Shearer David: International Finance Agreements Amendment Bill — Third ReadingText is incorporated into the Bound VolumeShearer David: International Finance Agreements Amendment Bill — Third Reading[Sitting date: 12 November 2015. Volume:710;Page:7983. Text is incorporated into the Bound Volume.]DAVID SHEARER (Labour—Mt Albert): As my colleague David Parker said earlier Labour is supporting this bill and commending the Government for pushing this through—the acceptance of the amendment to the International Finance Agreements Act 1961—so that New Zealand will be one of the founding members of the Asian Infrastructure Investment Bank. Being a founding member obviously has some advantages and those advantages have been spoken about at some length earlier. Perhaps more important and more strategic is that New Zealand is a member of the Asia-Pacific region. We have huge and growing interests in this area. Six out of our 10 top markets are located in this area and with the expansion obviously of China and of Japan too but also of Viet Nam and Malaysia we are seeing growth here that is very important for our economic welfare into the future as well. So being part of this agreement is important. I think that getting in and being one of the first countries the first Western country to be part of this sent a very good signal and a strong signal about our commitment to the region and the way that we see our future.As the last speaker Dr Shane Reti was talking about the real demand for infrastructure development in the region is huge. Even the Asian Development Bank put the needs at around about $8 trillion and the IMF talked about it as being about $1 trillion per year. Most of that—51 percent in fact—was estimated to be needed in the electricity sector but the need is not only in that but in rail in road and in a whole range of other infrastructure areas as well. So there is a real demand within the Asia region which underpins its further development and the welfare of its people to be able to provide those basic services that enable them to develop and by rights create the markets for our goods as well. So it is a beneficial cycle that we are trying to create here. As I say it helps and it enhances the welfare and the prosperity of those people living in many of those countries but at the same time there is a benefit to New Zealand as well.That demand and the way that this bank is going to be able to meet that demand were well set out by Alan Bollard a very well-respected former official from New Zealand who now serves in the APEC secretariat. He spoke of the real advantages of this bank coming into operation. It did not have the easiest of births. There was some push-back particularly from the United States which—I think rather unwisely—looked at this as being an extension of China’s influence in the region which to some degree we admit to in the sense that China is one of the big stakeholders in this bank and is putting billions in. It is by far the biggest shareholder in the bank and is putting billions into it. But actually why should it not be? If you look at the other big Bretton Woods institutions—the IMF the World Bank the Asian Development Bank—they are products of the Second World War. This is a changed world now where China does hold a greater degree of influence around the world and greater economic clout as well.The important thing I think about the bank and particularly China’s involvement is being in on the ground floor as we have been and particularly the influence of John Whitehead another of our excellent officials—extraordinarily well qualified and respected. His being there has enabled us to be at the table when the principles and the values and the working procedures of the bank have been set up so that we can be confident that the bank is going to be seen to both be transparent and have best practice. That has been perhaps one of New Zealand’s greatest contributions to the future of this bank.So although China will have 20 to 30 percent of the voting rights in the bank alongside it will sit at least 50 other countries. As Dr Shane Reti just mentioned New Zealand will be there with a very modest input into the bank—a very modest voting right—yet it will actually have quite a lot of influence in the way that the bank operates and benefits New Zealand as well. We put in as has been said about $145 million putting up capital over the next 5 years—so it is a relatively modest amount. We also put forward about NZ$461 million as callable capital although we have to acknowledge as far as I am aware anyway that with the various shareholdings we have had in international operations and institutions around the world I do not think we have ever been asked—our contribution has never been called up in the past. I think that is a pretty rare possibility.The other thing that I want to touch on and that David Parker mentioned as well is the fact that environmental and social impacts are in the bank’s operation as well so that the rather disastrous big power projects and environmental projects that have taken place in the past will at least be mitigated against. We will be able to see some of those large inappropriate types of projects having to address the environmental and social impacts before they will be funded by this bank.There were no submissions from the public to the select committee on this. In some ways I am not quite sure why that was. Perhaps because it looked like it was a bank a financial institution people were not interested. But I think it is a very significant part of New Zealand’s contribution standing alongside China which was the main proponent of the bank. It stands alongside our other firsts with China starting off in 1972 with our formal recognition of China and most recently in 2008 with the first free-trade agreement well before the Australians across the ditch. We actually got in there well before them and had our first trade agreement which of course happened under Phil Goff’s reign as the trade Minister.There is no doubt that the bank is responding to a need and a demand. As I have said the infrastructure demands from right across Asia are enormous they are immense and we need to be able to be sure that they are met. To repeat one more time there are certainly countries across Asia—and I was in one this week in Myanmar. Looking at its infrastructure the demands that Asia has for infrastructure are immense. Meeting those demands—by meeting electricity transport railway and all of those types of infrastructure demands—will mean that people’s lives will be significantly uplifted or provide the basis for further economic development. That economic development will trigger more demand for goods that New Zealand is able to produce. So I see that this is a positive step for New Zealand. I was pleased that the Government moved quickly in support of the bank that it got in on the ground floor and that it got somebody as illustrious as John Whitehead to be there at the table to make sure that this bank upholds the best practices that it is possible to have.I think this is a good investment and something that New Zealanders will recoup in terms of both our influence and our economic ability and potential into the future. So I commend the Government and once again congratulate them on moving ahead in this and obtaining Labour’s support. Thank you.