Senator SHERRY (Assistant Treasurer) (6:45 PM) —I would like to thank Senator Coonan for her contribution in the debate on the government’s International Monetary Agreements Amendment (Financial Assistance) Bill 2009. The purpose of this bill is to extend provisions currently contained in the International Monetary Agreements Act 1947—the IMA Act—that enabled the Treasurer to lend money or enter into a currency swap with a country in support of an international monetary fund, IMF, program. The amendments are based closely on the IMA Act provisions and will extend the current arrangements to include support for World Bank and Asian Development Bank, ADB, programs.

On 10 December 2008, the Prime Minister announced that Australia will enter into a stand-by loan agreement with Indonesia, should it be required. This loan arrangement will form part of a World Bank-led arrangement and will include contributions from the ADB and government of Japan. The amendments will enable Australia to provide the stand-by loan to Indonesia, if it is needed, as well as to enter into a loan or currency swap with other countries to support World Bank or ADB programs in the future, should the need arise.

The loan is a stand-by facility. There is no certainty that Indonesia will need to draw down on the loan. If activated, the loan will be paid back in full and an appropriate interest rate will be charged on the loan. It is in Australia’s national interest to support stability and economic recovery, particularly in our region—an issue on which there is bipartisan support. It is particularly important in the current circumstances of the world financial and economic crisis. During the debate on the bill in the House of Representatives the shadow Treasurer indicated that the coalition support this legislation, and they undertook similar activities in the past during the Asian financial crisis. I also note—and Senator Coonan has referred to this—the tabling requirements and the necessity for appropriation bills. Consistent with the 1998 IMA amendment bill, this bill will allow Australia to continue to play its part in international cooperation efforts, particularly during this time of international financial and economic crisis—the worst crisis we have seen in some 75 years.

In concluding, I do have some direct knowledge of the Asian Development Bank, its administration and its programs, because I have been the Australian ministerial representative to the ADB for the last two years. Both the World Bank and the Asian Development Bank are very strong, reputable organisations with good governance and very effective programs. I have no doubt that if the stand-by loan arrangements with Indonesia are activated, both these organisations—and I have first-hand knowledge of the ADB—are well placed to deliver effective assistance in this time of international financial and economic crisis. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.