our backs? We should not.

The importance of economic growth and stability in Indonesia cannot be discounted. It is simply vital. It is crucial, in the circumstances, to do this. The member for Higgins, the former Treasurer, said in this House on 25 November 1997:

This government has made its commitment to the region as a good regional neighbour, and also because of our commitment to Australian growth and Australian jobs.

That was in the circumstances where they gave money to South-East Asia. We need to do this because of our relationship with Indonesia. We cooperate in many practical ways on international issues such as counterterrorism, illegal fishing, people smuggling, climate change and interfaith dialogue. Security cooperation is enhanced by the Lombok Treaty, which provides a unique treaty framework for addressing traditional and non-traditional security challenges.

We have a very healthy trade and economic relationship with Indonesia. Our two-way trade in 2007 was worth $10.3 billion and two-way investment around $3.8 billion. As a country, Indonesia is extremely important to us when it comes to our economic development and the security of our people. Indonesia is a fledgling democracy, and if you go there you will see that the people of Indonesia take their democratic rights very seriously. They have campaign flags on their motorcycles, bikes and houses and proudly show which side of the political divide they support. You can tell which side they support by the colours of the flags, the banners and the posters.

We should support Indonesia and its democracy. We never want it to go back to the dark days of authoritarianism. We have supported them because they play an important role in our society as well. There are about 15,000 Indonesian students enrolled in educational institutions here, and they play an important role. If we want students from Indonesia to go back to their country and take up positions of leadership in the economy, in sport, in culture and in politics, it is important that we also deal with them and educate them. They make an important contribution to both their country and our economic development as they pay their way in our universities.

People from our Institute of Sport assist them with their athletics team and its aspirations to be the leading nation in the Asian games. They have slipped back in the last few years, but they aspire to be the best they can, particularly in the area of athletics. Compared to some of their neighbours they are excellent at athletics, but they aspire to be better in the areas of soccer, badminton, weightlifting and other sports as well.

We have also entered into a $2.5 billion, five-year development partnership with Indonesia. Throughout our relationship with Indonesia, we have supported economic development cooperation. Our interfaith dialogue, between Christian and Muslim communities, is important.

We have also signed a joint statement on climate change. We are helping them with the reafforestation and the challenges in central Kalimantan and also the challenges that they face with the decline in the number of orangutan in central Kalimantan. In the circumstances we are helping them also with their primary schools and their education funding. The Speaker and I have visited schools in Indonesia to see and discuss the great work that people there are doing. And it is not just in the schools—we are trying also to undertake reafforestation in central Kalimantan. This is important in terms of the challenges of climate change.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member for Blair will have leave to continue speaking when the debate is resumed.