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Thursday, 15 September 1983
Page: 914

Mr GROOM(4.29) —We are dealing with the International Development Association (Special Contribution) Bill, the International Monetary Fund (Quota Increase) Bill and the Asian Development Bank (Additional Subscription) Bill. These three related measures concern financial arrangements to assist developing countries in our region and in other parts of the world. As the honourable member for Warringah (Mr MacKellar) mentioned earlier, they arise out of commitments made by the previous Government and they certainly deserve the support of the House. The International Development Association (Special Contribution) Bill authorises a special contribution by Australia of $A67.84m towards the sixth replenishment of the resources of the International Development Association, or the IDA as it is commonly known. The IDA is an affiliate of the World Bank and assists poorer developing countries with funds for special development projects which they need. It should be said that many of these projects contributed to by the IDA are outside Australia's immediate region. One major recipient is India. In 1978 I had the pleasure of leading a delegation of this Parliament to India and we there saw a number of the projects which had been funded by the IDA. We saw at first hand the great value of the financial support being provided by the IDA. As the honourable member for Warringah said, both India and China are major recipients of funding from the IDA. They are countries with enormous populations and very special problems, and they certainly deserve continuing support.

The second Bill that we are debating is the International Monetary Fund (Quota Increase) Bill, which seeks the consent of the Parliament to enable Australia to increase its quota in the International Monetary Fund and to make a consequent payment. We were informed by the Minister for Housing and Construction and Minister Assisting the Treasurer (Mr Hurford) in the second reading speech that this Bill is a financial transaction-as I understand it, in the form of essentially a paper transaction-and is unlikely to have an adverse effect on the Budget outlays or on the Budget deficit. That is a very pleasing feature, because the Government faces a very high deficit indeed this financial year, and we cannot afford to have any significant increases in that deficit because, as has been mentioned previously, that would only place increased pressures on a whole range of areas, including interest rates; but we are not talking now about interest rates.

The third Bill is the Asian Development Bank (Additional Subscription) Bill 1983, and again this Bill seeks approval of the Parliament for Australia to take up its entitlement to additional shares in the capital stock of the Asian Development Bank. The Asian Development Bank has a very good record in providing loans at consessional rates of interest so that poorer nations in this general region can finance suitable projects. It is envisaged that the payments to be made under the proposed arrangements will be by five equal instalments of about $A2.9m a year from 1983-84-this financial year-and that the remaining 60 per cent would be in the form of five promissory notes in equal amounts to be encashed over the years 1988-92.

These Bills highlight a serious crisis which has developed in recent times as the debt faced by the Third World has increased almost beyond control. This is a very serious situation that is faced by many nations around the world. I want to comment on it briefly. Before the price of oil began to skyrocket in 1973, the total debt owed outside the Organisation of Petroleum Exporting Countries was about $100,000m. By the end of 1981, that debt had risen to $470,000m, and it is estimated that, by the end of last year, it would be some $530,000m. So in a short time we have seen a very dramatic increase in the debts faced by poor nations in many parts of the world.

What has happened is that as principal and interest have become due, the loans have simply been turned over. The countries have not been able to pay off their obligations and have simply gone into further debt to pay off old loans. Of course, the same sort of predicament can be faced by individuals, by families or by companies, and the end result is not very dissimilar from the result that can occur to nations. In the end there can be a total financial collapse. But at this stage that has not yet occured, mainly because of the arrangements that have been made by lending institutions, both public and private, to give support to these nations.

It has been said that the real crisis would occur only if banks stopped lending . But it is a dangerous path to go down when nations cannot fulfil their commitments and so the lenders simply provide further funds. It leads, I think, to a carelessness on the part of some countries, and it can certainly lead to inefficiencies. I would not want to point the finger at particular countries. We have heard a lot said about Brazil and its problems of late, and about Mexico. There has also been some criticism of the IMF. From my knowledge of the IMF, I think that it is a very well organised, very well managed, institution. It applies very strict conditions to the funds it lends. It takes a very keen interest in the projects which it is funding. I think that the crisis, essentially, has arisen from a whole range of different factors and circumstances which are occurring at present. But there is a need for strict supervision of any funds provided by taxpayers. Of course, in this package of Bills, in at least one of the Bills, we are dealing with funds being provided by the taxpayers. Therefore, we have an obligation as members of parliament to take a very keen interest in these Bills and to make sure that the funds that are provided are handled with care and are administered efficiently.

On a more general note, it causes me some concern that we have so many different international bodies mushrooming up around the world at present. It is not a mushrooming just of different kinds of lending institutions-I think that there are pressures to create a Great South Bank, as it is called, and other banks around the world to help different countries-but of all kinds of different international organisations. Along with that we have the development in different parts of the world, within these international organisations, of huge bureaucracies, and they do not come cheaply. It costs a lot of money to maintain these organisations. Huge amounts of money are being spent by way of salaries at present. There is a problem that with an international organisation -I do not need to name them; honourable members know which they are-there is not the direct influence that the public can have, say, on our own national bureaucracy. They are, to some extent, removed from the real world.

I do not want to be unfair to those directly involved, but I think it is a fact , and I think that many people involved in the organisations recognise this. If one attends an international conference or meeting of one of these organisations , one finds that it is a kind of club; people mix together, and they are removed from the feelings of the ordinary taxpayers, who are, after all, to a very large extent, paying their salaries and providing the funds that they must administer. As we have said many times in this House, particularly those of us on this side of the Parliament, we have a responsibility as trustees of public funds. It is not our money that we are spending. It is money that has been raised by hard working taxpayers in the main, and therefore we must be very careful about how we should spend such money and make sure that that money is not wasted.

Having made those points, I want to indicate that, as has already been said, the Opposition supports these Bills. In fact, they were initiated by our joint Party some time ago. We generally approve of the activities of the organisations concerned and the sorts of projects in which they are involved. We have many problems within Australia at present. We have high unemployment, and it is tragic that in the Budget Papers, for example, it is indicated that unemployment will grow during this financial year. According to Budget Paper No. 1, it will edge up in this financial year. It is difficult to control unemployment at this time, so we must do all we can to try to overcome that problem. That does not mean that we do not have wider responsibilities as well. At the same time, we must be concerned about nations that are close to us and nations with special problems. There are poor countries around the world with very serious problems. There are people living in dire poverty. Certainly they deserve the help that we can provide, even though, compared with nations such as the United States of America, the assistance that we can provide is rather limited.

We have a special responsibility, in particular, to help developing nations in the Asian region and in the Pacific Basin. It is important for our own self- interest that we do what we can to improve relations with out friends, the nations in the Pacific Basin and the member countries of the Association of South East Asian Nations. It is important particularly that we develop good relations with the countries to our near north-that is, the ASEAN countries. They are very important to us. I have made this point in the House on previous occasions. I do not think that our relations with the ASEAN countries are as close and as harmonious as they really ought to be.

That is not to say that a lot of good work is not being done at present. In fact, a tremendous amount of work is being done to develop closer ties with our neighbours in the north. Businessmen are going from Australia on special visits to ASEAN countries. At the same time business people and civic and political leaders are coming from the ASEAN countries to Australia. So there is personal contact, which I think is very important. We have to back up that contact with some assistance where we can, and that is the purpose of these Bills. If there is a risk in the future of an external threat to Australia my feeling is that it will come from that area to the north. I do not wish to offend countries to the north. Countries can fall into different hands at different times. For example, Indonesia is a huge country with a very large population. We have good relations with Indonesia at present, but if it fell into the hands of people who were internationally irresponsible I think there could be very real dangers for Australia. Therefore, I again make this point: Let us try to do all we can to improve relations with countries to our near north-indeed with all countries, but particularly with those in our region.

Another point relevant to the whole matter of aid and to these Bills is that we must ensure that the Soviet Union does not increase its influence in the Pacific Basin region. There is no doubt that an effort is being made by the Soviet Union to increase its influence in this important and sensitive region to Australia. The recent shooting down of the Korean commercial aircraft shocked the world. It was a disgraceful act by the Soviet Union. We are all very upset about that and the great loss of life that resulted. People in the Pacific region particularly are upset because they are so close to where that event occurred. They feel very strongly about that episode. As we reflect upon it we can see that it was a very sad and sorry episode in the history of the world. That episode will not improve the opportunities of the Soviet Union to increase, as it wants to, its influence in that very important part of the world.

Recently the South Pacific Forum was held in Canberra, and from my reading of what happened at that meeting it was a very successful event. I think it is great that we are holding these sorts of forums regularly and that we are having this good contact with countries of the South Pacific. We are not trying to dominate these countries in the South Pacific, which is terribly important. It has to be a very sensitive kind of relationship. We were originally seen as an outpost of Europe controlled by Britain. We were seen as British, but I think we are now being seen as Australians. We are Australians, we are an independent nation, and this is being recognised by the countries in the South Pacific. It was good to see how successful the South Pacific Forum was and I congratulate the Government for the way it organised the Forum. I have heard comments made that it was a very successful meeting of leaders from around the Pacific area.

I think the approach that has been taken by recent governments and the present Government-I give it credit-guided by the Department of Foreign Affairs in the area of aid and relations with our neighbours has been very good. We have an excellent Department of Foreign Affairs which is highly regarded throughout the region. The officers do an excellent job. They make sure that governments which sometimes stray off the path are put on the right path, and that is terribly important. Generally we welcome these Bills. We think it is important that we provide assistance to other countries in great need, and that will be achieved by the provisions of these Bills. Therefore, I support the Bills.