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

I move:

That this bill be now read a second time.

Mr Speaker, may I just begin by properly congratulating you on your elevation to Speaker. You are a fine man. You have been a wonderful colleague in parliament. I know this is the course that you chose to take, but I wish you all the very best. You have my unqualified support in your role. I know Pam and the children will be very proud of you as well, for a long period of time.

I also want to properly recognise that today is an auspicious occasion, not only because I am introducing the Asian Infrastructure Investment Bank Bill but also because, in less than half an hour's time, Minister Robb and I will be hosting the Chairman of the NDRC, which is the most powerful economic body in China. Chairman Xu is here for the first strategic economic dialogue between Australia and China in Australia. We met in Beijing last year. Last year we set ourselves a goal to facilitate President Xi's visit to Australia and get renminbi clearing and a range of other initiatives announced. We also set a goal to have the free trade agreement signed between Australia and China, and we have achieved that. The third initiative was that we could resolve our differences and Australia would join the Asian Infrastructure Investment Bank, and we are doing that here and now. We are getting on with the job because ultimately a deeper and more profound relationship with China means more jobs for everyday Australians.

Unquestionably, Asia faces a major infrastructure financing gap, estimated to be worth US$8 trillion over the next decade. That is the funding shortfall for infrastructure that is going to grow the Asian economy.

In a significant step to address this challenge, Australia is becoming a founding member of the Asian Infrastructure Investment Bank. This will help to fund major new infrastructure throughout the region.

This is a global multilateral initiative that will strive to bring best practice for the delivery of much-needed infrastructure to the entire region. It will catalyse private sector investment and it will co-finance projects with other development banks and private sector financiers. This is not a development bank but it is a bank that funds development.

Australia's prosperity and economic growth are tied closely to the region. It is therefore important that we are involved in a major regional economic initiative such as the AIIB.

On 29 June this year, I gave effect to the government's commitment to join the AIIB by being the first person in the world to sign the bank's articles of agreement in the Great Hall of the People in Beijing. My signature was followed by those of representatives of 49 other countries.

The decision to join the bank was made following extensive consultations with key partners inside the Asian region and outside the Asian region. This included participating in negotiations on the bank's design with 56 other prospective founding member countries.

These negotiations resulted in a commitment that the bank will be based on world's best practice. This will ensure that all members will be involved in the direction and decision making of the bank.

As the fifth-largest regional shareholder of the bank, Australia will be able to influence the bank's decisions and strategic direction.

Membership of the bank will provide an opportunity to further strengthen our engagement with the entire Asian region. It will also enrich our relationships with other member countries, such as New Zealand, Singapore and Vietnam.

Australia will continue to work with China and other members to establish an institution that is effective, accountable and transparent and that complements the work of other institutions, such as the World Bank, the IMF and the Asian Development Bank.

Australia will lead a constituency on the AIIB board of directors. Negotiations on the composition of this constituency with established partners in the region are well advanced.

The AIIB will have a strong commercial focus. Its goal is not poverty alleviation or development purposes such as that of the Asian Development Bank or even the World Bank. It is simply about funding the infrastructure that is going to grow the Asian economy to our great benefit. Of course, we will work closely with the World Bank and the Asian Development Bank and learn from their long experience in promoting infrastructure in our region.

This bill will implement our obligations under the bank's articles of agreement.

First, it will provide an appropriation for the payment of Australia's capital contribution to the bank.

The bank will initially have US$100 billion of total authorised capital and is expected to start operating by the end of this year.

Australia's initial shareholding will be US$3.7 billion, including US$738 million in paid-in capital. The remaining US$2.9 billion is callable capital and will be a contingent liability on the Commonwealth balance sheet.

Australia's contribution will have a zero direct impact on the underlying cash balance, fiscal balance and net debt, as we are purchasing a shareholding in the bank.

Second, the bill will authorise me, as the responsible minister, to issue promissory notes to the bank to discharge our financial obligations.

Third, the bill will enable regulations to be made to extend necessary privileges and immunities to the bank, its staff and experts, and consultants performing services for the bank.

Membership of the bank will provide valuable trade and economic opportunities for our country. Australian businesses will benefit from improved infrastructure throughout the region, which will also help our commodity exporters.

In plain terms, if we can build new railway lines and ports in the region, that will mean that our product not only goes into those facilities. Our iron ore will go into the railway and port construction. More particularly, that infrastructure will then facilitate our agricultural produce getting to market. The Minister for Agriculture, who is not far away from going to Indonesia, knows that, if we can get better access through new ports, better railways and better transport corridors in Indonesia, we can get more of our agriculture to market. So we will win all ways. We will fund and provide the infrastructure. Our experts in infrastructure are there giving advice on how to build the ports, airports, railways and even the universities—whatever the case might be.

If we build up Asia, as a middle-class emerges, they are going to want our food, education and health services. They are going to want to travel to Australia and invest in our services. This is the way to go. Prosperity in the Asian region is to our enormous benefit because, ultimately, it will mean more jobs in Australia. It is not pie-in-the-sky stuff. This is real, tangible, meaningful, actual policy being implemented that is a game changer. That is why we are joining the Asian infrastructure bank. It is not a foreign policy play; it is actually in our economic interests. It is in the economic interests of every single Australian that we participate in building the infrastructure in the region because, the more prosperous the Asian region is, the more prosperous our nation will be.

That is one of the reasons why we now have China as our biggest trading partner. For the money that we send to China to buy Chinese products, multiples of money from China come here to buy our products. Nothing illustrates that better than the breakthrough in live cattle exports by the Minister for Agriculture. How many cattle?

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

Up to a million head a year.

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

Up to one million head of cattle per year. I have been to the Cloncurry Saleyards over the years. After the worst public decision I have ever seen—the immediate banning of live cattle exports from Australia based on a TV report—the farmers up there had no cattle in their saleyards and were nearly getting to the point where they had no option but to shoot their live cattle because they did not have the feed. When I went back to the Cloncurry Saleyards, 330,000 head of cattle went through those yards to provide food to people in developing countries who did not have access to food. That is what we are doing—we are feeding people who are more disadvantaged than us. This is what we are trying to achieve. We are trying to achieve an improvement in the quality of life for everyone.

Unquestionably, by making this decision to join the Asian Infrastructure Investment Bank, the parliament is facilitating the growth of Australian jobs and the growth of our opportunities. I thank colleagues for their support and also their advice during the course of negotiations to join this bank. This will deepen the relationship between Australia and China. It will deepen the relationship between Australia and many other countries that have joined the AIIB. Most particularly, this is going to represent an opportunity for new jobs and new prosperity for everyday Australians. I commend the bill to the House.

Debate adjourned.