Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Hansard source

I rise today to speak in support of the Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Bill. This bill seeks to broaden the range of transactions Export Finance Australia can finance by enabling EFA to make equity investments.

As an open trading nation, Australia has been a beneficiary of the multilateral rules-based trading system that has operated for decades. Australian businesses and Australian jobs have benefited from these rules supporting export growth. On average, Australian businesses that export hire 23 per cent more staff and pay 11 per cent higher wages than do nonexporters. People might refer to or recall my many contributions in support of various trading arrangements which refer to the impact on employment and wages to the benefit of working Australians.

The current lack of an equity investment power restricts Export Finance Australia to a narrow range of transactions. An equity investment power will complement EFA's existing suite of financing powers, which comprise loans, guarantees, bonds and insurance, and it will align EFA with export credit agencies in other countries, including the US, China, Japan, Canada and South Korea, and with other Australian government financing agencies like the Northern Australia Infrastructure Facility and the Clean Energy Finance Corporation. The increased financing power will be used to support important infrastructure investments in the Indo-Pacific or export-linked projects in Australia.

The bill will also give legislative effect to the decision to provide Export Finance with the ability to offer guarantees for overseas infrastructure transactions without needing to provide a loan to the same transaction. This will obviously improve flexibility and efficiency. Both the EFA and the Australian Infrastructure Financing Facility for the Pacific, AIFFP, oversee infrastructure financing activities, particularly in the Pacific, where transactions may be most appropriately financed in local currency. Export Finance providing a guarantee for another lender's loan in local currency is an effective way of facilitating local-currency borrowing. This will enable the injection of finance directly into emerging economies in our region. This equity investment power will also be available to the AIFFP, which relies on Export Finance Australia's governing legislation for the delivery of its loans.

We note that the bill has appropriate safeguards which constrain governments' spending. Any equity investment will be on Export Finance's national interest account, which requires government approval. There is obviously another account, the commercial account, which will remain unable to be utilised for equity investments. There is no legislated limit or cap on equity stakes, but every transaction would require ministerial approval.

I want to address some of the government's claims in relation to the Pacific and the Indo-Pacific. The government claims that this bill will support Australia's economic engagement in the Pacific and in the Indo-Pacific. In 2019, Export Finance Australia was granted wide powers to support financing infrastructure in the Pacific in line with the so-called Pacific step-up. Since then, we have had many flashy announcements from this government about investing in the Pacific, but Mr Morrison's failure of diplomacy has turned his so-called Pacific step-up into a series of Pacific stuff-ups. The Prime Minister announced the $2 billion Australian Infrastructure Financing Facility for the Pacific back in 2018. Two-and-a-half years later, it has provided less than $90 million of the promised $2 billion in Pacific infrastructure financing, and Mr Morrison's failure to take serious action on climate change, including the government's continued and very public failure to commit to legislating net zero emissions by 2050, continues to undermine its own Pacific step-up and damage Australian interests.

Australia should be a renewable energy superpower and we should be helping our neighbours address climate change and secure their energy supplies through our own renewable energy expertise. This is the unique role that EFA is equipped to play for our region, but it's a role that will be filled by others because the Morrison-Joyce government is dithering on climate change policy. Instead of making announcements, Mr Morrison needs to do the legwork and ensure Australia is a real partner of choice in the region. Let us also not forget that Mr Morrison's plan for an agricultural visa will directly undermine our Pacific labour mobility programs, including the Seasonal Worker Program and the Pacific Labour Scheme. I note that Senator Payne is in the chamber and I would say to her that this is another example where Mr Morrison is selling out our Pacific family to satisfy National Party colleagues, and it is a matter of great regret that this foreign minister, unlike Ms Bishop before her, has gone along with it. All at the same time, this government has failed to diversify what we as a country export and where we export.

Despite the talk about a Pacific step-up and despite the talk of engagement in our region, under this government we are in fact more dependent than ever on China for our exports and our jobs—more so than any other country in the world. At the same time, our economic and trade relationships with some other of our most important neighbours, including India and Indonesia, have gone backwards. Australia wants a region that is stable, prosperous and respectful of sovereignty, a region that is resilient to threats such as the pandemic, and other pandemics, and climate change. All of this requires deeper partnerships in the region, comprehensive support for pandemic recoveries and a genuine plan to boost Australia's trade and investment, especially as some of our neighbours now face a lost decade of development gains.

In conclusion, Labor will support this bill, because we need to invest in all of the levers of our national ability to boost our engagement to support and build the region we want. Central to achieving our objectives is ensuring that Australian businesses and investors can contribute to and benefit from our region's recovery and future growth. But the Morrison-Joyce government needs to do much more. It needs to boost Australia's support for the region's pandemic recovery, it needs to have a real plan for trade diversification and it needs to fully and properly commit to net zero emissions by 2050 and work with our partners to address the existential challenge of climate change. As long as the Morrison-Joyce government insists on being part of the problem rather than part of the solution, Australia will simply fall short of being a credible partner of choice in the Indo-Pacific region.