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Tuesday, 5 February 2013
Page: 94

Ms JULIE BISHOP (CurtinDeputy Leader of the Opposition) (20:29): I rise this evening to speak on the International Fund for Agricultural Development Amendment Bill 2012. This bill, if passed, will allow Australia's re-engagement with the International Fund for Agricultural Development, IFAD. A specialised agency of the United Nations, it aims to alleviate rural poverty. Having seen the face of human suffering brought on by malnutrition, there is no disputing that much more needs to be done in this area. In times of greatest suffering, as was seen in the Horn of Africa, Australians have generously thrown their support behind international relief efforts. Food security will be one of the great humanitarian and security challenges that will confront the international community over the coming years and decades. Rising populations, coupled with the growth of new middle-class markets in regions such as Asia, will increase the global demand for protein-rich foods and cereals.

As was seen in 2007-08, sharp increases in global food prices can be the catalyst that tips fragile societies into violent ones. At that time food riots broke out in at least a dozen countries, including Egypt, the Ivory Coast, Senegal, Yemen and Mexico. In Haiti, protests over rising food prices resulted in the death of at least six people, including a United Nations peacekeeper. The country's prime minister was forced from office after Haiti's parliament accused him of mishandling the government's response. This crisis was the product of a range of factors, including drought conditions in producing countries, increasing oil prices, demand for biofuels and restrictive trade practices.

Recent analysis by the Economist Intelligence Unit has pointed to sub-Saharan Africa as the most vulnerable region for food security. South Asia is considered the second lowest, with countries like Bangladesh particularly susceptible to disruptions to its food supply. According to Future Directions International, recent disasters in the country destroyed more than a thousand hectares of seasonal crops and much of its seed inventory. World Bank Group President, Jim Yong Kim, has warned that rising food prices are:

… threatening the health and well-being of millions of people. Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly.

The coalition supports efforts to improve international food security. Our nation's history of rural development, often in the face of tremendous adversity, enables Australia to play an important—indeed, leading—role in this area. Our technical expertise in areas such as tropical agriculture, dryland farming and establishing the regulatory frameworks that sustain agricultural development is widely regarded throughout the world. This support is not unconditional, however. We have a duty to ensure that the international organisations to which we contribute Australian taxpayers' money are accountable, fully accountable, to their members. We must also ensure that any decision, no matter how great or small, is in Australia's national interest.

My concerns, where they exist, do not relate to the issue of food security, nor do I question the need for enhanced and better-coordinated international action in this area. Rather, my concerns focus solely on the organisation IFAD, the International Fund for Agricultural Development, its history of organisational shortcomings and its strategic fit within the Australian aid program. These concerns are not new. In 2004 the former Howard government withdrew Australia from the fund, citing its:

Limited relevance to the Australian aid program's priority countries in South-East Asia and the Pacific

Lack of comparative advantage and focus - other organisations are more strongly involved in rural development in our region

Failure to respond to concerns that the Australian Government raised with IFAD senior management.

The decision to withdraw from the fund was supported at the time by the Joint Standing Committee on Treaties. According to the committee's report:

AusAID has had concerns regarding IFAD’s performance in relation to the Australian aid program and its priorities for 'a substantial period of time'.

The committee found:

The lack of focus on South East Asia and the Pacific by IFAD is contrary to Australia's policy of focussing on the immediate region.


… it is reasonable to ask whether this is the best use of our aid dollar.

At the time of Australia's withdrawal, the Australian aid program's priority regions of South-East Asia and the Pacific accounted for only seven per cent of all IFAD loans over the five years to 2002, according to the national interest analysis. The national interest analysis presented to the committee noted:

Systematic assessments by AusAID of IFAD's performance have highlighted serious concerns with IFAD's lack of focus on South-East Asia and the Pacific and shortcomings in its management and donor relationships.

It was:

… the Committee's view that Australia should withdraw from IFAD and utilise the ongoing savings on overseas development assistance in South-East Asia or the Pacific.

The decision to withdraw Australia from the fund was not made easily but it was both justified and necessary. As the recent review of Australia's engagement with IFAD stated:

In 2004 these were clearly valid, important reasons for Australia to take the sufficient and protracted step of withdrawing from a UN organisation.

Given the significant financial contribution that will be asked of Australia, the Australian parliament must satisfy itself that all of these shortcomings have been addressed. We must also be assured that the millions of dollars that will be required to support Australia's ongoing membership of IFAD are not better applied elsewhere, such as combating the spread of tuberculosis in Papua New Guinea, which received less than $6 million in funding from AusAID last year. It was for these reasons that the coalition referred this bill to the Joint Standing Committee on Foreign Affairs, Defence and Trade for further detailed consideration. Specifically, the committee was asked to determine whether the International Fund for Agricultural Development has fully addressed the concerns that were raised by the former Howard government and which prompted Australia to withdraw from the organisation in 2004.

Having assessed the evidence presented to the committee, it is clear that the answer is no—the fund has not fully addressed the concerns of the former Australian government. Progressing along the reform path is not the same as having fully addressed these problems. In fact, the review of Australia's engagement with IFAD states:

… challenges remain in HR and financial management.

A 'Desktop analysis of the International Fund for Agricultural Development', an annex to the review, found:

… IFAD is benchmarked worse than peers for some aspects of financial management and administration.

Too many questions remain unanswered about the fund for the coalition to lend its support to this bill. In its multilateral assessment of IFAD, the United Kingdom Department for International Development described the likelihood of positive change within the fund as 'uncertain', as it was too soon to judge the impact of the new top management team. Given this assessment, why isn't the Australian government waiting until the likelihood of positive change is better known? Why is the Australian government making a $120 million payment to the fund in 2013-14 when the United States only committed $90 million; the United Kingdom, $82.9 million; Canada, $76.8 million; and Germany, $70 million; and New Zealand committed nothing in the last replenishment round? What is the government's justification for proposing a larger contribution from the Australian taxpayer than the United States, with an economy of $15.6 trillion; Germany, with an economy of $3.3 trillion; Britain, with an economy of $2.4 trillion; or Canada, with an economy of $1.7 trillion? Is this commitment based on careful analysis, or is it, as it appears, just the latest example of the government shovelling money out of the door in order to appear to the world as if it is meeting its aid policy commitment of 0.5 per cent of gross national income by 2016?

Far too often, just spending money is the default position for this government, without consideration of the detail—usually it is done on the back of a drinks coaster. Time after time this government has shown itself incapable of even the most basic responsibilities expected of our nation's leaders. When it comes to fiscal management, the government is content to make it up as it goes along. If Australia is to rejoin this fund, there must be no doubt that our aid money will be spent both efficiently and effectively.

According to IFAD's 2011 annual report on investigation and anticorruption activities, the number of allegations of fraud and corruption received by IFAD's Office of Audit and Oversight has increased from five in 2004 to 41 in 2011. When asked about corruption within the fund during the committee's inquiry into the bill, AusAID stated that it was unaware of any allegations. It was in IFAD's annual report. Given the amount of money that is involved, the Australian people rightfully expect that their government will undertake the necessary due diligence. It has not. Once more, this work has been left to the coalition.

As a result of these concerns, the coalition has no option but to oppose the bill. As I have stated earlier, this position does not reflect our views about the need for greater international action on food security. Rather, it is about ensuring that good public policy is achieved—a lesson that this government continues to ignore. The coalition call on the government to show prudence, to delay the bill until the concerns that we have raised are fully addressed and the impact of the reform program commenced by IFAD's new management is known and can be properly assessed. I urge the government to take this sensible and logical course, given that $120 million of taxpayers' funds are involved. As we continue to coordinate international efforts on food security and on agricultural development, the government should be conscious of the need to ensure that our aid dollar is spent as effectively and efficiently as possible—indeed, it is our obligation as parliamentarians to ensure that that is the case. The government has failed to do so. The coalition opposes this bill.