Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

The Asian Infrastructure Investment Bank will create jobs, promote international trade and boost Australia's prosperity. The AIIB's purpose is to build the infrastructure needed by countries across the region, building trading capacity, productivity and prosperity. It will fill the gap in infrastructure across developing and less developed countries across the Asia-Pacific.

These countries are not just the nearest neighbours to Australia but are also our greatest potential customers. For example, the World Bank estimates that Indonesia has a reported $600 billion infrastructure investment gap over the next five years. Indonesian maritime and logistics infrastructure alone makes up $50 billion of this infrastructure gap over the next five years. With more than 10,000 islands and a population of 250 million, this kind of infrastructure is crucial to ensuring that products can get to market and services are delivered to communities. Indonesia is not alone in this regard, and the infrastructure gap is massive. But it is also a representative of the potential. From wool, wine and wheat to education, tourism and financial services, building the capacity for Asia will mean our neighbours can buy more of our goods and that we can bring more of our product to their markets. We can reach new markets and expand access to our existing markets.

Simply, joining the AIIB is in our interests and it is in our interests to be a founding member. With northern neighbours like Indonesia, Malaysia, South Korea and China, it is absolutely in our interests to join the bank and to make sure we are a founding member. The government have signed the three free trade agreements in this last year and a half, with South Korea, Japan and China, because we recognise the potential of the Asian market and how our future is dependent on our ability to access it. We need to be able to access those markets for our goods and services, but one of the things we can definitely do to help is to make sure that the countries of Asia have the infrastructure to be able to do that, and this is what the bank will focus on. If we can have the infrastructure in Indonesia improved, not only will it enable goods and services to flow more readily between the many islands in Indonesia but also it will give greater access to Australian goods and services, because if we can get access to better infrastructure in key ports in Indonesia then obviously our goods will flow more freely, there will be more demand for them, and that will put more money back into the pockets of Australian businesses, including Australian service providers and Australian farmers, and this will set up the future of our nation.

There is a possibility that Australia will also be a beneficiary of the AIIB's development loans, with an ability for the government to be a recipient of money in order to develop capacity in rural and regional Australia. This is a very important point. When I speak to my colleagues from regional and rural Australia—and the majority of them are obviously on the coalition side—one of the things that never ceases to amaze me is how much we need to continue to ensure that regional and rural Australia gets the infrastructure that it needs. Obviously the future is bright for agriculture, in particular, in regional and rural areas, and we need to ensure we have the infrastructure available to get the goods and services from regional and rural Australia to market and to get them to our neighbours in Asia and to other parts of the world, and this requires funding. It requires funding for ports and requires funding in particular for rail and roads to ports. This is something that as a nation we have not been as good at as we should have been, and it is something that this government is focusing on. To start with, in my electorate two major pieces of road infrastructure are currently being undertaken. The Princes Highway has been duplicated through to Colac and my hope is it will be duplicated beyond that. Also, the Western Highway, the key freight route between Melbourne and Adelaide, is being duplicated as far as Stawell, with further works to be undertaken after that. The government is putting its money where its mouth is, but, if we can get better access to even further funds from the bank, you can rest assured that those in regional and rural Australia will see this as an absolute bonus. The more we can do to help especially state governments with their part of the road network, the better we will all be. State governments in particular have been asleep at the wheel when it comes to maintaining their road networks, let alone upgrading and improving them, so once again we will need to step up to the plate on this.

The AIIB will operate like currently existing development banks such as the World Bank. There is nothing extraordinary about this. The way it will operate will be similar to the World Bank, and we have all seen where the World Bank has operated effectively. I must say the World Bank has had to learn as it has gone through its various stages, because some things the World Bank have done have not got the results and have not been implemented as successfully as we would all have wanted. The World Bank continues to adapt and continues to try and ensure that its funding and projects continue to deliver, and the AIIB will operate very similarly to this.

To find an example of how it works, we need only look to Pakistan, where in Karachi the port is being completely rebuilt thanks to a $115 million loan. Karachi's port, prior to the development, took 60 per cent of Pakistan's imports. After the World Bank's development project is complete, Karachi's port capacity will be tripled. The project is expected to be finished at the end of the year. For a developing country like Pakistan, it is incredibly important that it can get this type of project up. You will have to excuse me, Mr Deputy Speaker, I have a touch of the hiccups and I might just pause for a glass of water—

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

You have leave given, Member for Wannon.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

It is the first time I have experienced hiccups during a speech.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Hansard is looking forward to it!

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Hopefully that glass of water will improve the situation, otherwise, as someone has quipped, Hansard is going to be making some interesting recording during the rest of this speech. There might be some editing required. Thank you for your indulgence, Mr Deputy Speaker.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

You are welcome.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Back to this very important matter: a country like Pakistan is obviously a developing country. In my view, it is incredibly important that we enable these countries to facilitate trade, because trade, in the end, is a better form than aid of their making sure that they have a sustainable future. If we can put the infrastructure in place, like the Karachi port, which will enable them to triple the amount of goods going in and out of that port, that is a significant development for Pakistan. That means Pakistan will grow. It means the income of its citizens will grow. It will mean that not only the demand for goods and services from within Pakistan but also demand for external goods will improve, and that means something for Australian exports. For example, we export wheat to Pakistan. There will be a greater demand for Australian wheat. The benefits then flow through to Australia. This is why it is in our interests to support a bank of this nature.

That example of the Karachi port I think is an excellent one because, as I say, this is not just excellent news for the people of Karachi and Pakistan, who will be able to bring more into their market and community, but also an incredible opportunity for a trading nation like Australia. Currently, we have exports of $423 million in goods to Pakistan each year. Of this, our top exports are goods transported through shipping—seeds, vegetables, coal and fertiliser, worth $271 million, and wheat, as I mentioned previously. Pakistan's new capacity will mean that our farmers and miners can ship more goods to Pakistan without being constrained by port capacity or expensive wait times at the dock.

However, the World Bank must cater for the globe, and we must wait for projects such as this to develop across our region. With the new AIIB, these projects can be provided faster and on our doorstep, where our exporters need them most. As a growing middle class expands in Asia, the AIIB will provide funds infrastructure, potentially unleashing demand on Australian commodities such as beef and dairy. These commodities will continue to expand their market in Australia's closest market.

It is interesting what a few people have said on this. John Brumby, the former Victorian Premier, has said:

Asia faces chronic infrastructure shortage and the AIIB is an important mechanism to … support regional growth. Strong regional growth is good for Australian business and good for the region …

The Business Council of Australia also has said:

Australian companies will benefit from opportunities to participate in developing and building new AIIB financed infrastructure, as well as having access to improved infrastructure which facilitates trade in the region.

And then of course we have the Treasurer, Mr Hockey. He has said:

This is real, tangible, meaningful … policy …

I think that is a very succinct way to sum up. This is real, tangible and meaningful policy.

It is real because it will deliver important economic results for the region. It is real in that the impact of it will not only be felt in Asia but felt here in Australia as well. It is real in that it will make a difference to people's lives. In particular, in developing countries, it will make a difference to the lives of those people who are living on or below the poverty line, because they are the people who ultimately, if we can get economic growth going in these developing countries, will be lifted up out of that poverty zone. That is what this bank is all about.

It is tangible because it sees the region coming together and cooperating to lift its growth. It is tangible in that it means that we will be cooperating together as a region. It is tangible in that it means that, as nations, as we prepare for the future of the Asia-Pacific region—and we know that the Asia-Pacific region is the growth region of the world—we are setting it up to continue to grow and continue to be the part of the world which the rest of the world will look to for serious leadership.

And it is meaningful policy. It is meaningful policy in that this means that Australia is doing its part. Australia is playing its part. It means that once again Australia is setting itself up for the future. I must commend the Treasurer because the Treasurer fought long and hard for us to be able to be a founding member of the AIIB. He was prepared to go out and say: 'This is the type of leadership that Australia must show in the region. Let's not be frightened about the potential for this bank to be set up. Let's actually embrace it. Let's see where our future lies—it lies in this region—and let's make sure that we are very much a part of it.'

It is just like the way that the government is leading the way with the China FTA. We are not being weighed down by negativity and pessimism about certain implications which are completely ill founded; we are prepared to say this is the right thing for our nation's future. So, in a similar vein to the China FTA, it is a pleasure to be here today to support the AIIB. I say to the Treasurer: well done for your leadership on this issue.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Asian Infrastructure Investment Bank Bill 2015, and, like my Labor colleagues, I am pleased that the coalition finally, after months of dithering and infighting, agreed to support the Asian Infrastructure Investment Bank. Labor had been calling on the Abbott government to support the bank for many months. This multilateral development bank has the potential to boost infrastructure investment in our region by more than $100 billion. It is an opportunity for improved infrastructure and to meet the infrastructure needs of our neighbours in this region. We can see that this bank will give rise to great opportunities and has the potential to make a great contribution to economic development in developing nations throughout our region, so I am pleased that Australia is committing $930 million to the bank. The bank is supported by many of our friends and neighbours across our region and beyond, and it is a shame that we had to play catch-up when many of our neighbours saw the opportunity and the benefits very early, after the initiative was first made public.

It seems obvious to Labor that our nation needs to be part of this new institution, an initiative of our nation's great friend China. China will have over 30 per cent of the equity in the bank at the outset. When the constitution was signed by 50 of the 57 founders in July, President Xi Jinping called it 'a historic step'. Labor has shown great leadership over many decades in building the relationship between China and Australia, and it is in the context of that great leadership that it is particular pleasing to support Australia's involvement in this bank today.

As we heard repeatedly from those who spoke on the condolence motion when we lost Gough Whitlam last year, Prime Minister Whitlam was a pioneer for the relationship, both in opposition and as Prime Minister. He advocated for the recognition of the People's Republic from 1954. Showing great leadership, with the support of our then national secretary Mick Young, he led a delegation to China in 1971 from opposition—he visited China before Henry Kissinger. On that visit he met with the Premier of China. That lengthy meeting was the first meaningful contact between Chinese and Australian political leaders since 1949.

Gough went to China in 1971 because of trade. There was a concern at the time that China might not renew its wheat contracts with Australia. Then Prime Minister McMahon was making excuses to Australian wheat growers, but Gough acted, drawing the Prime Minister's outrage. The consequence of Gough's action was a renewed understanding that to promote trade between our two countries there needed to be diplomatic recognition. A short time later the then conservative Prime Minister McMahon rubbished the visit and said:

We must not become pawns of the giant Communist power in our region.

At the time, Prime Minister McMahon thought Labor's support of our nation's relationship with China was an asset to the Liberal Party. Pleasingly, a short time later, in 1973, the then Prime Minister Whitlam became the first Australian Prime Minister to visit China.

The next Labor Prime Minister, Bob Hawke, was another great supporter of our relationship with China. He moved swiftly to build a relationship with Chinese leaders and in February 1984, following talks with Premier Zhao Ziyang, announced an agreement to integrate China and Australia's iron and steel industries. As the Australia-China Relations Institute at UTS has recorded:

Between 1977 and 1984 two-way trade—

had—

an annual growth rate of 12.3 percent. During 1984-1985—

the financial year 1984-85—

Australia's exports to China rose by 73.4 percent, exceeding $1 billion for the first time. In the space of one year China went from being Australia's tenth largest export market to fifth—

in that year.

Prime Minister Hawke built up trade between our countries in iron ore, coal, wool, agriculture and other metals. That work stood us in good stead for the decades since. Prime Minister Keating was a strong supporter of the relationship. For example, in his visit to China in 1993 he sought to increase trade, not just in commodities and agriculture but in advanced manufacturing and services, raising the prospect of exports in relation to telecommunications, computer science and environmental technology.

Prime Minister Rudd was known for his efforts to increase Australian understanding of China and to strengthen the already strong relationship with what had, by his prime ministership, become Australia's largest trading partner. Of course, Prime Minister Gillard commissioned and delivered her white paper Australia in the Asian century. This paper focused on the opportunities that lay ahead for us in Asia, including in China, but of course not to the exclusion of all other Asian nations, taking into account the opportunities that we found in all of our neighbours in our region, including in India, Indonesia and other South-East Asian countries. Prime Minister Gillard believed that Australia does not have to choose between the United States and China—that we can honour our treasured alliance with the United States and also be a friend to China.

With this strong and principled history of building the relationship, under our current leadership of Bill Shorten and his principled approach, it should come as no surprise that Labor supports Australia's involvement in this China-led initiative: the Asian Infrastructure Investment Bank. Of course, supporting the relationship and being a true friend does not mean that we should abdicate our responsibility to get the best deal for Australia in our dealings with our friend. For example, being a friend to China does not stop Labor from asking questions about trade deals and it does not prevent us from standing up for the national interest. So it is with the China-Australia Free Trade Agreement.

Like many others, I am a great enthusiast for greater trade with China, for reducing tariffs, for providing opportunities in the primary production sector and also for our highly skilled services sectors. I fervently wish to see more Chinese visitors in Australia, whether for holidays or to gain a great education. But that does not relieve me or anyone else in this place of the obligation to take seriously the ramifications for domestic jobs. It is not only right that we should ask questions about how labour and skills arrangements would work under a free trade agreement but it is also our obligation as representatives. Similarly, as representatives who believe in democracy and sovereignty, we should be asking questions about how investor-state dispute resolution will work and what that will mean for our nation. No-one need look further than the current plain-packaging case to be reminded of the importance of that issue. Calling us racist or xenophobic for asking these questions is not just aggressive, ridiculous and dangerous; it is completely divorced from Labor's historical context. It is Labor who have shown leadership in building ties and trade with China, and we will always do so.

The coalition's lack of nuance and their refusal to engage in mature discussion is deeply regrettable, but what else would we expect from a government who are more interested in fighting than in promoting the national interest? This government's paralysis is so profound that they have given the impression that our whole politics is broken. The Prime Minister is so short-sighted that he wants to call us racist rather than engage with us to work through our concerns and negotiate in the national interest. I hope for the sake of our country that this dinosaur of a Prime Minister, who thinks winning points against Labor is more important than governing, will soon be consigned to history.

The coalition's conduct in relation to the discussion about the effect of the China-Australia Free Trade Agreement seems all the sillier when you reflect on the fact that they originally declined to join this great China-led initiative—the Asian Infrastructure Investment Bank. In October last year, following division within the government—something all too familiar under this Prime Minister—Australia declined to sign up. At the time Paul Keating was scathing. He said:

The government's decision to decline founding membership of the Chinese-proposed Asian infrastructure bank is the worst policy decision the government has taken since assuming office.

That is a pretty big call. Of course, there are a lot of terrible policy decisions to choose from. Mr Keating went on to tell The Australian Financial Review:

It is the worst because of the far-reaching implications and consequences of deciding to have nothing geo-economically to do with China at a time when China is prepared to step up to greater responsibilities in the region.

Remember this was a few weeks before the G20, with Australia holding the presidency. We were claiming to stand for worldwide growth, but the government was dithering and divided over whether to join this bank, despite the economic development opportunities it offered.

At the time, Professor James Laurenceson, who is a Norman Park boy but is also the Deputy Director of the Australia-China Relations Institute, wrote:

… trying to make sense of rejecting the proposal on the basis of economic reasoning is nigh on impossible. In 2011 the Asian Development Bank (ADB) estimated Asia required US$750 billion each year through to 2020 to finance infrastructure needs. In 2012 the amount the ADB lent for infrastructure was just US$7.5 billion. It is no surprise that among the government ministers it was Treasurer Joe Hockey and Trade Minister Andrew Robb who were keen on Australia joining the AIIB.

What a shame it was that they were rolled at first instance and is it not pleasing that finally the right decision has been made and we have now agreed to sign on to the AIIB. Professor Laurenceson went on to say:

The decision to rebuff China’s invitation is awkward to say the least. Australia made reducing barriers to infrastructure investment a focal point of the G20 agenda. There is also the small matter of the memorandum of understanding the Australian and Chinese governments signed in 2012 on enhancing cooperation in infrastructure construction.

It was a highly perplexing and strange decision at the outset. As I said, we welcome the fact that after months of dithering and infighting with ministers disagreeing with each other, the Abbott government has agreed to formally sign up as a founding member of the Asian Infrastructure Investment Bank. We are among 50 of the 57 founding members who signed up on 29 July this year.

This new bank, as I said, will have significant Chinese equity but we will be one of the major shareholders. That is because Labor understands the potential that this bank has to contribute to infrastructure in our region. It is a shame Australia had to play catch up. Many of our friends in the region and beyond like New Zealand, United Kingdom, South Korea, Germany, France, Italy, India and Singapore threw their support behind the bank well in advance of Australia doing so. It was a great shame that so much time was wasted as Abbott government ministers leaked against each other from cabinet and from the National Security Committee. There was an embarrassing display by the government but, now that has been dealt with, we hope that the government will engage constructively on the priorities for the bank and work to ensure robust transparency and accountability arrangements.

Labor has been saying for months that we should support the establishment of this bank. By contrast, there was total mishandling by the Abbott government. For Australia to chart its course in this world, for us to maintain our history as a nation that leads the fight for a better world, we must embrace a vision that actually looks beyond our own borders and looks at how we can make a contribution to our globe and to our region. We are a wealthy country. Under the last Labor government, we came out of the Global Financial Crisis as the 12th largest economy in the world because of the work that was done. We had a AAA credit rating. We had a strong economy. We are a nation that can perform well above what might be expected of a small nation of only 23 million people. We have traditionally done so well being part of the globe, being part of an international community that wants to see improvements in development, improvements in peace across the world. Being involved in multilateral organisations like this bank is an important part of the work that we do.

It is incredibly pleasing to support this bill, to support the contribution that our nation will make to the Asian Infrastructure Investment Bank and also to see that the government has finally come to a position of being able to—albeit belatedly—agree to sign on as a founding member of the bank. I commend the bill to the House.

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

It is with great privilege that I rise to speak on the Asian Infrastructure Investment Bank Bill 2015. My very first trip overseas as a parliamentarian was to Papua New Guinea and Bougainville with the then opposition foreign affairs spokesperson, Julie Bishop. We were able to go up to Hides in the Highlands to see the magnificent infrastructure around the LNG projects and the work that was done, the sheer engineering skill that that project was able to bring into the country.

We then ventured over to Bougainville. It was when we were in Bougainville that building capacity and capability with aid really struck home to me. It was just after the Queensland state election when the Bruce Highway had been cut for about a week leaving Labor, Liberal and LNP banners and those sorts of things stranded on the side of the road that we travelled the road from Buka all the way round to Arawa. That road is maintained by what was then AusAID. We provide the jobs, we pay the people and we provide the equipment that grades that dirt road every year. The reasoning behind that was that if you build a bitumen road, it is good for a while but in equatorial regions and tropical regions potholes soon appear and it becomes problematic. A place like Lae is the pothole capital of the world.

What we decided in conjunction with the Bougainvillians was that we would provide the work to make sure that this road was graded every year. The road came up to streams that the Japanese had been in. Jane Prentice, the member for Ryan, told me that some of these streams flood so quickly that people are locked in for almost 48 hours, unable to cross. I said, 'I am from Townsville and we have just been isolated for seven days.' It was one of those things. The bridge was a single lane concrete bridge across a couple of these streams. It had a magnificent great big ceramic plaque saying it was donated to the people of Bougainville by the Japanese government. The Bouganvillians was so very proud of these bridges and so very thankful to the Japanese government for providing these bridges. They did not recognise the work that the Australian government did in relation to providing the road on which we travelled. It comes down to how you present and sell your achievements from your aid dollar.

We have to be very wise and we have to very frugal in the way we present our dollar. I think the way we are going to work the Asian Infrastructure Investment Bank, the AIIB, is going to be a good way of making sure that, as a region, we are able to put this up there and therefore remove the temptation for some nations to put themselves out there as delivering for the people. What we could have done on that road was spend another million dollars putting up big signs with Johnathan Thurston from the North Queensland Cowboys saying, 'This is what the Australian government has delivered for you.' What AusAID did in those days was to deliver the service, and that was their role.

When we came to government, we brought AusAID into the Department of Foreign Affairs, because we need to be better at telling the people what we are doing and how we are doing it. Aid into these regions has to be twofold. There has to be capacity building for infrastructure and there has to be programs for education and health, and programs that help lift people out of poverty—that is crucial. Programs that deliver aid for education, health and physical wellbeing do not have so much room for 'corruption', for want of a better word. When there are massive infrastructure projects and massive projects like the rebuilding of ports and bridges, there is room where some people in some countries in some instances can rake some money off the top. That is what the AIIB must work against. Going in as an organisation will remove the temptation to try to do a better deal. It will ensure it is our infrastructure as opposed to Korea's infrastructure, the Philippines' infrastructure or China's infrastructure. If we do those things and do it as the bank, if we make sure it is the government of that sovereign nation delivering it for their people in a commercial capacity, then we will surely get a better result.

I congratulate Treasurer Joe Hockey for his ability to argue the case that we should join this. I think we are so much better inside the tent that outside the tent. We have to project this and use this in the region to try to build capacity in these nations and reduce the level of innate corruption. I do not like to use the word 'corruption', but I do not know a better word for it. If you are using these sorts of things to line your own pocket or structuring a tender into these countries where some people get more benefit than others then, for me, it is about corruption. It is not just about the ability for these countries to perform better. We must make sure it is a two-way street. If they get better facilities then they will be able to receive and process our goods quicker. If we are able to get the port in Lae, for example, to work better then all the goods coming in and out of Lae and Papua New Guinea will be transitioned so much quicker. It will be done so much better.

I see a bunch of schoolkids up in the gallery behind the glass. I say congratulations to them for coming to Canberra. What we are doing here with this, as well as with the China Australia Free Trade Agreement and the other free trade agreements, is about their future. It is about making sure that when they leave school, they will have the ability to enter these markets. Because we live in Australia and we are geographically isolated does not mean we cannot provide services, access and value into these regions. That is what this place is all about. As a parliament, we have to make sure that we do get into this space, that we are aggressive when it comes to being a member of this. We have committed $930-odd million in capital over the next five years to be a part of this bank.

I live in Townsville in North Queensland. The closest capital city to Townsville is not Brisbane. The closest capital city to Townsville is Port Moresby. My region includes the Solomon Islands, a nation which is coming out as a result of what is surely the greatest piece of foreign policy that this parliament has seen in many, many decades—the Regional Assistance Mission to the Solomon Islands. They now have a functioning police force, a women's chamber of commerce, more infrastructure on the way, a budget in surplus and economic growth at about seven or eight per cent—albeit from a low base. You can see all these positive things now. That is what Australia has been able to provide in that space.

Looking at the Asia-Pacific region, there are massive challenges but there are also massive opportunities for us. There are massive opportunities for Australian companies to engage in this space. There are massive opportunities for Australians to participate in the tender process and become part of the supply chain in this space. There are massive opportunities for us to say that we care about our region. As part of this development bank, we will ensure that we are delivering to our region. There is a competitive edge that allows some countries in some instances to provide infrastructure that may not be necessary or superfluous to need, or to supply infrastructure for a benefit other than for the benefit of the people. Those are the things that we have to make sure about.

As foundation members of this bank, we will be able to provide support and help with the policy and tender settings and processes, and we will end up with a better result. Our aid dollar will get a better result into these regions. The Asian Infrastructure Investment Bank will be able to provide the solid, physical infrastructure to those countries and it will be the country that will deliver it with finance, and then we will be able to deliver the aid in the form of programs which will lift education levels. Education is the secret to everything. If you get a good education, you can get better health. If you get a good education, you can build the things yourself. If you get a good education, you can get better off financially. If you get a good education, you lift the whole country. That is what we must do in our region.

We have some very big challenges in our region with the likes of poverty, domestic violence, type 2 diabetes and climate change. We have some very real issues. What we have to do is make sure that we are addressing those issues. What we have to do is make sure that, wherever possible, we are addressing the whole issue not just part of it. I welcome our position as a founding member of the Asian Infrastructure Investment Bank. I welcome Joe Hockey's commitment to this. I think he has done a fantastic job to get the government to become a partner in this. I think we are so much better for being part of this and for being part of something that is going to be at the forefront of our region's development. I think it is something that we can do. If we can badge it properly, it will be a magnificent part of my region's economy.

At the end of the day, there are 149 people in this room here—not right now, but when it is full—and we all come here with self-interest and with the interests of our seat, our city, our region and our country. What I want to do is make sure that we are projecting a positive image in our region, that we are projecting a proactive image into our region and that we are extending a helping hand into our region to make sure we are able to lift all boats and help all peoples deliver the kind of infrastructure that means they can all have the kinds of lives they want to have in those countries. This is a great bill. I want to make sure that we support this. I thank the House very much.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Machiavelli once noted the importance of making the right decisions at the right times. He said: 'Tardiness often robs us of opportunity and the dispatch of our forces'. The Italian philosopher was of course talking about military affairs. But being in the right place at the right time is just as important when it comes to making big economic decisions. That is why I was concerned that, when the Chinese government first proposed the creation of the Asian Infrastructure Investment Bank late in 2013, the government dithered; it obfuscated. Mired as it is in internal division, the government mucked about for months before committing itself to what should have been seen as a policy no-brainer.

Australia is a part of Asia. We trade with Asia. It is absolutely in Australia's interests that the nations of our region have efficient infrastructure, are able to grow and have higher living standards. If these nations have efficient ports and distribution systems, it is all the better for our exporters, not to mention Australian companies that are involved in the Australian infrastructure market. We must do everything we can to remove infrastructure bottlenecks, particularly in fast developing nations like China and India. That is because fewer bottlenecks means easier movement of Australian goods into these markets.

It is also fundamentally because of this that we should support the lifting up out of poverty of everyone, regardless of where they, through an accident of birth, live. And infrastructure is a key to economic growth and development. Australia has a responsibility to play a role in our region, as well as throughout the world. If we play that positive role, in the end it is good for them; but it is also good for our national interest. It is clear that our trading relationship with the nations of our region is expanding. That provides massive opportunities. But, if the opportunities are not able to be realised, then of course our economic growth will be smaller than it would have been otherwise. So that is why we are very supportive of the government's decision—belated though it was—to sign up to the Asian Infrastructure Investment Bank.

I must say, it is consistent with the approach that Labor has had from the beginning when we supported this initiative. Indeed, in government we laid groundwork for cooperation between Australia and the Chinese government when it comes to infrastructure. In December 2011, I visited China and had discussions with my counterparts about how we could improve the cooperation on infrastructure between our two great nations. That led to the signing of a memorandum of understanding, here in Canberra on 10 April 2012. The MOU on enhancing cooperation in infrastructure construction was signed by me, as the Minister for Infrastructure, and by the Chinese Minister of Commerce, Mr Chen Deming, at a function here in Parliament House.

This MOU means closer cooperation on planning of projects, exchanging information on investment opportunities and technical expertise, training and education, joint conferences as well as joint infrastructure projects in the future. In the end, it is about creating more jobs, tapping more economic opportunities and delivering better infrastructure in both Australia and China. As a result of that a working group was established, with membership from government departments and agencies, industry organisations and financial and business partners to help implement the commitments outlined in the MOU, which were of course a prelude to the celebrations of the 40th anniversary of diplomatic relations between Australia and the People's Republic of China.

This was a particularly important initiative which grew out of Gough Whitlam's historic mission to China as the leader of the Australian Labor Party. The coming to office of the Whitlam government meant that that was put into practice with that recognition. At the time, the two-way trade between Australia and China was $113 million. Today it is well over the $100 billion mark. That is an example of the benefit that can be got from Australia having an enhanced relationship in our region.

As a minister I was very pleased to make four visits to Indonesia to promote the Indonesian Transport Safety Assistance package between Australia and Indonesia. This was a Howard government initiative commenced towards the end of its term in office. We continued and, indeed, extended it. It was very important—we had an MOU on transport cooperation between Australia and Indonesia that I signed on 15 December 2010—and has led to a great deal of cooperation between Australia and Indonesia in road infrastructure, in the operation of their airports and in the maritime sector, particularly with regard to maritime safety. It has been a major benefit.

Last month I attended meetings in Hong Kong. One was with the Australian Chamber of Commerce in Hong Kong. This is the largest chamber of commerce outside of Australia. It plays an absolutely critical role in promoting Australian business interests not just in Hong Kong but also into mainland China and, indeed, the entire region. There were more than 30 Australian business interests at the meeting, and afterwards I was taken by Boyd Merrett and Paul Freeman of Leighton Contractors to have a look at the work they were doing, providing leadership as Australian businesspeople, in extending the rail line, the metro network, to the south of Hong Kong Island. I had a practical look at the engineering challenges that are there. The work they are doing is of great benefit of course to the people of Hong Kong. The fact that we have that Australian presence there is also of great benefit here in Australia.

The Asian Infrastructure Investment Bank provides opportunities not just in terms of the finance sector but also for Australia to increase our engagement in the infrastructure sector in the region in an absolutely vital way. Australia's total shareholding in the Asian Infrastructure Investment Bank will be US$3.7 billion, comprising US$738 million in paid-up capital. It will be paid in five equal annual payments, starting from when Australia ratifies the articles. There will be zero direct impact on the underlying cash balance, fiscal balance and net debt, as using cash to purchase shares represents a change in the composition of the Australian government's assets. It is an investment rather than an expenditure. The creation of the bank is expected to boost infrastructure investment in our region by more than $100 billion. That provides an opportunity through the growth of that infrastructure market for Australian firms to benefit directly.

We hope the government will engage constructively on priorities for the bank and will work to ensure that robust transparency and accountability arrangements are put in place. Not only will this institution assist growth in our neighbourhood in terms of Asian nations; it will also open up opportunities for our infrastructure providers like construction companies, engineers and accountants. Many Australian companies are already active in this area. I have pointed out the change that was made in China with the MOU on cooperation, but wherever you go in the region—whether it be China, India, Vietnam, Indonesia, the Philippines, Japan or anywhere else—there is a very strong Australian business presence. The presence of Australian businesses is particularly important.

Another opportunity we have is that, because of our strong legal framework and support for the rule of law and proper business practice, Australia can provide international companies with a base for their operations in the region. Certainly, that is what a number of companies based in Europe have done. For example, growth has occurred in the presence of companies here. I have visited the headquarters of Bouygues, a French-based company, outside of Paris and discussed with their senior executives about them establishing a presence in Australia. Ghella, an Italian company, participated in the Italian infrastructure delegation that visited the parliament here in November 2012, which was led by the Italian Secretary of State, Mr Staffan de Mistura. That was the largest ever delegation from Italy to visit our shores. This extremely successful delegation resulted from my invitation when I visited Italy and met with Confidustria, the industry body that provides such an important leadership role in Italy. Major companies such as Ansaldo, Ghella and MERMEC are already playing a key role, and those companies played a key role here in construction of the South Road Superway and the Legacy Way tunnel in Brisbane. Importantly, by having a presence here and using that as a base into the Asian region, we can benefit in a big way in terms of infrastructure development and boosting our economy.

So I commend the government for getting there in the end and supporting this initiative. I say to the government that they should do a little bit more building and a little bit less talking about infrastructure, and it is a pity that the budget in 2015 had $2 billion in cuts this year and next when it comes to infrastructure. Two years on from the government being elected with a commitment that within one year there would be cranes in the sky of Melbourne, Sydney, Brisbane and other capital cities on new projects, in fact none of them have begun. Indeed, the government have been good at reopening projects or claiming projects that were initiated by the former government. What they have not been good at is initiating new projects and getting them going, which is why infrastructure investment has actually fallen under this government.

Kelly O'Dwyer (Higgins, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I thank those members who have contributed to this debate. This bill, the Asian Infrastructure Investment Bank Bill 2015, is necessary for Australia to become a founding member of the Asian Infrastructure Investment Bank.

In our region, Asia faces a major infrastructure financing gap, estimated to be worth US$8 trillion this decade. By becoming a founding member of the Asian Infrastructure Investment Bank we are taking a significant step to address this financial gap and to position Australia to take advantage of the opportunities to come from infrastructure development in Asia.

The Asian Infrastructure Investment Bank will provide trade and economic opportunities for Australian businesses and help our commodity exports, using its authorised capital base of US$100 billion to help address the infrastructure needs of the Asia-Pacific. With the bank to become operational from late 2015, Australian companies will be able to bid for AIIB-financed projects, with the AIIB's open procurement model. It will have an early focus on transport, energy and water infrastructure, and will later invest in ports, logistics, environmental protection, information and communications technology, and agriculture.

Australia's prosperity and economic growth are tied closely to Asia, with improved infrastructure throughout Asia also providing greater opportunities for Australian trade and businesses. With a growing pipeline of infrastructure projects, the Asian Infrastructure Investment Bank will likely see an increased demand for Australian commodities and services, such as engineering, construction management, finance and consultancy.

Improved infrastructure, such as new ports and railways in AIIB member countries like India and Indonesia, also means that Australia's exports can reach new or expanding markets. Greater levels of infrastructure means Australian businesses can capitalise on new and expanded commercial opportunities by meeting increased demand arising from stronger economic growth driven by new infrastructure. For example, building port facilities in India could provide extra capacity for Australian commodity exporters; constructing a railway in Indonesia will help to transport Australian agricultural products to market; and Australian consultants and fund managers could be designing and co-financing a toll road project in Laos.

More broadly, the Asian Infrastructure Investment Bank presents an opportunity to further strengthen Australia's engagement with the region, including with our biggest trading partner, China, and deepen our relationship with other member countries including New Zealand, Singapore, the United Kingdom and Vietnam.

Australia will contribute US$738.3 million, around A$932 million, paid-in capital to the bank over five years. Importantly, this will make Australia the sixth largest shareholder of the bank, putting us in a prime position to influence the bank's decisions and strategic direction. We will work with China and other bank members to establish a bank that is effective, accountable and transparent and that complements the work of the World Bank and the Asian Development Bank.

The Asian Infrastructure Investment Bank will boost economic growth, create jobs and promote trade in our region by financing much-needed infrastructure, and it is important that Australia involve itself so that we too can take advantage of the opportunities that it presents.

I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Administrator recommending appropriation announced.