Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

I rise to speak on behalf of the coalition and the shadow Treasurer, the member for North Sydney, in support of the government's International Monetary Agreements Amendment (Loans) Bill 2012. This bill makes three amendments to Australia's credit arrangements with the IMF. First, it reduces Australia's contingent liability under the New Arrangements to Borrow line of credit. Second, it increases the maximum maturity of the IMF's drawings under the New Arrangements to Borrow from five to 10 years. Third, it renews the New Arrangements to Borrow for a period of five years commencing 17 November 2012.

Australia has had a long association with the IMF, having been a member since 1947, two years after the organisation came into formal existence. The IMF was originally established to provide a mechanism for resolving short-term economic difficulties of members so as to reduce shocks to the global economy. This of course followed the calamitous events of the Great Depression and the disruption of the Second World War.

Article 1 of the articles of agreement which created the IMF outlines the key mandate of the IMF. Chief amongst them is for the IMF to facilitate the expansion and balanced growth of international trade and to contribute to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy. It is also tasked with promoting exchange rate stability by maintaining orderly exchange arrangements among members and avoiding competitive exchange rate depreciation. It assists in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade. It provides confidence to members by making the general resources of the IMF temporarily available to them under adequate safeguards, thus providing them with the opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. And it aims to shorten the duration and to lessen the degree of disequilibrium in the international balances of payments of members.

The IMF's role and mandate have broadened following the global financial crisis, which is widely regarded as the biggest crisis to hit the global economy since the Great Depression. As outlined in the IMF's response to the global economic crisis, it has increased its crisis lending whilst overhauling its general lending framework; reformed policies towards low-income countries and quadrupled its concessional lending; improved policy analysis and advice whilst contributing to the ongoing effort to draw lessons from the crisis of policy regulation and reform of global financial architecture, including through its work with the Group of Twenty industrialised and emerging market economies; and it has undergone wide-ranging governance reforms to reflect the increasing importance of emerging market countries and to ensure that smaller developing countries will retain their influence in the IMF.

Australia has three lines of credit with the IMF. The first is its usual quota contribution. This was doubled following a decision by IMF governors in December 2010. The quota is shown on the government's balance sheet as a loan. The quota commitment increased from just over A$4 billion to just over A$8 billion in the 2011-12 financial year, as outlined in the 2012-13 budget.

The second is the New Arrangements to Borrow. This is a contingent liability of the government to be drawn down on request of the IMF. This is the line of credit which is addressed by this bill. The bill seeks to implement reforms to the IMF's crisis lending arrangements by enforcing the changes outlined in the 14th General Review of Quotas in December 2010. The rollback of the New Arrangements to Borrow line of credit is worth $3.2 billion; however, the reduction is conditional on the doubling of Australia's primary quota from A$4.l billion to $8.8 billion. As I have noted, this doubling in the quota is already provided for in the budget. This bill also seeks to lengthen the maturity of the New Arrangements to Borrow line of credit from five years to 10 years, on the basis of assisting the IMF with funding issues as a result of rolling over the maturity on this line of credit.

The third line of credit is a US$7 billion contingent bilateral loan which was agreed on 20 April 2012. This is noted in Budget Paper No. 1, between pages 8 and 11, I am advised. Of key importance, this loan has not yet been legislated by the parliament. We will have more to say on this third line of credit when the enabling legislation comes before this House.

Australia sits within the top 20 member country contributions to the IMF, as a percentage of total Special Drawing Right Holdings. Our contribution to the IMF is based on the assigned quota, broadly in line with our economy's size relative to the world economy. Australia has always been a relatively generous country, helping our neighbours in our regions in times of need. Not only do we meet what is required of us in terms of our international obligations; we also go above and beyond in helping our regional neighbours—something which we should all be proud of. Examples of this include the assistance we provided back in 2005, when Prime Minister John Howard pledged $1 billion to Indonesia in aid, in the wake of the Indian Ocean tsunami, to help restore and rebuild their nation after the devastating consequences of that natural disaster.

In conclusion—

Ms Bird interjecting—

Yes, I am speaking on behalf of Joe Hockey here; I said that at the start.

In conclusion, as I stated at the outset, the coalition will support the passage of this bill through both houses. There is an element of quid pro quo in the structuring of Australia's finances with the IMF given the changes put forward within this bill. The doubling of Australia's existing quotas with the IMF is partially offset by the reduction in the New Arrangements to Borrow line of credit. The coalition will continue to monitor Australia's support to the IMF and the IMF's focus and priorities going forward as the global economy continues to evolve in the wake of the GFC. As I said at the outset, the coalition is supporting this bill and I commend it to the House on behalf of the shadow Treasurer, the member for North Sydney.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

It is good to have the opportunity and the chance to talk about our economy this afternoon with this bill before us today, the International Monetary Agreements Amendment (Loans) Bill 2012, because, since Labor came to office, our GDP is up 10 per cent and we know that our economy is beating the world. Our economy is the envy of economies around the world. It is a sign of the strength of our economy.

It is also proof of the strength of our people. We have the best combination of solid growth, we have low unemployment, we have contained inflation, we have got healthy consumption, we have a huge investment pipeline and we have lower interest rates.

Not only is the RBA now expecting above-trend economic growth this year but it has pointed to stronger than expected employment growth and low inflation outcomes, which partly reflect an improvement in productivity. It also highlighted that we are seeing early signs that the recent interest rate cuts which affect the majority of Australians who have mortgages are starting to help businesses and households. That is a very positive trend. So Australians should have confidence in our rock-solid economic fundamentals because they are rock solid. They have put our economy in a league of its own.

When our ministers and even our opposition shadow ministers travel overseas, one of the things they constantly hear other economies ask is: why is Australia's economy doing so well? Also, that they would change their economy for our economy at the drop of a hat. We hear that constantly from overseas and from other economies around the world. We are not talking about economies of Third World countries; we are talking about the economies of European countries and First World countries all around the place. Our economy is seeing impressive growth, growing faster than every single major advanced economy.

In the March quarter this year, GDP rose from 1.3 per cent, growing to 4.3 per cent. It is the fastest pace in over four years, despite the biggest global financial crisis that we have seen. Again, we see low unemployment, 5.2 per cent, less than half the rates seen in Europe. In some countries in Europe it is sitting around the 20 per cent mark and, in Greece and Spain, it is way up there. Youth unemployment in some of those countries is 50 per cent plus. Could you imagine 50 per cent plus youth unemployment here in Australia? I think youth unemployment in Australia is around 25 per cent and under, but 50 per cent would be devastating—people without hope for the future, notwithstanding what it does to the psychology of a nation. Yet here we have one of the lowest unemployment rates in the world at 5.2 per cent.

We have exceptional job creation records. Around 800,000 jobs have been created since Labor came to government. And we are on the mark for another 300,000 by 2013. Inflation is at a 13-year low, with underlying inflation at the bottom end of the RBA's target band of two per cent through the year to June. Low cash rates are sitting at 3.5 per cent, lower than they were at any time under the previous government.

As I said, a huge investment pipeline is coming through, worth half a trillion dollars, with more than half of it at an advanced stage, helping to boost the productive capacity of our economy. We have healthy consumption, with a recent improvement in retail trade and very low net debt as a percentage of GDP, peaking around one-tenth of the level across major advanced economies. That means returning the budget to surplus ahead of every single major advanced economy. That is a pretty good track record. We also know that bringing the budget back into surplus has already helped give the RBA room to deliver the equivalent of five interest rate cuts since last November. The RBA has only been able to cut rates recently because inflation has been contained, and the government's budget discipline has clearly contributed to this.

No-one will ever forget that interest rates went up 10 times under the last Liberal government because inflation was not contained. The data blows away the exaggerated claims of the doomsayers, the cynics and those who want to talk down our economy. Australia's GDP is 10 per cent higher since Labor came to office and our economy is growing faster than every single major economy.

But the greatest pride for the Labor government is our record on jobs, which has been our core focus from day one. As I said, over 800,000 jobs have been created since we came to office. However, the situation could have been very different. I have said it time and time again in this place: if we had listened to those opposite when the global financial crisis came, if we had not stimulated the economy and if we had not acted immediately on the advice that we were given by Treasury, we could have been looking at 300,000 people unemployed.

Those opposite told us not to do anything and to ride it out, but all the things those opposite continually criticise—the BER, our infrastructure packages—created jobs. Across the nation, 26,000 projects created an average of 200 jobs per project, so you can see why we faired better than any other nation in the world. We took decisive action, stimulated the economy and created jobs. That is what it was all about—to act quickly in creating jobs. Yet we continually hear vitriol from those opposite having a go at the BER and the infrastructure projects which have happened in every member's electorate.

Through the GFC, we saw the opposition failing to support our policies which ensured we are the only developed economy to have avoided the recession. Now we hear them talking down the economic achievements of our businesses and denying the facts—and what I have just read out are facts about our economy; they have not been made up. Their wrecking ball approach has a snowball effect on the economy—and I am sure that sometimes the things that are said on the other side do affect our economy. What the opposition say about these things is very dangerous, and their aggressive negativity is shredding the credibility of our economy.

The purpose of this bill is to amend the international monetary agreements, to accept changes to the IMF executive board decision which establishes the IMF new arrangements to borrow. We can make these decisions today because of the good economy we have put in place. We will reduce Australia's credit arrangements under the NAB and we know that, once Australia's agreed IMF quota increase comes into effect, it will renew the NAB for a further five years, commencing in November 2012, and make other technical changes to facilitate the roll-back of credit arrangements and to protect the fund from associated potential liquidity risks.

The IMA Act established Australia's membership of the IMF and the World Bank and makes provisions for Australia to meet obligations that may arise from our membership of these institutions. The new arrangements of the NAB decision dated 27 January 1997 form schedule 4 to this particular act, in line with the commitments made as part of the 2010 agreement on the IMF quota and governance reform amendments to the NAB. Decisions were adopted by the IMF executive board back in December 2011. The bill will replace schedule 4 of the act with the IMF executive board's amended NAB decision.

All these things can be done because we have put in place a very, very good economy. This bill needs to be passed swiftly because the amendment to the NAB decision, renewing the NAB for a further five years, will take effect, as I said, in November 2012. The definition of the NAB currently provided by the IMA Act is restricted to the current version of the NAB and that is why this bill has to be passed extremely swiftly. This bill is important reform. I commend this bill to the House.

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

This is important legislation and it builds on and shows the strength of the Australian economy. It goes to show what a good international citizen Australia is. We are proud to be part of the United Nations. We are proud to be part of the International Monetary Fund. We are proud of the fact that we have made our contribution to the relief of poverty, to the education of people and to commerce and trade. We are proud to go to G20 conferences. We are proud of the fact that we assist those in need. I commend the previous Howard coalition government for helping in Indonesia's time of need.

But we can only do this with a strong economy, as the member for Hindmarsh said. We can only do this if we have ourselves in a position where we can contribute and we are liquid enough to do so. We have seen challenges. We saw problems in the United States which led to the global financial crisis. We saw a real problem in regard to people's capacity to meet mortgage loans and problems in regard to the securitisation of those loans. We saw that feeding across into our economy and into Europe, with uncertainty in places like Portugal, Italy, Greece, Spain and the like. But every economy in western Europe and across the European Union was affected. About 15 per cent of our trade and commerce is with Europe as well and America is one of our biggest trading partners, so we were affected during the global financial crisis.

But this government undertook measures to protect jobs and to contribute to infrastructure, heeding the warnings of the Reserve Bank to invest in infrastructure. In my home state, we doubled the funding for roads, rail and port. We put in a record amount of investment. We stimulated the economy. We built important school infrastructure. It was the biggest school infrastructure build in the history of the Commonwealth—the $16.2 billion Building the Education Revolution. In every country town and every city in my electorate you can see the benefit of that.

We would not be in a position today to pass this sort of legislation and to contribute to the IMF if we had not built on those strengths. While those opposite were asleep at the wheel during the global financial crisis, what did we do? We actually undertook those measures. It seems to me that otherwise the Australian economy would not have been in this position; unemployment would have been much higher. Indeed, the Leader of the Opposition infamously said that we should follow the New Zealand model, which would have seen unemployment above seven per cent. Instead, we have unemployment of about 5.2 per cent and low inflation. We have seen record growth and about 800,000 jobs created when over 27 million have been lost in the Western economies which we trade with and which we have such affinity with—places like the UK, Italy, Spain, Portugal and the United States.

While the unemployment rate across the EU is about 11 per cent and America is struggling at about eight per cent and above, here in this country unemployment is at 5.2 per cent. It is no accident. It is no accident that we can take steps like this legislation that is before this parliament today. We can do this because we are a strong economy and this is a federal Labor government that invested in skills and job training, education, infrastructure and keeping people in work, making sure that they could pay taxes and contribute back.

We have the data. As the member for Hindmarsh said, we have the data which shows that the economy is strong. We have built it with fairness and with strength. We know that, whilst GDP throughout the Western world and the economies that we deal with and trade with are much lower, ours is much higher. It is much higher than it was. It is about 10 per cent higher than it was during the global financial crisis. We did not sleep through that. We supported people, we supported jobs, we supported regions and rural areas, and we supported people in communities across this country, no matter whether they were in big cities like Sydney, Melbourne and Brisbane or small country towns in my electorate like Toogoolawah, Lowood and Fernvale.

As previous speakers have said, this is a bill which amends the International Monetary Agreements Act of 1947. It accepts changes made by the IMF executive on new arrangements. It is known as the NAB—new arrangements to borrow—decision. It has the effect of reducing the credit arrangements we have under that arrangement. Following an agreement, we increased, as I said, the IMF quota. We are renewing, as the member for Casey said, the NAB for a further five years, commencing 17 November this year. That is why this bill is timely and needs to be carried by this House and the Senate, and effected. There are changes in relation to the IMF in terms of liquidity and the like.

This is not legislation that deals with any relationship to the contingent $7 billion bilateral loan to the IMF. The Prime Minister announced that in April 2012. Our commitment to the bilateral loan is part of our global effort to increase the resources available to the IMF. It was a commitment that is part of a $455 billion commitment. There were other countries which contributed to that particular commitment—the UK, Japan, China, Germany, France and all countries that felt they had an obligation to do so. The IMF then provides assistance to those economies in trouble. Poor economic outcomes, poverty, disadvantage and discontent lead to conflict, trauma and, at times, sadly, in the history of humanity, war.

The IMF has been a force for good throughout its history. We have seen it as something that is important to contribute to. We have seen it as part of the international arrangements.

I saw the member for Wentworth here. I note that he made a comment, which has been provided to me, in relation to an increase in the IMF resources. At the G20 London Summit he said this:

Well the biggest thing they've done, overwhelmingly the most important thing they've done is agreed to commit about a trillion dollars to the International Monetary Fund collectively. Now that's a good measure.

I am pleased that the member for Wentworth thinks that. I am pleased that those opposite do support this legislation, but I am troubled when I hear those opposite talk from time to time about notions and ideas from strange places when it comes to international assistance, whether it is to the IMF or foreign aid. We saw that during the response to the floods crisis in Queensland, when part of the savings measures which they said they would undertake would be a deferral of foreign aid. I do not think that was a good outcome. It seemed to come from One Nation at the time and I was surprised that those opposite thought it was appropriate.

There are some criticisms levelled from time to time by the opposition suggesting that what we are undertaking are IMF loans to Europe, as if somehow the Australian public is intent on and this government is committed to solely bailing out the euro area and some of the countries that I mentioned before. It is untrue. We contribute to the IMF as part of our good international citizenship. The IMF provides assistance, and there are some very strict eligibility and other criteria to its loans and the assistance it gives to countries. It does not just dole out the money willy-nilly. It makes sure that governments act in a responsible and prudent way. It is important that we do that.

I know there has been criticism not just from the right but from some on the left in relation to what we have done, but I think the IMF on balance does contribute well and productively to good economic arrangements and economic development, acting as, I would think, a ballast to keep economies strong in those countries which have suffered. What we are doing in relation to these arrangements today is in line with our membership of the IMF and the World Bank. We are making sure that we meet our obligations arising from the membership of those kinds of institutions.

We are a very fortunate place, Australia. We are, I think all of us would agree, the greatest country in the world. Every time I come back on a plane from overseas I say a prayer and thank the good Lord above for the fact that I was born here in Australia, because of the poverty that you see in some parts of the world and even the challenges that some of our friends in Europe and the US have. We really are blessed in this country, not just with a great climate but with a peaceful democracy. We are blessed with a people that are prepared to work hard, as they did during the global financial crisis. Labour and capital across the whole length and breadth pulled together to get through. We are a great country and we can afford to do great things. Our contribution to the International Monetary Fund as a collective measure shows that we are a compassionate country. It shows we are a generous country. It shows we are a good country, and I am proud to support this legislation.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

I have just had the great benefit of listening to the contribution to this debate from my friend the member for Blair. I find myself in complete union with both the sentiment and the wise words expressed by the member for Blair in his contribution. We are here this evening to discuss an important piece of legislation about an important institution, the International Monetary Fund. As you know, Deputy Speaker, the IMF was established as a critical part of the postwar international architecture—architecture that was established to bring political and economic security to the globe after the ravages of that terrible world war. It has an important function. Its function is to foster cooperation and exchange rate stability, to facilitate the growth in international trade and to assist countries who are undergoing balance of payments difficulties. Importantly, and this is something we know well in this region, it also assists countries to alleviate and lift themselves out of poverty.

The purpose of the bill is to amend the International Monetary Agreements Act 1947. The date of that act is an indication that our membership of this important institution, an institution constituted by 188 member countries, has been one of long standing. We joined it in the aftermath of the Second World War. Of course, the Australian Labor Party was at the forefront of ensuring that we had the appropriate international architecture in place and led the nation through that immediate postwar period. There has been a bipartisan approach to international arrangements ever since.

The purpose of the bill, as I say, is to amend the act to accept changes to the IMF executive board decision which established new arrangements to borrow. It will reduce Australia's credit arrangement under the NAB once Australia's agreed IMF quota increase has come into effect. It will renew the NAB for a further five years commencing on 17 November 2012. It will also make other technical changes to facilitate the roll-back of credit arrangements and to protect the fund from associated potential liquidity risks.

I am very interested in the detail of these arrangements. As you would know, Deputy Speaker, the NAB is a voluntary set of credit arrangements between the IMF and a number of its member countries.

It allows the IMF to borrow when supplementary resources are needed to forestall or cope with impairment of international monetary system, and it acts as a backstop where the IMF's usual quota resources are insufficient to meet the needs of borrowing member countries.

Australia has been a member of the NAB since it came into effect in 1998. Many might wonder what the NAB is being used for. Since being activated on 21 March 2011, the NAB has been used in conjunction with quota resources on all newly approved IMF programs. Up until August 2012 this included the programs for seven countries, including two programs for euro area countries.

The IMF draws against Australia's quota resources and NAB credit line on an equitable basis with other IMF creditor countries, and only as needed to help meet drawings under other IMF programs with borrowing countries. The IMF borrows from its creditor members with the full backing of its balance sheet and, ultimately, the resources of its global membership. Drawings on Australia—and this is an important point, not always understood—have always been repaid in full and with interest. They are not, as some have sought to characterise them in the past, some form of foreign aid. They are a commercial arrangement, if you like, with a very important purpose in assisting the IMF to fulfil its charter responsibilities. They are a loan which is repaid—to the benefit of Australia and Australian taxpayers—with interest and in full.

I would like to say a little on the background to the changes. The decision made by the G20 leaders in 2009 to increase the size of the NAB was both timely and appropriate. Mr Deputy Speaker, you would recall this was a time of global financial turmoil. It was a necessary step to ensure the confidence that the IMF was fully resourced to play its role in crisis prevention and resolution.

Australia has always been a participant in the NAB. Our commitment under the NAB increase when the expanded NAB came into effect in 2011 is complete. However, the expansion of the NAB raised the fund's reliance on voluntary borrowed resources to an unprecedented high level.

You would also recall, Mr Deputy Speaker, that the IMF—and the NAB—is a quota-based institution—that is to say, the resources of the IMF are levied upon each of the constituent member countries based on the size of those economies. The quotas are reviewed regularly, every five years in fact, and they are increased when it is deemed appropriate to ensure that there is the appropriate proportionality between member countries, and to ensure the monies paid in and lent to the IMF reflect the size and appropriate contribution of each of the constituent country members.

The doubling of IMF quotas and the corresponding rollback in the NAB credit commitments, which were agreed to in December 2010, maintained the expanded level of IMF resources while reinforcing that the IMF is a quota-based institution. The 2010 quota increase will also enhance the legitimacy and representativeness of the IMF by enabling a shift in quota share and voting power within the IMF to recognise the rapid growth of dynamic and emerging market and developing countries, many of them within our region.

Australia's quota increase was included in the 2011-12 budget. It will take effect when the necessary threshold of consents is received by the IMF, which is not expected until November 2012 at the earliest. Australia, I should say, was one of the first IMF members to consent to the quota increase.

The bill, as previous speakers have noted, needs to be passed swiftly because it is critical that we amend our act to reflect changes in the NAB decision and to ensure that Australia's ability to continue meeting its obligations under the NAB is not put at risk. The amendment to the NAB decision renewing the NAB for a further five years is proposed to take effect from November this year, and the definition of the NAB currently provided in the IMA Act is restricted to the current version of the NAB decision. Consequently, earlier passage will ensure that the standing appropriation that the act provides for in relation to Australia's obligations under the NAB continues to be applicable once the amendments to the NAB decision take effect.

I am pleased to see that this bill will have bipartisan support. As the member for Blair pointed out, it is unfortunate that some have attempted to make some political mileage out of this particular issue over the course of the last 18 months. The member for North Sydney, for example, in a doorstop interview he gave in November last year, attempted to characterise the change in quota arrangements as either some form of irresponsible aid or in some way an irresponsible act by the Australian government to bail out euro zone countries from the unprecedented economic circumstances that they are facing. This is irresponsible in the extreme.

As I have said, our commitments to the IMF have been bipartisan since 1947. There is nothing extraordinary in what we are doing here. The only purposes that were served by the comments of the member for North Sydney in that doorstop interview in November last year were to put a big cloud over the financial credibility of those opposite and to put in some doubt the longstanding bipartisan nature of these bills. So I was very pleased to hear the member for Wentworth, who was in the chamber during part of this debate, affirm his commitment to these arrangements both publicly and in this place. I am pleased to see that perhaps, in the cold light of day, the sorts of comments that were made by the member for North Sydney and shadow Treasurer were nothing more than another one of his intemperate thought bubbles, and we can now move to ensure that this legislation enjoys bipartisan support and swift passage through both houses of parliament. I commend the bill to the House.

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

I thank all of those honourable members who have contributed to what, I think, has proved to be a very spirited debate on the International Monetary Agreements Amendment (Loans) Bill 2012. The purpose of this bill is to amend the International Monetary Agreements Act 1947 to reflect two amendments to the International Monetary Fund's new arrangements to borrow adopted by the IMF executive board on 16 November 2011 and 21 December 2011. These changes will give effect to commitments made as part of the 2010 IMF quota and governance reforms by reducing the NAB by an amount corresponding to the 2010 IMF quota increase.

The quota increase and corresponding NAB rollback will maintain the IMF as a quota based institution by reducing its reliance on voluntary borrowed resources. The NAB acts as a backstop to the normal quota based resources of the IMF by providing the IMF with recourse to borrow from its members when supplementary resources are needed to forestall or cope with an impairment to the international monetary system or to deal with a crisis that threatens the stability of the system.

The amended NAB will reduce the IMF's capacity to borrow from NAB participants by an amount corresponding to the increase in quota resources under the 2010 IMF quota and governance reforms. When the 2010 quota increases come into effect, credit lines under the NAB will be reduced to 182 billion special drawing rights, which is around $260 billion, from the current 370 billion special drawing rights, which is around $530 billion. Australia's maximum contributions under the NAB will fall to 2.2 billion special drawing rights, which is around $3.2 billion, from their current level of 4.4 billion special drawing rights, which is around $6.3 billion.

In addition to reducing the size of the NAB this bill will also reflect agreed amendments to the NAB to facilitate the NAB rollback while avoiding the risk of a temporary negative impact on IMF liquidity. Australia as a small, open economy relies on strong and stable global growth for its continued prosperity. Continued financial and economic uncertainty in Europe and elsewhere and a weakened economic outlook globally makes the role of the IMF in supporting global economic and financial stability much more vital.

Passage of this bill will both maintain and strengthen the IMF's available resource base by reducing the IMF's reliance on voluntary borrowed resources. This will benefit every country, including Australia. I commend the bill to the House.

Question agreed to.

Bill read a second time.