Scott Ryan (Victoria, Liberal Party, Special Minister of State) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

Today, I introduce a Bill to amend the International Monetary Agreements Act 1947 to bring into force in Australia a renewal of the bilateral Loan Agreement between Australia and the International Monetary Fund signed in October 2012.

The amendments to the International Monetary Agreements Act will ensure that the standing appropriation that allows the Government to make payments to the IMF under the current bilateral loan agreement, continue for the renewed bilateral loan agreement.

The renewal of Australia's bilateral loan agreement forms part of a broader global effort to maintain the current level of IMF resourcing, to ensure that it has sufficient financial resources available to effectively fulfil its global role in economic crisis prevention and resolution.

As a successful open trading economy, Australia's prosperity relies on strong and stable growth in the world economy.

Importantly, ensuring that the IMF has sufficient lending resources in place provides confidence to markets and other economic actors that the IMF has the resources it needs to continue to play its role effectively, which is an important factor that underpins ongoing confidence to trade and invest.

Further, the experience of the global financial crisis indicates that it is important that the IMF has financial resources in place before they are needed, rather than hurriedly having to seek new funding commitments in the midst of the crisis response.

The bilateral loan agreement, signed by Australia in 2012, provides a line of credit to the IMF of around $8 billion in Australian dollars. It is one of 35 agreements the IMF signed with member countries and institutions between 2012 and 2016 to provide a third component to the IMF's lending resources, after quota resources and resources available to the IMF through the New Arrangements to Borrow. To date, these agreements have not been called upon.

On 19 December 2016, Australia signed a new agreement with the IMF to extend Australia's $8 billion funding commitment to 31 December 2019, with the possibility of a one-year extension to 31 December 2020 with Australia's consent. This agreement remains subject to the completion of domestic processes.

The IMF is seeking to renew all 35 agreements with member countries or institutions and undertake new agreements where possible. The broad terms and conditions of these agreements remain largely unchanged, with the addition of a new multilateral voting requirement for the activation of the agreements. This amendment will improve the governance and oversight of these agreements by participating countries.

Full details of the measure are contained in the Explanatory Memorandum.

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the International Monetary Agreements Amendment Bill 2017. This bill gives force of law in Australia to the loan agreement between Australia and the International Monetary Fund signed in Canberra on 19 December 2016 and in Washington, DC on 4 January 2017. In 2012, the Deputy Prime Minister and the Treasurer signed the 2012 loan agreement between Australia and the IMF. The agreement was for Australia to provide a contingent bilateral loan to the IMF as part of a broad global effort to increase the resources available to the IMF for crisis prevention and resolution. The 2012 loan agreement expires on 17 July 2017, so the 2016 loan agreement is to continue Australia's commitment to increasing the IMF's available resources for those purposes.

The 2012 loan agreement provided a line of credit to the IMF of around A$8 billion. It was one of 35 agreements the IMF signed with member countries and institutions to provide a third component to the IMF's lending resources after quota resources and the resources available to the IMF through the new arrangements to borrow. The IMF is seeking to renew all 35 agreements with member countries or institutions and to undertake new agreements where possible. Labor supports bringing into force Australia's renewal of the loan agreement and this bill.

Scott Ryan (Victoria, Liberal Party, Special Minister of State) Share this | Link to this | Hansard source

I commend the bill to the Senate.

Question agreed to.

Bill read a second time.