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Thursday, 17 October 1996
Page: 4465

Senator SANDY MACDONALD(7.14 p.m.) —I rise to support the government members' minority report into the abolition of DIFF, the development import finance facility. This inquiry was nothing more than a cynical attempt by the opposition to discredit the Minister for Foreign Affairs, Mr Alexander Downer. The opposition at tempted to do this in the other place last July and, after having failed, they decided to set in place an inquiry in a further effort to discredit the minister.

Through the numbers in the Senate, the inquiry went to a Senate references committee on which the opposition has a majority. I think that was inappropriate, but that is an argument for another time. The opposition's report is a last ditch stand to bring the minister to task—and what a weak attempt it is. Nothing has come out of this inquiry, after weeks of evidence and close interrogation by the opposition, that was not known before. No additional information has come to light that has not already been forwarded by the minister, firstly, in his statement to the parliament on 26 June and, secondly, in his subsequent letter to the Speaker on 19 July.

All the opposition majority report can come up with were the following recommendations: firstly, that Mr Downer be requested to appear before the committee to give evidence; secondly, that the Senate order the Minister for Foreign Affairs to provide the committee with more documents and more information; and, thirdly, an extension of time for the committee to report to the Senate on terms of reference (d) and (f) by one month after the first two recommendations are complied with. This is a pretty weak effort. This is after putting five senior AusAID and DFAT officials through an interrogation, which included over 900 questions, over a period of nine hours in four separate sessions.

The senior officers who faced this barrage included: two deputy secretaries, a first assistant secretary and two assistant secretaries from DFAT; and the Director-General of AusAID. AusAID and DFAT also submitted a comprehensive 105-page joint submission. As well, a considerable amount of additional material has since been provided in writing by AusAID and DFAT. The government has been entirely open and cooperative. The only information not provided was information which no government would consider releasing due to considerations of national interest; that being the confidentiality that exists between governments and their officials and inter-government communications—all of this in a futile attempt to bring the minister into disrepute.

It is worth noting that the minister's non-appearance was in accordance with proper procedure and consistent with the long tradition observed by governments of both persuasions that ministers from the House of Representatives do not appear before Senate committees. We can all well remember Mr Keating's famous statement in December 1992, where he said:

Then you want a Minister from the House of Representatives chamber to wander over to the unrepresentative chamber and account for himself. You have got to be joking. Whether the Treasurer wished to go there or not, I would forbid him going to the Senate to account to this unrepresentative swill over there—

That was the reply to a request of the Senate Select Committee on the Functions, Powers and Operation of the Australian Loan Council for both the Prime Minister and the Treasurer to appear. I also recall that, in 1994 in the Senate select committee on the print media of which I was a member, we attempted to call the Treasurer to come before the committee to answer some queries about the operation of the FIRB. The Treasurer refused to provide documents and, in fact, instructed officers not to give evidence.

The other recommendation in the majority report that I take particular exception to is that the withdrawal of funding has had a serious effect on Australia-Indonesia relations or in fact on Australia's relations with the four DIFF recipient countries or in fact other regional countries in east Asia and the South Pacific. As the minority report states:

. . . Australia's relations with China, Indonesia, Vietnam and the Philippines are multi-faceted and multi-layered and not so fragile as to fracture over the termination of the DIFF scheme and that the aid relationship is only one small part of the overall bilateral relationships.

It further states that the government's decision to provide additional funding of $64 million for high priority projects, able to be nominated by recipient country governments, will go some considerable distance toward accommodating those high priority project applications that had significantly advanced through the selection process at the time of the scheme's termination.

Whilst the majority report adequately describes the scheme's history and evolution, the manner in which the opposition members have interpreted aspects of the evidence fails to take into account both the breadth of the evidence presented to the committee and the economic imperatives underpinning the decision to terminate the scheme. It must be remembered that this government inherited a $8 billion deficit on 2 March. It is sensible that some contribution be made to that from the aid budget. It would not be possible, nor desirable, to exempt the aid budget while other departments and programs bear the full brunt of cost cutting.

Finally, I would like to say a few words in regard to the equal impact on the Australian economy and on those Australian companies who had been involved in the DIFF scheme. Whilst the evidence presented to the committee did not enable a definitive assessment regarding the extent to which DIFF provided industry assistance to exporters to be made, the evidence provided by some company representatives indicated that a concessional finance package was necessary in order to engage in project negotiations with certain countries.

Whilst individual companies detailed the commercial benefits flowing to them as a result of winning DIFF support, the net effect on the Australian economy is unclear. There have been a number of inquiries provided by the government, some of which remained reasonably unpublished, including making DIFF better, which bore that position out.

Debate interrupted.