Okeroa Mahara: International Finance Agreements Amendment Bill — Third Reading 
Okeroa Mahara: International Finance Agreements Amendment Bill — Third Reading 
[Volume:642;Page:11891] 
Hon MAHARA OKEROA (Minister of State) 
 on behalf of the 
 Minister of Finance 
: I move  
That the International Finance Agreements Amendment Bill be now read a third time 
. This bill which will amend the International Finance Agreements Act 1961 has been thoroughly considered. It has been subject to a national-interest analysis by the Finance and Expenditure Committee. The bill was examined before the second reading by the Foreign Affairs Defence and Trade Committee which recommended that it be passed with no amendments. 
First I would like to thank the House for its support of this bill and for allowing its rapid passage. As noted in the second reading debate the International Finance Agreements Act allows New Zealand to belong to and to meet its obligations as a member of various multilateral financial institutions including the IMF and the International Bank for Reconstruction and Development. The passage of this bill is the next step towards New Zealand becoming a member of the Multilateral Investment Guarantee Agency—or MIGA—which is the final agency within the World Bank Group to which New Zealand does not belong. New Zealand first became a party to the Multilateral Investment Guarantee Agency convention in Seoul on 6 September 2005. 
The national-interest analysis concluded that it was in New Zealand’s interest to join the Multilateral Investment Guarantee Agency as its services are well aligned with our broader development interests and to a lesser extent with our foreign policy interests. The analysis also noted that the assessment of whether New Zealand should join the Multilateral Investment Guarantee Agency was based on three broad categories: firstly supporting multilateral organisations; secondly contributing to development goals; and thirdly supporting the New Zealand private sector. 
Multilateral forums or agencies such as the World Bank are an important part of the international architecture and are an important way in which New Zealand may influence our external environment. In this way the goals of the Multilateral Investment Guarantee Agency are aligned with New Zealand’s aid and development goals. Further the subscription to the agency is able to count towards the Government’s goal of achieving aid contribution equal to 0.35 percent of gross national income. The Multilateral Investment Guarantee Agency provides specifically targeted insurance products which seek to mobilise private sector resources in order to help address stark development challenges such as the development of infrastructure or the creation of jobs. It also provides political and foreign risk insurance for equity investments into frontier underdeveloped markets which often may be affected by war or civil dispute. 
National has observed that this reduces the costs of capital for private sector firms aiming to invest in developing markets. But it is also about helping firms handle uncertainty and find their feet in foreign and challenging markets by leveraging off the World Bank’s knowledge of conditions on the ground. I note that the agency’s most recent guarantee has encouraged $85 million of investment into Afghanistan to improve telecommunications. 
Assuming that the International Finance Agreements Amendment Bill is passed New Zealand will be required to deposit a copy of the Act with the World Bank. New Zealand will then be required to pay a subscription fee. The subscription that will be involved is the purchase of one of 513 shares at a cost of approximately US$5.5 million—10 percent is in cash and 10 percent is via a promissory note. The remaining US$4.4 million will be subject to call by the Multilateral Investment Guarantee Agency. The fund is unlikely to be called upon as a call would require the agreement of all shareholders. Thank you Mr Deputy Speaker.