Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) according to the United Nations, global extreme poverty has been halved since 1990 but more than 1.2 billion people remain in extreme poverty;

(b) as an economically rich and developed nation, Australia has a responsibility to be a global leader in delivering overseas aid programs and funding;

(c) in 2008, Christian Aid estimated that developing countries lost more than $160 billion (USD) through just two forms of multinational tax evasion—transfer mispricing and false invoicing; and

(d) Micah Challenge:

  (i) is a global movement of aid and development agencies, churches, schools, groups and individuals speaking out against poverty and injustice in support of the Millennium Development Goals;

  (ii) has identified that Australia, as Chair of the G20, has a unique opportunity to bring tax evasion and corruption to the attention of the world in 2014; and

  (iii) urges Australia to take a leading role in tackling tax evasion;

(2) condemns the Government for:

(a) cutting the overseas aid budget; and

(b) its lack of action on multinational tax avoidance; and

(3) urges all Members of Parliament to take an active role in ensuring Australia continues to be a leader in the delivery of overseas aid programs and funding.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Is there a seconder for the motion?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Poverty and extreme poverty in particular continue to be a major issue around the world. According to the United Nations, global extreme poverty—that is, people living on less than $1.25 per day—has halved since 1990, but more than 1.2 billion people remain in extreme poverty today. Ongoing conflict, political unrest, natural disasters and disease outbreaks across multiple continents are putting more and more pressure on already stretched economies, and millions of people have been displaced from their homes.

According to the UNHCR there are more than 52 million refugees and displaced persons worldwide. In Syria alone, more than three million people have been forced to abandon their homes and flee for their lives due to the ongoing conflict. A further 6.5 million are displaced within the country's borders.

In Africa, the World Health Organization have described the current Ebola epidemic as unparalleled in recent times, with more than 2,400 people already killed. They hope that the outbreak can be limited to tens of thousands rather than hundreds of thousands of people.

And, closer to home, thousands of typhoon survivors in the Philippines are still sheltered in tents and makeshift bunkhouses following the devastation of last November's Typhoon Haiyan.

While adding to global poverty, these singular and often catastrophic events are by no means the root cause of poverty in our world, and there are underlying issues that also need to be addressed. I would like to pay tribute to the progressive social networks like Micah Challenge that work tirelessly to ensure that our focus remains on these deeper underlying causes of global poverty.

Australia needs to strengthen its efforts in tackling poverty and injustice through the Millennium Development Goals, not renege on its once bipartisan commitment. The first action the government could take is to reinstate the $7.6 billion that they cut from the overseas aid budget.

Under Labor, overseas aid helped make a difference to the lives and health outcomes of millions of people in countries like Papua New Guinea, Afghanistan and Timor-Leste. Labor doubled Australia's contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria. And we near doubled Australia's annual aid budget from $2.9 billion to $5.7 billion in six years of government, despite the tough budgetary environment, so as to maintain the commitment of the previous Howard government to continue to raise the aid budget to 0.5 per cent of GNI. This is a commitment the now Prime Minister also made before being elected and promised to keep as late as December last year, I might add—a commitment that has now been abandoned.

I am proud to say that Novocastrians are very generous supporters of international development and make a substantial contribution both financially and with our time to nations not so well off as ours. More than 20,000 individuals, 500 local businesses and 55 community and church groups in Newcastle actively support international development. A number of these contributors joined the shadow minister for foreign affairs and international development and me last week in a public forum and raised concerns about the current state of Australia's overseas aid budget. The message of the day was loud and clear: as an economically rich and developed nation, Australia has the responsibility to be a global leader in developing aid programs and funding.

I draw the House's attention to the ongoing work of Micah Challenge, which this year shines a light on multinational tax dodging and corruption. In their words, the Shine the Light Initiative has been designed:

… to tackle the scourge of tax dodging which robs developing countries on a massive scale of vital revenue for poverty reduction and sustainable human development.

In 2008, it was estimated that more than $120 billion was lost to developing countries through just two forms of multinational tax evasion. That is more than these developing countries receive in aid. As chair of the G20 this year, Australia has a unique opportunity to influence world economic leaders in tackling this problem of multinational tax avoidance.

I welcome news over the weekend that the G20 members have agreed to implement the common reporting standard on financial account information over the next couple of years. The common reporting standard will mean that tax authorities will automatically exchange information about what individuals and companies have in their bank accounts, so that it becomes much harder to hide funds.

As the G20 chair, Australia should be out in front of the pack, ensuring that these measures are implemented in as timely a manner as possible back here in Australia. But I see that the Treasurer has instead pushed our time frame back 12 months. I think dragging our heels in this regard is no good at all; the government needs to get the legislative processes— (Time expired)

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

The member's time has expired. Just to formalise it, Jill, can I ask that you second the motion and reserve your right to speak.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I am pleased to rise on this motion put forward by the member for Newcastle, but I do have some issues with the wording of the motion. The member for Newcastle comes into this chamber and condemns the government for cutting the overseas aid budget. I am sure the member for Newcastle read the recent budget and has been following the debate in public over the last six years and that the member for Newcastle understands that this nation has currently run deficit budgets for the last six years and it will take at least three years until we can at least get that budget back into a balance. So that means that every year we are continuing to borrow more and more money. So if the member for Newcastle comes in and want to spend more money on foreign aid, a very noble cause, she should say where that money is coming from. Where is that money coming from? So you are going to raise taxes on other businesses? You are quite safe. We would like to hear where the money is coming from. Now we know where it came from for the last six years. We know where a lot of the foreign aid budget came from for the last six years: it was simply borrowed. So for the last six years we were actually borrowing money from overseas to give it back overseas. Even the former foreign affairs minister Bob Carr said you cannot run aid on borrowings. So if it is the proposal, which I seem to hear here from members on the other side, to raise company tax rates to pay more to fund their additional foreign investment—

Ms Claydon interjecting—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

The member was heard in silence,.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

let them put that up. Let them put that up so every company knows, so everyone out there in the public knows, that your plan, if elected to government, is to raise the company tax rates so you can spend more on foreign aid.

I would like to give one example of how much of our foreign aid budget does not actually achieve what is intended. The previous government, over its last three years, gave $416 million to the Socialist Republic of Vietnam. Much of that money went into financing a bridge. There was $160 million to build a bridge. That is all very nice and that is all very well, but I think the taxpayers of Australia should be asking: why can't the Socialist Republic of Vietnam fund their own bridges? If the Australian taxpayer is doing it, that simply leaves the Socialist Republic of Vietnam to spend money on other things. Since we were so generous in giving them $416 million, that freed up funds for the Socialist Republic of Vietnam to buy 12 of the latest model Russian fighter jets last year for $460 million. We, the Australian taxpayer, may as well give the money to Putin's Russia to pay for those jets and let the Russians send those jets to the Vietnamese, because effectively that is what is happening. That is what is happening.

There is another point in the motion I would like to raise. The member for Newcastle talks about 'condemning the government for its lack of action on multinational tax avoidance'. They had six years in government. I would be very interested to hear what they did during their six years in government. Absolutely squat! In contrast, we currently have our Treasurer up in Cairns for the G20, leading the world and leading the OECD nations in tackling that problem. So what we should be doing is changing this motion to say that we condemn the lack of action of the previous government and congratulate our federal Treasurer for taking steps and leading the way on multinational tax avoidance.

The other thing I would quickly like to add is on poverty. What we need to understand is that yes, it is correct that extreme global poverty has been halved since 1990. But we need to understand that it has not been aid that has led to that decline. What it has been is the adoption of free market principles.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Ha!

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

What a sad, sad response. The adoption of free markets and the encouragement of entrepreneurial activity: that is what lifts people out of poverty, not handouts. You combine free market principles, encouragement and reward for entrepreneurial activities and an abundant supply of low-cost electricity. That is what lifts people out of poverty. That is what our history shows and that is what we should be encouraging more and more of to make sure that we actually lift those people out of poverty. (Time expired)

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I have to say that the first thing that the member for Hughes has demonstrated is that he has absolutely no idea about aid at all, absolutely no idea about poverty and absolutely no idea about what is happening in developing countries. I have to say that the member for Hughes stands condemned for standing up in this chamber and showing such contempt for developing countries and showing a total lack of knowledge of anything to do with aid and development. I do not know how a member of parliament can actually get to this place with such limited knowledge as we have seen from the member for Hughes.

The member for Hughes talks about budgets and deficits. Everything that a government chooses to do is about priorities. The government that he is part of has a priority of introducing a Paid Parental Leave scheme whilst at the same time cutting money from a budget to provide assistance to developing countries. Talking about the free market being responsible for the improvement in developing countries once again shows he has absolutely no idea what he is talking about. Has he looked at what has happened when companies like Nestle market baby formulas in countries where there is extreme poverty? Has he looked at the exploitations that have taken place in relation to the free market? It has made it easier to exploit people in developing nations. It has made it easier to increase the level of poverty and it has done absolutely nothing whatsoever to improve the situation.

I really do not know what Putin's Russia and Vietnam have to do with this wonderful motion that the member for Newcastle has before us today, which is about the Millennium Development Goals and progress towards making poverty history. It is about improving public health in developing countries. It is a program that is about linking in to shine the light on tax dodging and corruption, using Australia's position as chair of the G20. It is also about taking this opportunity to get rid of the scourge of tax dodging. Christian Aid has highlighted this, and since 2008 developing countries have lost more than US$160 billion through two forms of multinational corporate tax dodging: price transferring and false invoicing.

I am surprised by the member for Hughes's contribution, but I do not think that there are many members in this House that actually do not want to see extreme poverty and hunger eradicated throughout the world. I think that most members of this parliament want to see the Millennium Development Goals reached. I see that this is a way that we as a country can use our role to actually show leadership and to bring about some changes. I really feel that it has been a missed opportunity.

Oxfam called on the G20 ministers to rein in multinational tax cuts. The world's finance ministers need to crack down on avoidance is what Oxfam says. Oxfam's Helen Szoke said that the international tax regime was 'broken' and needed fixing. Reports from the weekend's G20 actually show that we have failed. We have failed. We have not stepped up to the mark. We have made minimal changes. We have given lip-service to multinational tax evasion. We are actually leading to its entrenchment.

I have to finish by saying this government's contribution to multinational tax evasion has been to open loopholes. We closed them; this government is opening them. It stands condemned for that. We want to see poverty eliminated worldwide.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I have spoken about foreign aid many times in this place, highlighting that instead of foreign aid being judged by merely the number of dollars spent, the key indicator of a project's success should be what is actually achieved on the ground. That is exactly what Minister Julie Bishop's new aid paradigm achieves.

While there is no way of waving a magic wand and suddenly making all foreign aid more efficient and effective, there are a number of ways aid recipients, donors, workers, governments and the private sector can work together to improve the efficiency of our system. The cost of aid delivery on occasions appears to outweigh the aid itself, and in quite properly trying to protect the integrity of our aid system we all too often burden ourselves with the bureaucracy and inflexibility that can overwhelm the good intentions.

There are a number of effective partnership relationships to improve aid delivery ranging from public-private partnerships to the whole question of social entrepreneurship. At least 80 per cent of today's assistance comes from non-public sources, up 30 per cent from 40 years ago, according to USAID. It is estimated that from an initial investment of $2.1 billion in public funds, USAID was able to leverage an additional $5.8 billion in private funds and contributions.

From my discussions with Abt JTA, a private aid consulting firm doing some great work in Papua New Guinea, they believe that leverage is crucial. There has been little effort in the past to use the aid program to leverage funds from others and develop collaborative partnerships. However, there is considerable potential to do so. William Easterly, a professor of economics at NYU, believes that is it is important—especially for Western nations—to identify that development happens mainly through home-grown efforts. Easterly believes that the developed nations provide foreign aid and development programs through the lens of Western culture with a focus on significant bureaucracy and set approaches that do not involve the people whom the services are supposed to benefit.

While I was in Papua New Guinea at the end of last year with the Australian Defence Force, I was inspired to some extent by a discussion with Sir Peter Barter and Father Jan Czuba, the President of Divine Word University, about the benefits of institution-to-institution support as an effective method of aid delivery. Father Jan has focused programs within the university to be primarily health and education based so that PNG graduates contribute back to the community in areas that are needed the most. The PNG LNG Project, a joint venture between ExxonMobil and Oil Search, has developed an efficient community health impact management program, which is a leading example of a privately funded aid program.

Significant improvements in facilities' healthcare delivery have occurred in the PNG LNG Project villages. There are many avenues the Australian government can take to improve the efficiency and effectiveness of our foreign aid and, at the end of the day, value for our taxpayer dollars. The coalition understands that our aid effort should be focused firmly within our region, where Australia's interests lie. The foreign minister has also announced some performance targets for the revised program, which are: reducing poverty—by July 2015, all country and regional programs will have aid investment plans that describe how Australia's aid will promote economic growth in ways that provide pathways out of poverty; focusing on the Indonesia-Pacific region, increasing the proportion of country program aid that is spent in the Indo-Pacific region to at least 90 per cent from 2014-15; and empowering women and girls—more than 80 per cent of investments regardless of their objectives will effectively address gender issues in their implementation.

I would also like to point out that, while those opposite like to stand and complain that Australia is not spending enough on aid, we are now achieving greater aid results for every dollar spent under the coalition's paradigm than under Labor's reckless money-throwing approach. Even Bob Carr acknowledged that a nation cannot have an unsustainable aid budget. The member for Sydney committed Labor to spend an extra $16 billion on the aid program yet has not revealed where this additional $16 billion will come from. Labor even raided $30 million from the emergency fund for its blow-out on border protection costs. Yes, Labor was its own third largest recipient of foreign aid budget. Fortunately, the coalition has now restored this money. This shows how careless and irresponsible Labor is with Australia's foreign aid. Only the coalition can be trusted to deliver foreign aid responsibly and in a way that will see the best outcomes for each dollar spent.

Laurie Ferguson (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

There are a number of aspects of this particular resolution. One of them is the foreign aid budget. In relation to the wild outburst by the member for Hughes, where he used the phrase 'the Socialist Republic of Vietnam' five times to in some way disparage foreign aid to Vietnam, he has not been on the forefront of insisting that this very government he is part of not have a foreign aid program in Vietnam. This kind of attempt to in some way insinuate that it is money misspent, and only by the previous government, is absolutely preposterous.

On the foreign aid budget; everyone knows the argument that there have been budget deficits. Let us put to one side parental care and other issues. Even if you have a deficit, you have to make decisions. I think Bob Geldof put it very well in The Guardian during his recent visit to Australia. He said

You are one of the richest countries in the world … You can’t mess with your sovereign promise to the poor, they’re too vulnerable, they’re too weak.

Similarly, another person with a bit more expertise than the member for Hughes, Professor Damien Kingsbury; the Director of the Centre for Citizenship, Development and Human Rights at Deakin University, on 14 May in Crikey spoke of 'savage aid cuts'. He spoke of the current provisions 'ignoring' Millennium Development Goals, and he said that the earlier commitment to lift aid to 0.5 per cent of GNI by 2017-18 'now appears entirely gone'. Karen Barlow, on ABC radio straight after the budget, could speak of 'the biggest savings measure of the budget' and spoke of a fundamental reshaping of foreign aid. We can come about the question of the deficit, but decisions have to be made by government as to how they do it. Quite clearly, the main target was foreign aid.

We come here and hear arguments that, supposedly, the previous speaker has got some 'scientific analysis' which is only known to her and that she is already able to demonstrate that supposedly every foreign aid dollar now being spent is far more effective than those spent for the last 20 years. As to where she gets that evidence from, I doubt there is any source. On 18 July, the Prime Minister, in response to correspondence from me, wrote saying:

It is vital that we help developing countries capture revenue on profits earned in their jurisdiction so they can establish and protect their tax bases. Australia is using its leadership in the G20 to ensure developing countries can participate in and benefit from the reforms.

They are noble sentiments and I would hope that there is some action. However, one has to see this in the context of a government which closed loopholes for international tax evasion. It was a major measure. They actually reduced the loopholes. So to come out here now and say that we are going to be in the forefront is quite questionable.

I also note that the Treasurer has been shouting from the rooftops that, with regard to the question of exchanging financial information, we are supposedly going to be at the forefront of a move towards an international reporting standard that is common. However, the early adopter group of nations, including the major G20 powers such as the United Kingdom, Argentina, France, Germany, India and Italy, have a timetable far in advance of Australia.

The other question here is a question of global poverty. Obviously, there is some comfort to be had from advice that says that 21 per cent of people in the developing world live on $1.25 a day compared with 43 per cent in 1990 and 52 per cent in 1981. I do not doubt that there have been advances, but I notice an article in the latest edition of the New York Review by Ian Johnson called 'The Chinese Invade Africa'. He noted that whilst there is a significant number of people in Africa now described as middle class—300 million Africans spend $2 to $20 a day and they are supposedly middle class—he noted that 60 per cent of those people are in the $2 to $4 category. Indisputably, there is a large challenge ahead of us.

I want to say that Ban Ki-moon, amongst others, has certainly hit the nail on the head with his comment:

We all know the heavy toll taken by corruption. More than a trillion dollars stolen or lost, every year—money badly needed for the Millennium Development Goals.

However, we cannot totally blame African leaders for, quite frankly, the rampant tax evasion. In recent weeks there has been a big focus on Amazon and Google: they are basically operating in countries, doing offshore operations and then claiming it has got nothing to do with the entity on the mainland. There are figures produced that developing countries only take 13 per cent of GDP and taxes compared to rich countries taking an average of 34 per cent; a discrepancy mainly due to tax evasion.

We now have a situation where there is talk of long overdue of international— (Time expired)

Debate adjourned.