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Monday, 14 September 2009
Page: 9586

Ms Julie Bishop asked the Minister for Foreign Affairs, in writing, on 11 August 2009:

(1)   How does the Australian Government intend to implement the Debt to Health Swap program, including its plans for negotiations with the Indonesian Government.

(2)   Has the Australian Government made contact on this matter with the Indonesian Government; if so, (a) on what date/s was contact made; (b) at what level was the contact, and (c) what was the Indonesian Government’s response.

Mr Stephen Smith (Minister for Foreign Affairs) —The answer to the honourable member’s question is as follows:

(1)   On 12 May 2009 the Australian Government announced the Debt-to-Health Swap with the Indonesian Government whereby Australia will forgive $75 million of debt and the Indonesian Government will contribute $37.5 million to the Global Fund to support HIV and tuberculosis projects in Indonesia. The Debt-to-Health swap will be implemented in conjunction with AusAID and the Export Finance and Insurance Corporation (EFIC). A tripartite agreement between Australia, Indonesia and the Global Fund to fight AIDS, tuberculosis and malaria will be signed once agreement has been reached on the swap mechanism. EFIC will then seek to negotiate a Memorandum of Understanding (MoU) with the Indonesian Ministry of Finance detailing debt relief arrangements and the conditions that must be met. Resourcing of $75 million allocated as administered equity in the 2009-10 budget will be drawn on and transferred to EFIC once the MoU with Indonesia is finalised.

(2)   The Australian Government, through its Embassy in Jakarta, has had several contacts with the Indonesian Government on this matter since late 2008. Contacts were made at Deputy Minister level in December 2008, January 2009 and July 2009 and at Director level in June 2009. The Indonesian Government has expressed strong support for the debt swap.