Senator JOYCE (Leader of the Nationals in the Senate) (11:17 AM) —I rise to speak on the International Monetary Agreements Amendment Bill (No. 1) 2010. The coalition supports the International Monetary Agreements Amendment Bill (No. 1) 2010. This bill amends the International Monetary Agreements Act 1947 to allow Australia to accept the changes to the New Arrangements to Borrow adopted by the executive board of the IMF on 12 April.

On 2 April 2009, the G20 countries agreed to increase the level of finance available to, and the number of members involved in, the IMF’s New Arrangements to Borrow. The New Arrangements to Borrow is a credit arrangement between the IMF and 26 members and institutions to provide supplementary resources to the IMF in times of economic turmoil.

The former Treasurer, Peter Costello, worked to establish this mechanism, which came into effect on 17 November 1998 and has been renewed twice, most recently in November 2007. Australia has supported these arrangements since that time, and that support is not wavering today at all. On 12 April this year, the executive board of the IMF approved changes to the new arrangements to increase the finances available and to make the system more flexible. This decision resulted in a tenfold expansion of the resources available.

This bill will increase the credit line in the IMF’s currency of special drawing rights. Australia’s potential exposure will be approximately $7.3 billion at today’s exchange rate, and one should note that at this point in time Australia’s gross borrowings are in excess of $147 billion and heading very quickly to $150 billion as a result of extremely bad management by the current Labor government, which, for all intents and purposes, seems to be in a state of turmoil. Should the IMF access this credit—and we hope it will not have to—the loan would have to be repaid in full with interest in five years. No doubt, Australians would have to acknowledge that they would most likely be going overseas to borrow this money to lend back to overseas.

The changes to the new arrangements also include changes to the number of participants in the mechanism. China, Russia, India, Brazil and nine other countries will now be involved in the new arrangements. In terms of flexibility, the changes require a large majority of participating members to agree before the New Arrangements to Borrow can be activated. The successful passage of this bill would mean that Australia will be supporting the New Arrangements to Borrow and therefore would provide the consent required by the executive board of the IMF to activate the changes to the terms and conditions. This bill will also confirm Australia’s commitment to that G20 agreement, as well as its strong and ongoing support of the IMF.

The coalition acknowledges that the participants at the G20 meeting that is scheduled have lately changed—as of this morning—and we acknowledge that the current turmoil and pandemonium that is apparent in the Australian Labor Party is having effects on how people perceive Australia. The sooner Australia can settle down and get itself good government, the better it will be for all of us.