Mr McMULLAN (11:22 AM) —Mr Deputy Speaker Causley, beyond the normal thanks I thank you for coming up beyond your normal responsibilities to chair the chamber so that I would be free to speak, and I am very grateful for that; thank you very much. I am not sure everybody else will be grateful, but I am! I, of course, will be supporting the European Bank for Reconstruction and Development Amendment Bill 2005, because I concur with the view that, if the EBRD wishes to extend its services to Mongolia, we as a participating member should support that. It is a minor issue for the EBRD but a major issue for Mongolia, and there is no reason why we should not be positive about that.

I want to raise a few queries about the broader question of Australia’s participation in the EBRD. I do that explicitly accepting that I was one of the ministers who actively advocated Australia’s original membership. As the trade minister at the time, I examined the question and felt that, although it was a fairly marginal case, on balance Australia should participate. A lot of people have said that Australia should participate in this bank as a good international citizen participating in international institutions doing positive things. I have to say that that is a principle fairly selectively applied, because there are other international development banks in areas of greater need in which Australia does not participate. I do not particularly advocate our participation in those; I simply note that we have to be careful about Eurocentric double standards where we think we should be enthusiastically helping moderately well-off countries in a very important transition to democracy—which I absolutely welcome and am happy to give assistance to—but where we decline to participate in helping the poorest countries try to make their transition out of poverty.

The fact that this is unquestionably, on the part of the international community, an institution set up with good intentions is not of itself sufficient to justify our continuing participation. While it was a part of our original decision, and a welcome part—I certainly do not apologise for it; I think it is a positive element—what tipped the balance, particularly for me then as trade minister but for the government of the day, were the hope and expectation that participation in the EBRD would enhance the possibility of Australian companies participating in the development work that would flow from the re-emerging market economies of Eastern Europe.

I have to say that, while I support this bill and I hope it brings significant assistance to Mongolia, it represents a very substantial eastward creep beyond the original expectation of what the EBRD would cover. Australia is an active participant in the Asian Development Bank, and I am a bit puzzled about why that bank is not actually a significantly more appropriate institution to play a major role in Mongolia. That is no reason for us to quibble about the EBRD wanting to provide assistance there, but I do think it is a little odd. I do not think countries are assisted by a proliferation of institutions assisting within their territory. The World Bank Group is there, and I think the ADB would be more appropriate there than the EBRD.

But I have no problem with the bill. Mongolia has made this application and the EBRD has given it a positive response, and we should support that. For so long as we are members of the EBRD, we should be responsible members, and a responsible member should support this proposition—and this parliament should pass this legislation. In any event, quite properly, the Treasurer has made a commitment on behalf of Australia that we will do this and the parliament should honour that commitment—and I actually agree with what the Treasurer has done. Once the bank received the request, it was the appropriate thing to give it a positive response.

But I do have questions I want to ask. First, has there been a review of the benefits to Australian companies flowing from the decision to participate in the EBRD? I am not aware of one. I have seen no evidence of one, and I see very little evidence that any benefit has flowed. I am not as positive as the member for Bowman about the EBRD’s history and role in the area. There has been a significant economic transformation and a positive, if more modest, political transformation in the countries of the region, and it is probable that the EBRD has made a net positive contribution to that. I am not as sure that the original conception, which I supported at the time, was correct. Nevertheless, the body exists.

I would like to see what review has been done of the benefits which have flowed to Australian companies from participation, because, while there is no ongoing annual cost to the Australian budget under the current funding of the EBRD—something I want to raise a question about in a moment—Australia has approximately $90 million of capital tied up in the EBRD. Is that money delivering benefits to Australian companies by facilitating their effective participation in the programs of the EBRD? I am extremely dubious about whether it is but, if there has been a review that says it is, I would like to see the outcome. In the great scheme of the Commonwealth budget $90 million is not very much money—and it is not something that could fund ongoing recurrent expenditure, because it is a capital item—but I think there is a case for asking whether this $90 million could be better used in the interests of Australian citizens and taxpayers.

I would note in passing that our participation in the EBRD has created, to the best of my knowledge, only one job for Australians. That is the job of director, which has been successively held under this government by failed former ministers. One I regard as a very decent human being is Jim Short, a former senator who was very unlucky to lose his portfolio as a result of a technical breach—in the times when there were ministerial standards in this government. He was called upon to resign. I think that was probably a correct decision, but I do not think he did anything major or grievous and I did not really object to his being sent to do the job at the EBRD as a consequence. However, the fact that former Minister Reith has wound up in this cushy sinecure is, in my view, an outrage, although I do not think that that is sufficient reason for us to withdraw from the EBRD. It is what I would call an incidental benefit.

However, I am seriously concerned as to whether we are appropriately allocating our international effort and interest by continuing to have a full-time director at the EBRD and by continuing to have our capital wrapped up there when we could perhaps use that to make a more effective contribution in the area of our primary interest in the Asia-Pacific region or in areas where need is greater or when we could apply that capital to domestic purposes, for which there are many alternative and better demands.

I do not know who is going to sum up on this bill on behalf of the government, but I noticed earlier—and I still think it is the case—that there were no Treasury people here taking notes. That is an inappropriate situation, if that is the case. It is an oversight that should not be allowed to continue. I am advised that the procedure flowing from the passage of the second reading of this bill is that a not uncommon statement will be made that the Governor-General has approved an appropriation for the purpose of this bill and that the financial impact statement in the explanatory memorandum says that this bill will have no significant financial impact. I cannot understand why it will have any, and I would like an explanation of why it will have some. If it is the case that it involves some minor increase in our capital, that would not lead me to oppose the bill, because it will be minor, but I would like to know. There is nothing in the minister’s speech or in the explanatory memorandum to say so, and there is nothing on the face of my understanding of the nature of our commercial and contractual relationship with the EBRD to explain why there should be any appropriation for the purposes of this bill, and I would like an explanation of why that is so.

Notwithstanding that I have those major queries about our long-term association with the EBRD, so long as we are a member I certainly support the fact that we should be a responsible, positive member and that we should honour the government’s commitment and support the introduction of Mongolia. As the member for Bowman said, Mongolia is a participant in our region. It is a country that we have had the honour of effectively representing at the World Bank and the IMF. I have had that honour myself, and I have met with senior officials from Mongolia during the course of that process. We do have a small but positive relationship with Mongolia, which should be enhanced and developed over time. For all those reasons, I support the bill but I do call for a review of our long-term association with the EBRD.