Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

I rise to speak on behalf of the coalition in response to the proposed International Monetary Agreements Amendment (Financial Assistance) Bill 2009. This bill is not controversial and I am not going to delay the Senate very long with my comments. The bill proposes to amend the International Monetary Agreements Act 1947 so that the process for Australian acceptance of amendments to the articles of agreement of the International Monetary Fund and the International Bank for Reconstruction and Development is simplified.

At present, when an amendment to the articles of agreement is agreed to by the IMF or the International Bank for Reconstruction and Development, an amendment of the International Monetary Agreements Act is required to change the schedules to reflect the new articles of agreement. This bill proposes to alter the definition of ‘articles of agreement’ in the International Monetary Agreements Act to include any amendments that enter into force for Australia without the need for further legislation to amend the act. It will not have any financial impact. It does make commonsense to do this because it will allow governance changes approved by the IMF and the IBRD to be accepted by Australia without an amendment bill passing through parliament. An example of the benefit of this action is the speedy approval of the new funding model for the IMF. The current financial crisis has served to highlight the need to be able to respond quickly to changes introduced by these global bodies. Expediting Australia’s formal acceptance of amendments to the IMF and IBRD agreements will ensure that we continue to work together with these bodies in a seamless manner.

While I am aware that there are some concerns that this bill will undermine parliamentary democracy and scrutiny in the chamber and indeed national sovereignty by allowing legislative changes to occur without reference to parliament, we must also acknowledge that there are already similar provisions in place which allow updates to international treaties to which Australia is a party. In addition, as the IMF and IBRD agreements are international treaties, amendments to the agreements will still be tabled in parliament and considered by the Joint Standing Committee on Treaties. So there will be an opportunity to voice concerns that may be wished to be raised. Also, if there are any funding requirements arising from amendments to the IMF or IBRD agreements, they will still be dealt with through an appropriations bill, ensuring that nothing will, in that sense, slip through the cracks.

We in the coalition do support the role that the IMF and the IBRD play in assisting and supporting global financial stability, particularly in times such as these which we now encounter. We also acknowledge the need for swift reaction to enable the full potential of the power of these important international bodies to be realised. I had thought that this was in the non-controversial business list of the Senate, but it does not really matter where it is dealt with. The coalition will be supporting the bill as drafted and, in those circumstances, I commend it to the Senate.

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I would like to thank Senator Coonan for her contribution in the debate on the government’s International Monetary Agreements Amendment (Financial Assistance) Bill 2009. The purpose of this bill is to extend provisions currently contained in the International Monetary Agreements Act 1947—the IMA Act—that enabled the Treasurer to lend money or enter into a currency swap with a country in support of an international monetary fund, IMF, program. The amendments are based closely on the IMA Act provisions and will extend the current arrangements to include support for World Bank and Asian Development Bank, ADB, programs.

On 10 December 2008, the Prime Minister announced that Australia will enter into a stand-by loan agreement with Indonesia, should it be required. This loan arrangement will form part of a World Bank-led arrangement and will include contributions from the ADB and government of Japan. The amendments will enable Australia to provide the stand-by loan to Indonesia, if it is needed, as well as to enter into a loan or currency swap with other countries to support World Bank or ADB programs in the future, should the need arise.

The loan is a stand-by facility. There is no certainty that Indonesia will need to draw down on the loan. If activated, the loan will be paid back in full and an appropriate interest rate will be charged on the loan. It is in Australia’s national interest to support stability and economic recovery, particularly in our region—an issue on which there is bipartisan support. It is particularly important in the current circumstances of the world financial and economic crisis. During the debate on the bill in the House of Representatives the shadow Treasurer indicated that the coalition support this legislation, and they undertook similar activities in the past during the Asian financial crisis. I also note—and Senator Coonan has referred to this—the tabling requirements and the necessity for appropriation bills. Consistent with the 1998 IMA amendment bill, this bill will allow Australia to continue to play its part in international cooperation efforts, particularly during this time of international financial and economic crisis—the worst crisis we have seen in some 75 years.

In concluding, I do have some direct knowledge of the Asian Development Bank, its administration and its programs, because I have been the Australian ministerial representative to the ADB for the last two years. Both the World Bank and the Asian Development Bank are very strong, reputable organisations with good governance and very effective programs. I have no doubt that if the stand-by loan arrangements with Indonesia are activated, both these organisations—and I have first-hand knowledge of the ADB—are well placed to deliver effective assistance in this time of international financial and economic crisis. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.