Official Development Assistance Multilateral Replenishment Obligations (Special Appropriation) Bill

Senator VAN (12:14):

I rise to speak on the Official Development Assistance Multilateral Replenishment Obligations (Special Appropriation) Bill 2019

Before I go into the details of the bill, can I recognise this Government’s continued commitment to participating in the international rules based order and our ongoing efforts to support the various international institutions that work within it.

Australian has a proud history of helping to found and support various international institutions that dates back to the League of Nations following World War One and reinforced through the United Nations following the destruction and carnage of World War Two.  

And, I think it is important to remind people how important these organisations are for international efforts to raise whole countries out of poverty, raise the standard of living for their communities and improve the lives of their individual citizens.

Through the work of organisations such as the UN, World Bank, International Monetary Fund and a range of others in the areas of humanitarian relief, health and trade, countries -  both in our region and further afield -  have benefited from the expertise and assistance they have brought to bear in times of crisis.

When I hear people rail against the Government’s commitment to international aid, economic development programs and disaster support, I just shake my head in disbelief. 

Australia is part of a community of nations and while we are a big island that sometimes has its practical advantages such as in the current COVID-19 crisis, we cannot retreat from being part of an international community.  

As a trading nation that exports good and services across the world we rely on an open and free world trading system that is supported by an international rules based order to maintain peace and prosperity.

Without that system, Australia would not have enjoyed 28 years on uninterrupted growth, growing export markets for both goods and services – especially for our agricultural, gas and mining sectors and an international reputation for low sovereign risk and a preferred investment destination.

Of course no system is perfect and there is no doubt that the international system and its institutions come under strain every so often.  That is evident in moments of crisis such as the current pandemic, or the 1997 Asian financial crisis or the 2007-2008 world financial crisis that saw devastating impacts across Asia, Europe and the United States.  

But, recovery from these events is more effective when there is coordinated international action, where countries work together to aid in recovery, deal with crushing economic burdens such as debt and help each other to undertake the necessary structural reforms to prosper into the future.

So, the  purpose of this Bill is to appropriate money to meet Australia’s existing and future obligations for many of those Multilateral Organisations that assist in times of economic crisis including:

• the World Bank’s International Development Association;

• the World Bank’s debt relief schemes including the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative;

• the Asian Development Bank’s Asian Development Fund;

• the Global Environment Facility Trust Fund; and 

• the Multilateral Fund for the Implementation of the Montreal Protocol.

These organisations bring financial resources, policy influence and convening power that leverage financial resources, expertise, influence and geographic reach to achieve greater economic and development outcomes.

Through its membership of these institutions, Australia’s own international policy and bilateral programs are enhanced.  But, we are legislatively required to honour the financial obligation for each organisation that we have made a commitment to.

This bill allows for a special appropriation to be provided for an automatic authority to pay funds where an entitlement exists. The Social Security (Administration) Act 1999, for example, contains several special appropriations to make social security payments.

The Minister for Finance must be consulted on any bill containing a special appropriation and a message from the Governor‑General is required for bills containing special appropriations.

Historically DFAT (and formerly AusAID) was able to retain the full value of the appropriation required from the year that the new replenishment obligation was signed through the Section 11 retention of administered appropriation process.  

With the repealing of the 2013-14 Annual Appropriation Acts 1 and 2 and the inclusion of an automatic repeal clause from 2014-15 in the Annual Appropriation Acts, Government Agencies are no longer able to retain annual appropriations across financial years. 

The result has been that DFAT is no longer able to retain the full value of its multi-year commitments and so cannot fund its contributions to the organisations covered by this Bill.

Australia pledges to replenish our financial contribution every three to four years with payments being made over a three to ten year period. On average, we are paying out AU$350 million annually to these commitments

This is not new or additional money – despite the decrying of some opposed to international aid.

The funds to meet the commitments authorised by this Bill will come from within the already agreed Official Development Assistance budget.

As I mentioned earlier, Australia has a proud history of involvement in international organisations dating back to the League of Nations.

In the case of the World Bank, Australia joined in August 1947 and became a member of the World Bank’s International Development Association (IDA) in 1960. 

The IDA operates the largest pool of concessional finance in the world. It provides grants, technical expertise and concessional loans to promote growth and reduce poverty in the world's poorest and most vulnerable countries. The Treasurer is on the Board of Governors.

The World Bank-managed debt relief schemes, the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative, provide debt relief to eligible poor countries.  

In 2005, the Howard Coalition Government made a 40-year commitment to support this fund; between 2001 and 2015, the average decline in crippling debt in eligible countries has fallen by 1.5 per cent of GDP, freeing up local government spending on health and education and reducing reliance on foreign aid.

In terms of practical outcomes - Australia’s contribution has supported 1.5 million new labour market programs across the world, including 3,500 young people to complete job-ready training and enter the workforce.

Another good example of where our membership and contribution pays dividends is the Asian Development Bank.

Australia joined the Asian Development Bank (ADB) in December 1966 and the Asian Development Fund (ADF) in 1973. 

Australia’s contributions to the fund provides grants to developing countries at moderate to high risk of debt distress, to promote poverty reduction and accelerate development in the poorer countries of the Asia and Pacific region.

Australia’s contributions have helped to lift 16 million people out of poverty and improved economic growth in recipient nations.

Our Greens colleagues often lament in this place about the woeful lack of this Government’s contribution to global environmental efforts.

Well – let me correct some of that misrepresentation - in the case of our funding to the World Bank’s International Development Association - Australia has been providing support to the Global Environment Facility (GEF) Trust Fund since its inception in October 1991.  

Our contributions have assisted the protection of over 350 million hectares of seascapes and ocean life, supported the phase-out of over 29,000 tonnes of ozone depleting pollutants and the safe disposal of 200,000 tonnes of chemicals, including in the Pacific. The Fund’s work has supported a 60 per cent increase in tuna stocks in the Pacific.

Also, in the case of the Multilateral Fund for the Implementation of the Montreal Protocol – also a subject of this bill - Australia’s contributions to the Multilateral Fund for the Implementation of the Montreal Protocol assists developing countries to phase out ozone depleting substances. Collective action through this Fund has seen over 215,461 tonnes of ozone depleting substances eliminated since 1991.

In concluding my remarks, let me reiterate Australia’s long standing commitment to not only these international organisations but also our commitment to the international rules based world order.

Through our network of economic, trade, security alliances and memberships, Australia draws numerous benefits from them.  

Those that seek to dismiss those benefits, fail to appreciate that Australia’s economic prosperity relies on those foundations and the benefits drawn from them.  Without us playing our part and honouring our commitments, we are diminished in so many ways.

ENDS.