Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Innovation, Industry, Science and Research) Share this | Hansard source

Perhaps I will make a short contribution on this matter. Labor will support the Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019, which will increase the scope for Efic to fund infrastructure projects in the Pacific island nations. We are aware that some aid organisations and activist groups have raised concerns about the kinds of projects that might be supported. But we believe that the best way of ensuring that the appropriate projects and safeguards are put in place is to heed the recommendations of Labor senators in their additional comments to the report of the Senate inquiry into this bill.

My Labor colleagues recommended that, some 18 months after the bill's assent, there be a statutory review of the changes that it implements. We are pleased that the government has now agreed that a statutory review should take place within 18 to 24 months of the bill's assent. The minister has given a written undertaking to that effect to the shadow minister for trade and to the shadow foreign minister. As Senator Wong indicated in a speech recently, a Labor government would work with the aid and development sector to devise a model that is fit for purpose. While that work took place, we would continue to use the mechanisms put in place under this government. Beyond funding, Labor's support for the new infrastructure would also offer capacity building, job opportunities and training, support for governance and project management, and technical assistance to help achieve appropriate design and financial arrangements, including for projects that would assist with climate resilience.

As Australia, like the Pacific, is in a natural-disaster-prone region, we have the ability to support climate-resilient infrastructure and systems. While much of the infrastructure finance will be focused on the Pacific, under a Shorten Labor government there will be opportunities to finance and assist with infrastructure in South-East Asia too. I remind senators that it is a serious mistake to think that the Pacific nations are a series of far-flung, tiny states with no strategic importance. The Pacific is far too important a region for Australia to simply reject this bill, as the Greens senators have urged in their response to the Senate inquiry.

In a speech to the Lowy Institute in October last year, the Leader of the Opposition, Mr Shorten, recognised the special role that Australia must play in the Pacific. He called for the creation of a government backed infrastructure investment bank. The purpose of the bank would be to provide concessional loans for vital nation-building projects. By providing the necessary finance, Australia can enhance both the prosperity and the security of the region.

Our Pacific neighbours are looking for partners to help them. It is in our national interest to become their partner of choice. There are some people in this chamber who don't accept humanitarian justifications for any sort of aid or assistance. They don't accept that Australia's status as a wealthy developed nation gives us obligations to help nations, particularly those among our neighbours who are less developed. But even those people who don't accept that it's a matter of justice to help our neighbours should understand that it is in our national interest to do so. If we don't become a partner for development, other nations will do so. Under some other influences, Pacific nations might not remain as well disposed to Australia as they have hitherto been. As Mr Shorten pointed out, it's Labor's resolve that our neighbours should look to Australia first and have good cause to do so.

In November the Prime Minister made a statement similar in intent to that of Mr Shorten. He announced the $2 billion Australian Infrastructure Financing Facility for the Pacific and an extra $1 billion for Efic to finance infrastructure investments in the Pacific region. That has led to the present bill, which gives Efic an extra $1 billion in callable capital on its commercial account to fund infrastructure investments in the Pacific. The funding can be provided to individuals or to companies at a commercial rate. At present Efic can fund projects from its commercial account only if it helps to maximise Australian export opportunities, with defined Australian content and Australian job creation thresholds.

This bill eases those restrictions by introducing an Australian benefits test for Efic's loans. Under these tests an infrastructure project funded by Efic must have a benefit for Australia or a person conducting business or other activities in Australia. To cite an example used by the minister, the bill will allow Efic to fund an internet broadband project in the Pacific if it lowers the cost of doing business in the region for Australians. It would also enable projects to use local content and labour benefitting both parties to the loan. A minor but still significant change in this bill is a new name for Efic. It will be able to conduct its operations by trading as the Export Finance Corporation of Australia. It is a simpler name that may provide more-widespread recognition for Efic and for Australia as a development partner. Labor will work to make that happen.