Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 10 December 1974
Page: 3316


Senator COTTON (New South Wales) - In the sort of turbulent life that we live in this place it is very nice from time to time to enter some sheltered water of total agreement on measures that come before the Senate. This is one such measure of which I think all Australians approve. They have always approved, and I am quite sure that we all approve, the development of this further aid program. The Bill seeks parliamentary approval for Australia 's financial contribution to the fourth replenishment of the resources of the International Development Association. Our commitment as a nation is approximately 2 per cent of the total funding of the Association, which on last counting was US$4.5 billion, provided by the various member nations. It will be brought to that level in the triennium commencing 1 July 1974. Australia's contribution in this measure is $A60,810,811 which is a contribution that I think everybody will welcome. The Association is a quite remarkable body. The second reading speech is very long. I do not propose to deal with all the facts of it. This Association has done a great deal of good in the time that it has been in existence. The loans that are made by the Association are non-interest bearing and are repayable over 50 years. There is a 10-year lay-off period before any repayments are due. That is extremely wise. Most people have been involved in development activities in their own life- many Government senators have, as indeed I have- and the experience is that it takes about 10 years to get something really on its feet. Very often such developments tend to lose cash for the first 5 years and after that, with a bit of good management, they can reach a position of some equilibrium. So the 10-year grace period for lay-off is a wise precaution. Many of the nations that are in receipt of aid have a very high level of external debt, and the problems of funding their development are therefore quite massive.

The IDA is affiliated with the World Bank. It has a common staff" and a common investigatory process. Despite what people might imagine, because interest rates are very low, indeed infinitesimal, there is a service charge of % per cent to 1 per cent for administration, and so on. It is a nominal fee. One might imagine therefore that the money is easily obtained, but it is not. The scrutiny process is very intense. It is done by the World Bank with the same intensity as it does all the things that it is engaged in. The exercise is of interest to Australia, because it has been an area of aid and development capital for some of the countries in our region. India, Indonesia, Pakistan and Bangladesh have all had substantial help from the International Development Association. Papua New Guinea has had a US$25. 2m capital loan for various activities and it is said that more will be approved for Papua New Guinea 's purposes.


Senator Sir Magnus Cormack - They will not need that when they take over the Bougainville copper mine, will they?


Senator COTTON -I do not really know, senator. I am not in the Treasury of Papua New Guinea. A friend of mine is, but he has not told me what his financial problems are. Australia has so many problems of its own that I tend to concentrate my attention on the Australian scene. The funding of this operation is based upon a promisory note arrangement. The promisory notes are issued at the beginning and they are called up and cashed as required.

It is said that there will be no budgetary impact in the year ending 1974-75 because of the passage of this measure. That, of course, is the Government's responsibility, not mine. I should have imagined that, in the world liquidity position, countries such as Australia that have given promissory notes may well be called upon for cash earlier than they might have thought. That is not something that the Opposition is in charge of or in control of. The general program is one that we ourselves were engaged in when we were the Government. We then thought that it was a good plan and a good program. We supported it then and we support it now. We welcome the measure and we approve it.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.







Suggest corrections