David Fawcett (SA, Liberal Party, Assistant Minister for Defence) 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—

I am pleased to introduce this bill to amend the Export Finance and Insurance Corporation Act 1991.

The amendments give Australia's export credit agency, Efic, a new overseas infrastructure financing power, and an extra $1 billion in callable capital. These initiatives will support infrastructure projects in the region that have a benefit for Australia or Australians, as well as enable Efic to write larger loans including within its current export mandate.

The amendments will enhance Efic's ability to support Australian businesses and to drive stronger commercial links between Australia and our region, by enabling Efic to support more and larger overseas infrastructure projects.

Our engagement with the region and the Pacific is vitally important.

This legislation forms part of the Liberal-National Government's package of measures to broaden and deepen our engagement in the Pacific and the region. Australia has a long history of cooperation with our Pacific neighbours. We want to work with our Pacific island partners to build a Pacific region that is secure strategically, stable economically and sovereign politically.

This bill enhances our regional commitment especially to infrastructure. It delivers on the major new initiatives announced by the Prime Minister to address the infrastructure needs of the Pacific region by boosting Efic's ability to support Australian commercial participation in Pacific infrastructure as well as the timely implementation of the Australian Infrastructure Financing Facility for the Pacific. These measures form part of the Liberal-National Government's significant new package of security, economic, diplomatic and people to people initiatives that will build on our strong partnerships in the Pacific.

As the Liberal-National Government's 2017 Foreign Policy White Paper outlined, the stability and progress of the Pacific region are of fundamental importance to Australia. No single country can tackle the challenges on its own. The bill will allow Efic to finance essential overseas infrastructure such as telecommunications, energy, transport and water where it is commercially viable. This will complement the Liberal-National Government's new Australian Infrastructure Financing Facility for the Pacific, which will stretch our aid dollars even further.

Better infrastructure in the Pacific will contribute to stronger growth across the region including in Australia. Productive and sustainable infrastructure is mutually beneficial.

The demand for infrastructure financing in our region is large.

The Asian Development Bank estimates the Pacific region needs US$3.1 billion in infrastructure investment per year to 2030. It estimates Southeast Asia needs a further US$210 billion in infrastructure investment per year by 2030.

Efic can play an important role to help meet these needs.

When projects have strong commercial prospects, they should be funded commercially. Efic has a track record of supporting infrastructure projects on its commercial account, like the US$19 billion PNG LNG project that is the largest ever private sector investment in PNG and will bring significant economic benefit to PNG and provincial governments via tax and royalties, local landholders and local businesses.

The bill grants Efic a new power to finance overseas infrastructure projects based on a broad Australian benefit test, enabling it to finance overseas infrastructure projects that result in positive outcomes for Australia, both now and in the future. This will enable Efic to take account of previously unrecognised benefits that will flow to Australia or Australians over time as a result of Efic financing, such as greater Australian participation in supply chains, access to new markets for Australian businesses, more Australian jobs, payments, dividends or other financial proceeds from overseas to Australia, or stronger relationships with our regional partners, especially in the Pacific.

Using an Australian benefit test, Efic could finance a wide range of infrastructure projects in the region. For example, in the telecommunications sector, Efic's new power would enable it to finance projects that improve regional connectivity through greater broadband internet access. This benefits Australians by reducing the cost of doing business and increasing our exports to the region, encouraging economic integration, and e-commerce opportunities. In the energy sector, Efic's new power would enable it to finance the construction of LNG receiving terminals, leading to increased energy exports or engineering services.

The bill increases Efic ' s callable capital by $1 billion on its commercial account.

A larger capital base will allow Efic to provide more commercially meaningful financing offers, given the total size of debt financing required for regional infrastructure projects is large, and also to support Australian exporters more broadly.

It will give Efic the commercial flexibility and credibility it requires to offer finance to project proponents, sovereign borrowers and financing partners, who require the confidence that Efic's support is meaningful and can be sustained over often long repayment terms. It will enable Efic to finance more infrastructure projects in PNG, one of our most important neighbours. Efic is already approaching its country lending limit for PNG and just one more infrastructure project could see it once again reach this limit, constraining Efic's ability to take up future financings and the jobs and opportunities that will flow to both Australia and PNG from this.

The increase in callable capital is a commitment from the Liberal-National Government to create opportunities for Australia and Australian businesses through Efic. The increase in callable capital will bring Efic's total capital base to nearly $1.7 billion, around a 150% increase, comprising $1.2 billion in callable capital and almost $475 million in cash capital. The increase will enable Efic to provide more financing over time within an unchanged, regulated upper limit for the contingent liability of $6.5 billion.

Increasing Efic's callable capital by legislative amendment, rather than legislative instrument, will provide the higher degree of certainty infrastructure project proponents, borrowers and commercial financing partners require when they look to Efic to assist with financing gaps.

The bill will enable Efic to help address the infrastructure needs of the Pacific region.

It will complement the new Australian Infrastructure Financing Facility for the Pacific (AIFFP). Efic will have the lead where there are stronger commercial prospects as Efic's financing will be on a commercial basis. The AIFFP will boost Australia's support for infrastructure development in the region by combining loans with grants on a case by case basis. The bill will also enable Efic to assist with the timely implementation of the Australian Infrastructure Financing Facility for the Pacific by administering AIFFP loans.

The Government will detail how Efic's new power will support the AIFFP and be applied in our region including the Pacific under a new Statement of Expectations.

The Government remains committed to ensuring Efic delivers for Australian exporters, retaining a focus on support for SMEs.

Efic will continue to be required to maximise Australian participation in overseas infrastructure projects. Efic will continue to be required to ensure Australian companies, especially SMEs, have every opportunity to expand into overseas markets.

This bill does not change Efic's existing Australian content requirements, or Efic's focus on SMEs.

The bill enhances Efic's existing function to facilitate and encourage exports. It enables Efic to take account of not only the immediate export opportunities from the involvement of Australian companies, including SMEs, in overseas infrastructure projects, but future streams of export opportunities and future jobs for Australians arising from the opening of new and emerging markets for Australian business. Creating new export oriented jobs is important for Australia's economy. One in five Australian jobs is trade-related, and, in the last five years, trade contributed around a quarter of Australia's economic growth.

The Liberal-National Government's trade agenda, which has included delivering comprehensive free trade agreements with Australia's three largest export markets China, Japan and Korea, has supported Australia's strong economic growth which is faster than any of the G7 nations.

In 2018, the Liberal-National Government delivered the TPP-11, one of the most comprehensive trade deals ever concluded, covering 11 countries with a combined GDP of more than $13.8 trillion and close to 500 million consumers. The TPP-11 benefits Australian farmers, manufacturers, service providers and small businesses.

The Liberal-National Government is backing small business via free trade agreements, via tax relief for around 3.3 million businesses who employ around 7 million Australians, and via this bill.

An enhanced role for Efic in infrastructure will boost its ability to support Australian businesses, including SMEs, which have the specialised skills and knowledge base that underpin major infrastructure projects, increasing Australian participation. For example, Efic's support for the PNG LNG project was crucial to encouraging private sector finance and led to over $1 billion in contracts being awarded to Australian businesses, including SMEs, as well as providing local jobs and valuable export earnings for PNG.

The bill will allow Efic to conduct operations under the name Export Finance Australia.

A new simpler name that references Australia will provide greater recognition for Efic and the Australian Government, both with Australian SMEs and other exporters, and in important overseas markets.

The bill maintains Efic ' s risk controls and commercially appropriate risk appetite.

Efic will continue to conduct rigorous due diligence for infrastructure projects in the same manner as other transactions under the Efic Act. This includes robust environmental and social risk assessments.

Efic has a strong record of prudent lending and sound commercial judgement evidenced by a historical write-off rate on its commercial account of less than one per cent. Efic's historical write-off rate is lower than the average for commercial banks across the economic cycle. In each of the last 20 years it has delivered a profit on its commercial account. In 2017-18 alone Efic supported 160 Australian businesses with $194 million of facilities, enabling $1.39 billion of export contracts which contributed $1.15 billion of Australia's GDP and supported 7,600 jobs in Australia.

The bill maintains existing legislative safeguard requiring a net increase in Australian jobs within a business applying for Efic financing for overseas direct investment. It will not provide advantages to overseas competitors, or deprive Australian companies who produce in Australia of financial assistance.

The bill will enhance Australia ' s role and attractiveness as a partner in regional infrastructure development.

It will boost sustainable economic growth and support stronger commercial links between Australian businesses and our region.

Together with the Australian Infrastructure Financing Facility for the Pacific, the bill will help address the infrastructure needs of the Pacific region.

I commend the bill to the Chamber.

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

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I rise today to speak on the Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019. Let me say right from the outset that the Australian Greens oppose this bill. We think it is the wrong way to go about supporting our Pacific neighbours, and we're extremely concerned that under this amendment Australian taxpayers' money may indeed be going to worsen climate change with the expansion of fossil fuels in our region. And it's not good enough for the government to spend taxpayers' money on their own domestic coal pet projects. They now want to spend taxpayers' money on these projects in our region as well.

We are extremely concerned that this is not the right way to support our Pacific neighbours and play our role in the region. We hold deep concerns about the role of Efic in using taxpayers' dollars to fund fossil fuels in the era of climate breakdown and climate change. This is the moment when we need to start grappling with the real impacts of climate change and the destruction of our climate from the burning of fossil fuels. The IPCC report tells us that we have only a decade if we are to arrest the dangerous elements of global warming, and we are not going to be able to do that while we have political leaders talking about climate action and, on the other hand, taxpayers' money rolling out the door to fund more fossil fuel projects.

The passage of this bill has been rushed. We've experienced that already this afternoon. It was read a first time and then—bang—went straight to the second reading. Of course, this is all being done on the cusp of the federal election. We don't know when the Prime Minister is going to call the election. It could be Thursday. It could be Friday. It could be Saturday. It could be Sunday. It could be sometime next week. What we do know is that this government is obsessed with spending taxpayers' money, funding coal, gas and oil. We know that. That's all it seems to be able to come up with every time there is a debate around this matter: 'Just spend more taxpayers' money on it.'

It is absolutely shocking to me that in order to facilitate this bill being rushed through the parliament we have the Australian Labor Party lining up to tick and flick this bill through. It's not the way we should be engaging with our regional neighbours and it is not what we should be doing if we are serious about climate change. The Labor Party, of course, announced their climate policy only yesterday—only yesterday! Now, today, they're lining up to tick off on more taxpayers' funds and open the door to prop up coal and gas projects in the Asia-Pacific. Not so serious about climate change now, are we, less than 24 hours later.

This bill hasn't been allowed to have proper consultation. We know that the Prime Minister first announced the policy in November 2018, and it passed through the House of Representatives in February this year before coming to the Senate today. The speed at which this bill is being propelled leaves little time to consider some of the real concerns over its appropriateness.

As Stephen Howes points out in his submission on behalf of the Development Policy Centre at the Australian National University:

2. There is a risk that that the Efic reforms will undermine governance in the Pacific by encouraging a supply-side, project-proponent-led, non-competitive approach to infrastructure. This is widely perceived to be a problem with Chinese export credit to the Pacific.

3. Efic projects, even if commercially viable, may be against the national interest of the recipient country in a poor policy environment. But Efic lacks both the capacity to make policy assessments and the mandate to promote policy dialogue and reform.

4. Efic will be mandated to pursue infrastructure projects that are in Australia's interests, and to maximise Australian participation. In other words, it is required to put Australia first—

That means, ultimately, that our Pacific neighbours will lose out—

which is bad for the Pacific, and inconsistent with our official position of backing openness and competition.

The risks should be thoroughly explored before this bill passes the Senate. They should have been thoroughly explored properly before this bill was even brought to the floor.

I want to go to a couple of specific concerns that we have. The Australian Greens believe that Australia should be stepping up its engagement with the Pacific and doing far more to support its Pacific neighbours. The best way of doing this is by boosting our aid budget from its lowest ever levels as a proportion of gross national income to put us on a trajectory of reaching 0.7 per cent of GNI by 2030. The Pacific region would reap the benefits of a decent Australian aid budget alongside an increase in Australia's contribution to climate finance and Australian government policies to wean Australia off dangerous fossil fuels.

Today is budget day. We've got a lock-up that's about to start. Do you think that this government is going to put any more money into the aid budget? I think not. Every year, year after year after year, this government—the coalition government, the Liberal Party—cuts our foreign aid budget. It thinks that's its own piggy bank. Rather than investing and doing what needs to be done to support our Pacific neighbours, the government is more interested in supporting the fossil fuel industry than doing anything that supports those neighbours in our region through what would be a more legitimate and more appropriate use of support—through our foreign aid budget. I won't hold my breath that there'll be any increase in our foreign aid budget this election. No, this government will be more interested in giving tax cuts to the rich. That's what will be in the budget tonight: more tax cuts for wealthy people and less aid money for our Pacific neighbours. But, if it comes to bankrolling coal, oil and gas projects, whoa, there'll be plenty of money to go around. That is what is fundamentally wrong with this bill before us today.

The Greens fully support the submissions made by a number of development sector stakeholders who overwhelmingly have expressed serious concerns regarding the substance of the bill as well as a lack of consultation and the scrutiny surrounding it. As Oxfam notes in its submission:

In line with the Boe Declaration, and with best practice globally in providing development loans as well as Australia's obligations under both the Paris Declaration and global human rights standards, any loan facility increasing Australian funding for infrastructure to developing countries must:

We know what's at the heart of this: it's the coal industry, it's the oil industry and it's the gas industry. Of course these standards should also operate with a high level of transparency and accountability. Again, what is this bill doing but just formalising more secrecy around the spending of Australia's taxpayers' money.

Other standards, of course, should apply best practice. We should have best practice standards, due diligence and safeguards, including in relation to gender, human rights, climate change, and community consultation and consent. The Oxfam submission continues, saying that standards must:

And, lastly, the submission continues, saying that any type of loan facility like this must:

That's not what this bill is being rushed through the parliament for. There's nothing in here about what's going to help our Pacific neighbours when it comes to agriculture or water infrastructure or dealing with the issues of climate change—no. This is Australian taxpayer money being rolled out the door to prop up the fossil fuel industry. The Oxfam submission continues:

At present, EFIC does not have the mandate, operational framework or expertise that would enable it to accommodate these core elements. The draft legislation does not include provisions that would change EFIC's governance, structures or processes to ensure that any of these core elements are taken into account in the future.

There is no surprise as to why this bill is being rushed through this place today. It is the Liberal Party and the coalition delivering for their fossil fuel mates. And, sadly, we now have the Labor Party lining up to do it with them less than 24 hours after the Labor Party announced their climate policy—how pathetic.

Furthermore, the Australian Council for International Development notes in its submission to the rushed Senate inquiry into this piece of legislation that:

There is insufficient evidence that Efic's standards of governance; capability; risk management; environmental and social safeguarding; and transparency and accountability can effectively deliver on its proposed expanded mandate constituted in this Bill and will be commensurate and aligned with the high development standards and principles employed in Australia's development cooperation program by the Department of Foreign Affairs and Trade.

Basically what the experts are saying is that Efic has no idea how they're going to do this and no idea how they're going to consult with the local communities properly. Indeed, they might be doing more harm—probably will be doing more harm—than good. That's before you even take into consideration the impact on climate change and global warming because of the high chance that this money is going to be spent on the fossil fuel industry.

Efic has a mandate to put Australia first—not the Pacific. The Australian Greens are deeply concerned that this bill will allow Efic to compromise the needs of our Pacific neighbours. It will mean that the needs of our Pacific neighbours will not even really be considered—they'll come off second best. I don't want to hear, after I sit down and we hear from the minister, the minister stand up and say how great this is and that it makes Australia so wonderful that we're doing all this for our Pacific neighbours. If you actually cared two hoots about how we engage in our region you would have an increase in the aid budget in tonight's budget papers, but it won't be there because this government doesn't actually care about how we engage with the people of the Pacific. They just care about what's going on with the corporations, with the mining industry and with the fossil fuel lobby.

We need Efic to strengthen its own accountability practices before it contemplates expanding its powers. It is notoriously secret, it has a lack of transparency and it just doesn't have the expertise to understand the needs on the ground in these local communities. It must get its own house in order. Efic has repeatedly demonstrated a failure to conduct due diligence, evidenced by human rights and environmental violations in Efic-sponsored projects overseas. Our Pacific neighbours should not be paying the price because this government wants to sign another cheque for their fossil fuel mates.

One of the most damning examples of Efic's poor decision-making is its decision to support the ExxonMobil-led PNG LNG project in 2009. It was the largest single loan Efic has given. Much of this transaction was done on its own national interest account and was thus undertaken with the cooperation of DFAT. Nevertheless, it could not have happened without passing Efic's due diligence standards, which clearly have been found to be wanting. In 2009 and again in 2012, Jubilee Australia found two major shortcomings of the project. Firstly, from a macroeconomic point of view, the expected financial impacts on the PNG economy were likely to be mixed and poor governance in PNG would likely undermine any predicted widespread benefits for the ordinary people of PNG. Secondly, Jubilee warned that the unrealistic promises combined with inadequate landowner mapping and political pressures on the landowners to sign onto the project agreement would eventually lead to landowner discontent. So we're causing more problems than we're solving.

Jubilee Australia went further and said that this discontent caused low-level conflict in PNG. It was suggested that the PNG government might send in the military, which could lead to the escalation of bloody civil conflict in the area. Despite all of these warnings, this is precisely what then happened. Efic was grossly incompetent in addressing the social, economic and political risks. Now we have a bill before us in which they want to expand their ability to participate in this nonsense, dressed up as some type of help to our Pacific neighbours. Well, it's bollocks. This is about supporting the fossil fuel industry—nothing more and nothing less.

This example further highlights our deep concerns about the possibility that this funding will finance fossil fuels. This government has repeatedly shown they will attempt to use every cog in the machinery of government to spend taxpayers' money on coal, oil and gas. As the Australia Institute pointed out in their submission, the government has made it explicit that Efic could fund projects to promote Australian fossil fuel exports. The Assistant Minister for Trade, Tourism and Investment, Mr Coulton, said:

In the energy sector, Efic's new power would enable it to finance the construction of LNG receivable terminals, leading to increased energy exports or engineering services.

Oh. So that's what this is all about, then? Thanks, Minister. The Australia Institute in its submission says, 'While the minister's quote refers only to gas, this could equally apply to coal infrastructure.' And we know just how obsessed this government is with coal and spending taxpayers' money on coal. Just imagine the high-fives and the yippees that would be going on in the National Party room right now if this bill got through. We could have Mr Barnaby Joyce ringing up Gina Rinehart and saying, 'Look, more money for coal.' That's what this government is going to the election on. They have no plan to reduce carbon emissions and no plan to help our Pacific neighbours, but they want to rush this bill through today so that they can spend more of the money of hardworking Australians to prop up the fossil fuel industry. That's what's going on here and it's a disgrace that the Labor Party is standing by and letting them do it.

The Australian Greens attempted to move an amendment to this bill in the House on 20 February. This amendment would have prevented Efic from facilitating and funding the mining and export of thermal coal. You'd think at a time of climate action—with the desperate need for reducing carbon emissions and the phasing out of fossil fuels, like the IPCC has said—that this amendment would have passed without any problem—but, no. The Labor Party did not support this amendment. The Liberal Party, the coalition, did not support this amendment. And so now we have a bill before us today that is able to spend Australians' money on facilitating the export of climate change and fossil fuels overseas.

The Labor Party insist that they do not support taxpayer funding for the Adani coalmine, despite, of course, what some of their Queensland colleagues say. Well, here is an opportunity to prove it. I will be putting up these amendments again in this place to ensure that Australians' money cannot be spent on further expanding the coal industry. You're either with us or you're not. You can't stand up on Monday and say that you care about reducing carbon emissions and then come into this place less than 24 hours later and vote for a bill whereby taxpayers' money will be spent on making climate change worse in order to prop up and fund the coal industry. You can't do both.

Tim Storer (SA, Independent) Share this | Link to this | Hansard source

I rise to speak on the Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019. In an era where the Indo-Pacific is the centre of world power politics, it is more important than ever for Australia to step up its engagement in the region. Australia prides itself on being a regional player, working closely with our neighbours in aid, trade, security and investment. For this reason, any efforts by Australia to increase investment in our Indo-Pacific partners for the betterment of our region is welcome. I therefore applaud what this bill hopes to achieve.

Targeted and comprehensive investment in our region will only improve Australia's relationship with our neighbours. This is certainly in Australia's best interests. However, any efforts made to invest in our region must also be compliant with two simple principles. First, any investment must be not only in Australia's interests but also in the interests of the recipient country. It is antithetical for us to invest in our neighbours if such investments actually end up hurting our neighbours. Second, we must comply with our international obligations. Australia is a strong and steadfast proponent of rules based international order when on the world stage. We hurt our legitimacy and integrity if we advocate for one thing and then do another.

Unfortunately, the bill in its current form falls short of these two principles. For this reason, I propose two amendments which aim to rectify these shortcomings. First, the bill as it currently stands only requires that investments are in Australia's interests. This is insufficient. We must ensure our investments in the region are not only in our interests but in the long-term interests of our neighbours. We cannot expect this bill to help Australia build stronger regional relationships if we don't ensure that our investments actually assist our neighbours. For this reason, my proposed amendment would require a suitable legal, administrative and policy framework for any investment. It would also remove the requirement for maximum Australian benefits to be sought from any investment. This requirement hurts Australia's reputation in the region. Whilst the likelihood of Australian benefits should also be a consideration, maximising the benefit to Australia should not be the overarching consideration for investments.

Second, it is concerning that the Australian Senate wishes to pass a bill which allows us to undermine our legally binding commitments under the Paris Agreement when we invest in our overseas partners. Under article 2 of the Paris Agreement, Australia committed to:

Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

Any investments Efic makes under these new arrangements should be consistent with this commitment. The truth is that Australia is a wealthy nation that has the capacity to help its neighbours develop clean, suitable energy and infrastructure. To pass this bill without a requirement that we comply with our commitments under the Paris Agreement would undermine our commitment to the rules based international order. It would also be a missed opportunity to help our neighbours develop sustainable infrastructure. For this reason, my second amendment would require investments to be consistent with achieving the aims, objectives and obligations of the climate change conventions passed in Paris. It is a shame that such issues were not more deeply considered by the Senate Standing Committee on Foreign Affairs, Defence and Trade inquiry. The truth is that the committee rushed the process, notably not even holding public hearings. For a reform as significant as this bill, this is simply unacceptable.

Having worked in Vietnam for the World Bank and in other countries in our region and in other private sectors, I am completely committed to targeted, comprehensive and meaningful investment by Australia in the Asia-Pacific's development. But any such investment must always comply with our international obligations and must seek to not only benefit Australia but also benefit the recipient of any such investment. For this reason, I am pleased that Australia seeks to invest more widely in the region. However, I am disappointed that a structure we have chosen to use to facilitate such investment, as laid out in this bill, has clear shortcomings, which has the potential to lead to worse outcomes for our region and Australia's reputation at large.

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

I stand today to express the Greens' serious concerns about the Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019 and to say categorically that the Greens will be voting against this bill. I urge all other senators to also vote against this bill today. This bill will greatly expand the power of the Australian export credit agency and increase its access to callable capital from approximately $200 million to $1.2 billion. I want to state that this is public money. This is taxpayer money.

The government hasn't consulted the public, who own these funds, on this bill and is rushing this through parliament without any time for adequate consultation—coincidently, probably a couple of days before an election is called. I was concerned to see, as were many stakeholders around this country, that the recent report released by the Senate Economics Committee, of which I am part, ignored many of the important issues raised by civil society groups across this country. Efic has, unfortunately, had a long history of funding fossil fuel projects that have been found to be detrimental to women's rights, communities and low-income countries as a whole. Senator Hanson-Young has already given an example of how previous investments have disregarded the environmental impact in those countries. This is not a body that we should be trusting with an extra billion dollars of public funds.

One example alluded to already was Efic's investment in the PNG LNG project which Efic funded in 2014. Research by Jubilee Australia showed a range of negative impacts from this project for local communities, including an increase in violence and harm to the PNG economy overall. Of course, this doesn't include the climate impact of opening up new fossil fuel projects around the world, which, at this point in history, is nothing short of sheer madness. So, given Efic's history of lending to projects associated with significant threats to human rights and the environment in our region, the Greens do not feel that the work has been done and that the community has enough faith in this bill. Senator Hanson-Young pointed out that this will just be a trojan horse for exporting more climate change, coal and fossil fuels to overseas countries to the benefit of a few large companies.

I want to talk a little bit about another form of export that Efic has been involved in which concerns me almost as much as the pork-barrelling we might see around new fossil fuel projects that can't stand on their own two feet—that is, the export of weapons and arms we see facilitated through Efic. You may be aware that $3.8 billion was set aside by this government two years ago for what they called the Defence Export Facility, administered by Efic, the Export Finance and Insurance Corporation. I will read to you from Efic's website:

A $3.8 billion Defence Export Facility administered by Efic, Australia's export credit agency—

was set up—

This will help Australian companies get the finance they need to underpin the sales of their equipment overseas. It will provide confidence to Australian Defence industry to identify and pursue new export opportunities knowing Efic's support is available when there is a market gap for defence finance.

Why is there a market gap for defence finance? Why is there a clear market failure in the provision and export of defence industry technology, hardware and munitions to overseas countries? I've asked this question of Minister Payne several times during estimates. I've put questions on notice. There has been almost no detail around why this $3.8 billion was necessary.

Reverend Costello, the day this was announced, came out and said that this was blood money. Why are we setting up a taxpayer funded export facility to subsidise weapons manufacturers to sell weapons to countries overseas? 'Who are they selling them to?' you may ask. The government has set up a catalogue. If you're in the market for a new high-powered machine gun, perhaps, or a turret that might carry a machine gun on an armoured personnel carrier, or some drone technology, go onto the catalogue and have a look; it's all there.

The only export sale we've seen announced from this so far was to Saudi Arabia, a country that was involved in the brutal murder of Jamal Khashoggi, who was cut up with a bone saw in a foreign embassy, which we've talked about in this chamber recently. This government said that all options would be on the table in relation to Saudi Arabia, yet a couple of months later we find that the option on the table is to sell it weapons. This country is a known human rights abuser. It has been involved in the civil war in Yemen, which the United Nations has said is the biggest humanitarian catastrophe this century, yet we are selling, through Efic, a government sponsored agency, more weapons and arms to serial human rights abusers overseas. That's the level of trust we are putting in this organisation today, to which we are planning to give an extra billion dollars.

In a time of climate change, a time of climate emergency, a time of climate crisis, why would we be giving money to an organisation that has a track record of funding fossil fuel developments and has openly talked about facilitating the infrastructure for Adani, one of the world's biggest coalmines, where, once again, Australia exporting is climate change to the world? Twenty-four hours after Mr Malcolm Turnbull called a double dissolution, I remember going down to Cape Grim in the north-west of Tasmania—where you're from, Mr Acting Deputy President Duniam—and standing on the beach with a placard that said '400 parts per million' because the Cape Grim weather station, one of two monitoring stations in the world, had just measured 400 parts per million of carbon dioxide in the world's atmosphere. Our global challenge, if we're going to act on runaway climate change, is to get emissions below 350 parts per million. It's accepted that 450 parts per million is the white flag for give-it-up, runaway climate change.

That was three years ago. When I stood on that beach with that sign and nearly got blown away—because, as you know, Cape Grim has very severe weather—even though it was an ominous sign that the world had passed 400 parts per million, I would never have imagined that in the last three years in Australia we would have seen back-to-back bleaching of the Great Barrier Reef, something that our climate scientists predicted wouldn't have been possible until 2050 on our existing emissions trajectories. I would never have predicted that we would have seen the loss of Tasmania's giant kelp forests, an ancient ecosystem that stretched from north-eastern Tasmania all the way to south-west Tasmania. An ecosystem central to not just the water biodiversity of Tasmanian waters but our fisheries has gone in the last three years. I would never have predicted that we would have seen three fires in the last five summers in World Heritage areas that have never seen fire for thousands of years. I wouldn't have predicted that every weather record in this country would have been broken in the last three years since we passed 400 parts per million.

What is it now? What is Cape Grim reading now? I'm finding it very hard to find out. The last reading I could find was 412 parts per million. The Hawaiian station is reading 415. Our trajectory over the last three years means that within 10 years we will pass 450 parts per million—runaway climate change. And what do we get? What do we get from this government? We get a bill, coming before the parliament in the dying days of the 45th Parliament, to give $1 billion of public money to Efic, an organisation that has funded fossil fuel projects overseas, that has talked about funding foreign-owned fossil fuel projects like the Adani mine in Australia and that has helped facilitate a clearly political strategy to build a defence industry, to be a global top-10 arms exporter, using public money. Why would we trust and give more public money to this agency, especially under the tutelage and guidance of this LNP government, a government full of climate deniers that have taken no action on climate change? In fact, they're quite the opposite. Since they came to government in 2013 they have ripped up the world's leading gold-standard package on climate. They've cynically reduced it to nothing for their own big backers in the fossil fuel industry. No way will we support this bill to give this government and Efic another billion dollars of taxpayers' money.

Let's talk about facilitating an offshore oilfield and LNG terminal in Papua New Guinea. We know an oil company wrote to the committee about it and said: 'Let's support this. Let's get behind this. This is perfect for this kind of project.' This is a time in history for us to be saying no more—no more greenfields exploration in offshore oil and gas; no more seismic testing offshore. It's a time in history to be transitioning to renewable energy. It's time to listen to the NRMA, who came out yesterday and said: 'No more sales. The government should ban the sale of diesel and petrol cars by 2025.' That's only six years away. The peak motoring body has come out and suggested that this is the kind of thing we need to do to cut our emissions to meet the targets we need to meet, to reduce that 412 parts per million back to 350, where we need it to be to secure the future for our grandchildren.

Why is it that we are vacillating? Why is it that there's paralysis in this place to take action on climate change? The answer is simple. Big political parties, big money, are in bed together. Big donations mean zero action. That's the root cause of the problem. We need to fix a rigged political system where the Liberal Party and the Labor Party take donations from big oil and gas and we need to make sure we put in place the policies the Australian people want to transition to 100 per cent renewables, to get zero net emissions by 2030. If we don't, we haven't got time. In 10 years, we will pass 450 parts per million, and there is no turning back. There is no turning back from runaway climate change—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Whish-Wilson, the time for the debate has expired.