Tabuteau Fletcher: International Finance Agreements Amendment Bill — Second ReadingText is incorporated into the Bound VolumeTabuteau Fletcher: International Finance Agreements Amendment Bill — Second Reading[Sitting date: 05 November 2015. Volume:709;Page:7759. Text is incorporated into the Bound Volume.]FLETCHER TABUTEAU (NZ First): It has been wonderful to listen to the naivety almost of some of the contributions of the speakers this afternoon. They speak as if this were the only way to build relationships and to get into the good books of China. It is just wonderfully one-eyed and focused on—I do not know—something that suits them. It is a very focused narrative.I acknowledge that this is a very simple piece of legislation which changes a few lines in the International Finance Agreements Act 1961 in order to facilitate New Zealand’s participation in this Asian Infrastructure Investment Bank but New Zealand First continues to oppose this legislation. There are two main reasons for our opposition. They have not changed since the first reading mainly because the Government has not addressed the first issue that we raised and it is in no position to change it; it is too late. The second reason is actually based on the realities of international infrastructure and investment banks around the world and especially the realities of investing in China and the broader region that this bank presumes to represent.On the first point I say to those on the opposite side of this House that the New Zealand Prime Minister needs to look New Zealanders in the eye along with some of those National bankbenchers. They need to look their constituents in the eye and talk to them about their broken promises and explain how selling off New Zealand assets and essentially giving our money to this investment bank could possibly be any better than spending it in New Zealand—rather than giving it away. The Prime Minister and that National Party broke a promise to every New Zealander. New Zealanders opposed the sale of our assets. All who were opposed to the sales including New Zealand First were told that the resulting funds would be spent on hospitals schools and infrastructure in New Zealand.We were all told it would be spent on paying off this Government’s debt which continues to balloon out of control. We were told it would be spent on rebuilding Christchurch. That was the promise made to all New Zealanders and it comforted many. It comforted many who thought it was our only choice because that was the line given to them by this National Government.With the claimed mandate that it clearly did not have and does not have now the Government sold off large chunks of New Zealand assets. Despite promises to the contrary in fact as it turns out it sold them mainly to foreign investors. There will be hospitals there will be schools and there will be roads built but not in New Zealand. That is the reality of this investment. The Government has agreed to put US$92 million upfront into this investment bank. It has agreed to commit more than half a billion dollars to be set aside to be what is termed “on call” should the investment bank be so desirous as to call upon it. Actually as the New Zealand dollar devalues and because these discussions were had in United States dollars our commitment grows and grows daily as our dollar falls. We are talking about a NZ$145 million commitment and $560 million for the “on call” commitment totalling well over $650 million of commitment.I do not think that anyone could dispute that this is a vast sum of money which could have been invested in New Zealand infrastructure—this is our main argument—into cell towers broadband infrastructure roads schools hospitals or rail all of which are sorely needed now. We could have set up a regional growth fund for example and used our regions and that money to rejuvenate our New Zealand economy through our regions. What a dream what an aspiration—but no this money goes overseas.Firstly New Zealand First insists that infrastructure development just like charity actually should begin at home especially as this Government’s debt spirals out of control and unemployment rises and business confidence falls. If New Zealanders were not already suffering if our regions were not already missing out if our exports were not actually declining if real unemployment in New Zealand was not actually on the increase and if money used to buy into this club was not in fact sourced from a broken promise given by the Prime Minister New Zealand First would actually welcome a discussion on this Chinese initiative.Now to my second point around the opposition to this legislation. I will quote some experts on infrastructure investment from around the world. Kent Kedl of the company Control Risks has stated of investment into China that “you don’t become successful in China as a purely private entity you need a powerful connection.” He was speaking to words from another investment business adviser who noted: “There are no genuinely private companies in China.” He is of course quite correct. And to quote The Economist “The state and the party are omnipresent and their role is enshrined in law.” Let us be mindful that Japan and the United States have refused to participate in this bank citing issues with the bank’s governance among many other issues. “Peter Williamson of Cambridge University’s Judge Business School argues that the [Chinese] government will always meddle with firms in industries it sees as strategic even if they are multinationals.”What consideration has been given to these issues? This problem is not unique to China and those members of this House who have worked in this space will appreciate that developing countries with weak institutions and poor governance are often far bigger obstacles to growth than actual lack of funds. I acknowledge that China is searching desperately for investment dollars as it switches its economy from infrastructure development to a consumerist one. New Zealand First would point out however that this infrastructure bank is not the whole answer and will provide little or no benefit to New Zealand. We must consider the realities that history has shown us again and again. A project presented to this type of investment bank will often look good on paper; practical implementation on the other hand is often a frustrating and sobering experience. Costs provided to investment bank projects historically far exceed initial estimates and planners bidding for funds often woefully underestimate the skills and funds needed to ensure the maintenance and repairs of these big infrastructure problems.It has been interesting to note the contributions from members today as well. They have been speaking as if our participation in the Asian Infrastructure Investment Bank has been a matter for this Parliament or the Foreign Affairs Defence and Trade Committee. Actually there was no discussion of our participation in the details as such in the select committee. I will remind this House that actually this Parliament did not make any decision to participate. The details of the Government’s participation in this investment fund came to the select committee after the fact. All decisions had already been made in relation to our participation in the infrastructure bank itself. Our consideration and discussion is after the fact. It had already been signed.This Government has bitten off more than it can chew. It has committed far too much of New Zealanders’ money that was supposed to be used for New Zealanders. The advantage of being an early adopter has perhaps compromised our negotiation power in the Trans-Pacific Partnership as we undermined our relationship with the US. We will not have a say on how the money will be invested and to the Minister of Finance I say again: we will grow strong with Asia but the benefits arising from this bank alone are highly questionable. Without doubt New Zealanders would have preferred to see over $650 million invested directly into the New Zealand economy. Perhaps then we as an economy could have better contributed to our immediate region’s growth. The Minister’s logic is backward at the least and flawed in reality. Thank you.