Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

So, let me get this right: the investment mandate is going to be set by the shareholders, which includes a whole range of different considerations, including the governments of this fund. And the key shareholders are the big banks—the four big banks, and Macquarie Bank and HSBC. So, here we have a situation where we're being asked to provide $100 million of public funding with virtually no information about the investment mandate. We've been told to trust this government with their economic management—that they know what they're doing—without even the most basic information about what a small to medium enterprise is or how many SMEs are actually even needing this finance and how many have tried and failed. We're being asked to just trust the government.

None of this information is provided to this nation's premier house of review, the Australian Senate—this chamber where we stand today. We're doing our job in here, Senators. We're scrutinising this government's legislation. Senator Patrick's asked a very simple question: what do you define as a small or medium enterprise? And that's led, through a chain of questioning, to a disclosure by this minister that the shareholders in this fund—this very influential private equity fund that is essentially the big four banks—are going to set the details. The details are going to be set by the shareholders. We know some of those banks were reluctant in the first place to even be part of this election policy by the government. We know that they were reluctant, and we find today that they haven't even discussed how it's going to work.

What is that investment mandate going to be? Like you, Minister Hume, there are people in here who do have a basic understanding of finance and economics, and we should have this information. You want us to vote for this and yet you can't provide that basic information. How could we, in good conscience, support this? I think what we need to do is actually have a decent inquiry into this—that is, not a one-hour inquiry on a Friday afternoon with three pre-selected witnesses. We actually need to have a proper inquiry into how we're going to spend $100 million and what impact it is going to have. Is it fair and equitable? I would argue that it isn't, and I have very strongly laid out the case for that in our second reading speech.

I want to deal with something that Senator Hanson raised in relation to the question: would only Australian or majority Australian owned companies have access to this finance? I think it's something that Australians would be very interested to know about. Why are they putting their public funds into a fund that's going to be shareholding with the big banks and that could, for example, be accessed by foreign companies. They could be foreign companies with subsidiaries in Australia or others. I raise the issue with the minister that the plethora of trade deals that we've signed specifically have chapters in them relating to finance and all those chapters and all investments—whether it's a trades and services agreement; or whether it's a Trans Pacific Partnership agreement and what that morphed into in the end; or whether it's bilateral trade agreements—have very clear stipulations that a government, party to those deals, cannot be discriminatory in their policies. Even if we, as a chamber in the Australian parliament, may feel it's in the public interest, we're precluded from legislating in the public interest if it breaches those trade deals. That's why I have spent so much time in this chamber arguing against these shady trade deals that are signed by the executive before they even come to parliament. Parliament has had no input into the construction of these trade deals. If we're lucky we might get a briefing. I have sat on the JSCOT committee, which essentially gets to rubberstamp these trade deals, and I have argued, as have other people in this chamber, that what they have done is essentially tied a hand behind our back in terms of how we regulate for this country. This is a classic example of it.

If we wanted to set up a fund that was only available to Australian majority owned businesses, we can't, because London to a brick it would attract one of two things. It would attract a state-to-state dispute, in other words where a foreign country or a foreign government sues our government through an international arbitration court. Or, if a company felt that they were discriminated against—like in Senator Hanson's question if a foreign SME wanted to access this pool of capital and were told they couldn't because they weren't a majority Australian owned company—they would have rights under these trade deals to immediately lodge an investor-state dispute settlement clause, an ISDS clause, under investor-state dispute settlement arbitration. And we all know about ISDS. Hopefully we've all heard about ISDS—talk about shady tribunals: we don't know who appoints the lawyers, there's no avenue of appeal and we know corporations have gamed the system by using these ISDS arbitration disputes to, in effect, force regulatory chilling—that is, to make sure legislation or regulations are put up in their interests and not in the public interest. This is a classic example of that.

Minister, I would ask that you go away and get some advice. I suspect Senator Hanson's not going to support your bill today unless you can actually, in black and white, say that these are going to be available to only majority Australian owned companies and if that that is actually legal under our trade system. I would ask that you seek some advice, if you don't already know that, and provide it to the Senate.

I want to put this in perspective: this is $100 million of public money that we are being asked to put into a fund, and we just don't know how it works. We could do a lot with $100 million in this country. There's been a perfectly sensible suggestion here today from Senator Patrick that provides for an underwriting fund for small and medium enterprises—for those that really do struggle to access capital, for those who, for whatever reason, are not able to get capital through their banks, through initial public offerings or through private equity, which are the three main sources of capital. There may be good reasons for that and no doubt those applications and risks are assessed on their merits. But if we are putting up public money and we're not expecting a high return, because we want to facilitate business investment, we want to see those SMEs that are struggling—not the ones that this government plans to cherrypick through this fund, the 30 per cent that probably would have gone somewhere else to get their funding without any problems. It makes sense that if they're a good investment proposition they're not going to have any problem going through an IPO process, an initial public offering process. They're not going to have any problem finding private equity investors and they may even be able to get debt, traditional debt, through a bank.

But what we're doing here is crowding out those other sources of funding that already exist, without even the slimmest, or even a glimpse, of an explanation as to why there's some kind of market failure right now. The minister has openly said, and admitted, that the Reserve Bank didn't recommend this way forward. So, why are we passing it? Why are we allowing ourselves to be rushed? Why is the Labor Party rubber-stamping this? Why is the Labor Party giving the Liberal Party and the National Party a win to give more money to the banks and more power to the banks? That's another question that we haven't explored yet, but it absolutely needs to be explored.

We have a chance to actually get this right, to scrutinise it properly, and to consider what I think is a very good amendment to this that actually would provide equity or some kind of financing in place on a market failure. So, Minister, could you please provide to Senator Hanson the advice in relation to whether providing finance for majority Australian-owned businesses would be in contravention of our trade deal obligations, specifically in relation to investor-state disputes and state to state disputes.