Mallard Trevor: International Finance Agreements Amendment Bill — In CommitteeText is incorporated into the Bound VolumeMallard Trevor: International Finance Agreements Amendment Bill — In Committee[Sitting date: 10 November 2015. Volume:710;Page:7815. Text is incorporated into the Bound Volume.]The CHAIRPERSON (Hon Trevor Mallard): I will give the Hon Phil Goff the call in a second but—I apologise to the members again—I misdescribed the debate. We are now debating Part 2 which includes the clauses I mentioned but also the schedule. Given the size of the schedule it is a fair proportion of the bill.Hon PHIL GOFF (Labour—Mt Roskill): We can indeed talk about the schedule. I thought we would be having a separate debate on the schedule—The CHAIRPERSON (Hon Trevor Mallard): No we are not.Hon PHIL GOFF: OK so let me address some of those things too because what is in the new schedule 8 in the schedule is important—that is the articles of agreement. It is 30 out of the 34 pages of the bill. It is therefore pretty critical.But I want to also address one amendment that the committee made which was to clause 9. Under clause 9 we deleted new section 8(1A). I want to talk about the reasons for that. New section 8(1A) basically gave article 19(1) of the articles of agreement the force of law in New Zealand. So a layperson reading this might ask why we would delete that. What article 19(1) does is prohibit members of the Asian Infrastructure Investment Bank from imposing restrictions on currencies held or used by the bank. That will still govern our actions anyway but the advice that the select committee was given was that it was not necessary. This article and the restrictions that it imposes do not need to have effect domestically for us to still be bound by it so it was not necessary for that to be included. Secondly it would be inconsistent with all of our other agreements with other international financial institutions if we were to include that clause. So not too much should be read into the fact that that clause has been taken out. It is simply that it was not necessary and it would have been inconsistent.Can I come now to the schedule of the bill which is really important. First of all article 1 sets out the purpose of the bill which is to “(i) foster sustainable economic development create wealth and to improve infrastructure connectivity in Asia by investing in infrastructure in other productive sectors;”. Also I think the second factor is significant—“(ii) promote regional cooperation and partnership in addressing development challenges …”. So that sets out clearly what the purpose of this bank is and why we would want to be a member of it. It makes it clear that membership is open to members of the International Bank for Reconstruction and Development—that is the Asian Development Bank as we know it. It talks about the amount of authorised capital stock that the bank shall have. The sum set out under article 4 is some US$100 billion—that is US$100 billion. So what that gives us is a sense of the size of this bank and the significance that it will have in achieving the purpose for which it is set up.We are investing in this bank remember because the Asian Development Bank and the World Bank were not meeting the level of demand in the Asian region for investment in infrastructure and that US$100 billion is clearly large enough to make a difference. Article 5 sets out the way in which we make our subscription to the organisation which is in five instalments each of which is 20 percent of the amount that we have to pay. That represents US$18.4 million a year. So it is a significant sum that we are contributing but compared with the larger countries like the US$30 billion that China is putting in it is relatively small but symbolically it is important and that is deemed to be our fair contribution.Article 13 sets out the operating principles and I think it is important that the bank shall be bound by sound banking principles. If this bank was not going to operate according to those principles and if we had not been involved in the negotiation and we were not confident in that then we would not be making this investment. So that is also pretty important.I want to touch on one other section if I can find it in terms of the election of the president of the bank which is really important. It sets out the principle that the election should be by an open transparent and merit-based process. If we need to have confidence in the way that this bank operates it needs to operate according to best international practice. I think the articles of agreement in front of us can give us that confidence—