Hughes Darren: International Finance Agreements Amendment Bill — First Reading 
Hughes Darren: International Finance Agreements Amendment Bill — First Reading 
[Volume:639;Page:9101] 
DARREN HUGHES (Labour—Otaki) 
: 
 It has been very interesting listening tonight to the debate on the first reading of the International Finance Agreements Amendment Bill and to the various points that have been made by different speakers. What comes through from what everyone has had to say has been the role New Zealand plays in trying to be an honest broker in this area of overseas development assistance and in trying to use international organisations to ensure that we have progress on the things that New Zealand considers important. 
This is particularly so around how to bring as much assistance as we can to those in poverty-stricken countries where there are structural problems in the economy so that people do not earn any decent wages to be able to support their families or where there has been some sort of catastrophic natural event. This could be by way of a tsunami or a hurricane or a famine or an earthquake—something like that— 
Hon Rick Barker 
: Plague of locusts. 
DARREN HUGHES 
: It has been a while since we have seen that but I suppose we have to be prepared. Only the Minister of Civil Defence Rick Barker would think out along that way but we have to be ready for these things. 
Although New Zealanders are very generous individually and the New Zealand Government is always trying to do its bit as well—although the extent to which we go is an area of debate; I understand that—we have to have strong international institutions in order to make sure that this kind of assistance gets through to where we would like it to go. The concern has always been that when people give money in good faith to different charities or organisations or see their Government do that as well we must make sure that the money goes to where those receiving the money say it will go and that a ticket is not clipped along the way. 
That point reinforces why this multilateral agreement is needed. We are very late in joining it. It will be 20 years next April since it came into force and New Zealand is the only OECD country that has not joined it yet. We are not part of the international mainstream in that regard which is surprising seeing that we are normally very much in support of multilateral institutions and a rules-based system—and for a small country we need to be. That is why we support so strongly the World Trade Organization and why we have looked for UN resolutions before committing ourselves to armed conflict or to armed situations. So we have very much approached our foreign policy and our development policy by looking for strong international institutions to make sure proper effect is given to what the intention of the New Zealand Government has to be. 
Our signing this treaty and passing this legislation which makes us part of this last part of the World Bank Group—the institutions that make up the World Bank—gives New Zealand a much more sure footing when we are contributing in these areas. It was interesting to note that a number of countries in our region are already part of the Multilateral Investment Guarantee Agency. Countries from the Pacific region like Papua New Guinea Fiji Samoa the Solomon Islands Palau and Vanuatu are already coming into that agency. As we go through Asia we see other countries that are part of it as well. 
So we have kind of been out of step institutionally although clearly we have not been out of step in terms of policy given the way we have behaved in the international community and the way we have tried to play our part and bring a little bit of relief where that has been needed at times—including quite recently with the big earthquake that happened in the Solomons where we put an initial sum of money of about half a million dollars. We went up to the Solomons to try to give some initial relief until we work out presumably a package of assistance there. 
The Solomons earthquake was a good example of the fact that world attention is sometimes focused in other areas. Sometimes there is a world catastrophe or disaster and that is the issue of the moment—everyone is focusing on it looking at it and keen to support it and people rally around behind it. Yet at other times when these things happen people almost turn a blind eye to it. The Solomons earthquake happened at around Easter time when people were busy getting ready to go away and for some reason it did not enter the consciousness in the same way that some of these other tragic events can. Obviously the Boxing Day tsunami happened during a very quiet period and everyone was immediately focused on that. 
One wants to see whether the world can come together in order to ensure that all the goodwill is there and with the way people dig into their own pockets that will always happen. We know that it will happen over time but we want to make sure that the investments are being made properly because there is always the suspicion that when people give money what is meant to go east goes west. That has long been a suspicion in this area so having these strong institutions that have integrity and respect is important. 
I pick up on the comments made by the Minister of Finance in moving the first reading tonight. The treaty we are looking to sign—and by passing this bill are giving effect to—puts us in the last of the institutions that make up the World Bank. Having the World Bank as a reputable institution is very very important and the New Zealand Government has expressed this concern. 
The allegations of impropriety or of a conflict of interest in the actions of the President of the World Bank Mr Wolfowitz in seeking to find employment for his partner when he became the president has left a number of questions being asked in that institution. A lot of the staff who work in that area and have to go into countries and be seen as being beyond reproach feel that it is a difficulty for them if there are any suggestions hanging over activities at the World Bank. So although presumably the president of the World Bank was acting in good faith because his partner was already working at the World Bank—he suddenly got appointed and she could not work there any more so obviously that problem was not of her making—the actions he took by trying to get her a job at the State Department at a higher rate of authority and at a higher rate of pay than she had at the World Bank has led to a bit of a collapse of confidence in his ability. 
So I can see the problem there when the World Bank has to be seen as one of the institutions that can go in negotiate and set up a framework to channel all these large numbers of donations that come in. New Zealand approaches that problem by saying that now the position has probably become untenable. 
I comment on that because by giving effect to this legislation New Zealand now has the ability to chair the World Bank annual meeting—the group of World Bank institutions—which we have been unable to do until now. The convention came in 20 years ago and many countries have signed up to it. In fact as I said before we are the only OECD country that has not done so. So in a role where New Zealand can often be seen as being a third player and as being able to bring sides together this is an example where New Zealand cannot get to that top seat of one of the key arms of the architecture of world diplomacy in the infrastructure of global institutions because we have not passed this law. That is why it is pleasing to hear that there will probably be pretty broad political support for the bill tonight. 
I will pick up on just one comment that the New Zealand First speaker Doug Woolerton made. He went to the heart of what the problem often is around international aid. We all know that there is this global target of trying to get rich modern economies to spend 0.7 percent of their GDP on overseas aid. That is one of those things that one can agree to readily because it sounds like a good idea. But when one’s economy is growing it is actually a very very hard target to get to. 
The Hon Marian Hobbs the former development assistance Minister who spoke before worked in this area. It was under Marian Hobbs’ watch that we were able to get New Zealand’s contribution up to 0.27 percent—so we got the “7” part right just with a decimal place removed. But we still have further to go and I know that the Minister of Foreign Affairs the Rt Hon Winston Peters has put a lot of effort into this area and a lot of commitment into overseas aid particularly around the Pacific. 
Doug Woolerton was saying—and he was right—that sometimes constituents come and see members and they have seen how much has been given to a certain country because hard times have fallen on it. A constituent who wants to see the member because he or she cannot get X Y or Z or because he or she would like to see such and such funded says: “Here you are spraying money out around the world.” It is a really difficult thing because there are so many things in New Zealand that one would like to see money spent on. I guess the point one has to make about overseas aid is to ask those people whether they would rather trade places. 
OK not everything in New Zealand is perfect. A lot of working families struggle to get by—which is why the tax credits are so important. People do not feel rich yet they see this money being given out overseas and they wonder why they cannot get any of it. But we have to ask people whether they would trade places. That is where we really have to try to go to the common humanity of where people are around the world. 
It is very interesting that members of the public who have travelled to Third World countries and to very poor countries never come home and say that New Zealand should give less in aid. People who go into poverty-stricken countries and see how poverty and corruption is destroying people’s chance of a fair go at life always believe we should be trying to do the best we can in terms of contributing. That can seem like a hard thing to accept for people who are working in a low-paid job and it is difficult to make ends meet and they would wonder why we would do that. 
But what is important if we can get New Zealanders to give more individually and if we can encourage the Government to step up its contribution from the current 0.27 percent is that we must ensure that the international framework exists and that the institutions are there to make sure the funding and money get through to the exact area where they are needed. By signing this agreement and by giving effect to it by passing this legislation I am sure we can move on to ensure that New Zealand’s reputation as a country that is committed to being a good international citizen can only be enhanced and that will be promoted by our passing the first reading of this bill. Thank you Mr Deputy Speaker.