Mrs DRAPER —My question is also addressed to the Acting Treasurer. Would the Acting Treasurer inform the House of any developments at the annual IMF-World Bank meetings currently under way in Washington? How is Australia assisting economic stability among the world's poorest countries?

Mr FAHEY (Finance and Administration) —I am happy to respond to the honourable member for Makin by advising that the Treasurer and the Minister for Foreign Affairs today announced that Australia will make a new contribution to an initiative for the world's poorest nations so that they might escape the burden of debt. The Treasurer, as the Prime Minister announced earlier, is in Washington attending the annual meetings of the IMF and the World Bank and he has announced today that Australia will provide an extra $35 million to the Heavily Indebted Poor Countries Initiative. This in fact will more than double our existing pledge. This initiative is a multilateral plan to provide debt relief to the world's poorest countries, provided they are pursuing IMF and World Bank supported reform programs. The additional funding is aimed at providing these countries with faster, deeper and wider debt relief to ensure that it more directly contributes to poverty reduction.

The world's developed economies have a historic opportunity to help some of the poorest nations in the world to escape from crippling debt burdens. Writing off unpayable debt will free resources for poverty alleviation and will help these countries on the path to economic growth, which ultimately is in Australia's best interest. Of course, debt relief should not be at the expense of broader efforts to reduce poverty in developing countries. After all, lasting reduction in debt and poverty requires nations to adopt policies and to generate sustained economic growth.

It is worth remembering that Australia is in a position to fulfil its regional and international obligations only because this government is managing the economy well and running responsible monetary and fiscal policies. If we were still running budget deficits, we would not be able to help our neighbours through means such as the Heavily Indebted Poor Countries Initiative. That would be bad for our less developed neighbours and, ultimately, that would be bad for Australia.