Clark David: International Finance Agreements Amendment Bill — First ReadingText is incorporated into the Bound VolumeClark David: International Finance Agreements Amendment Bill — First Reading[Sitting date: 15 September 2015. Volume:708;Page:6611. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): We on this side of the House from the Labour Party have indicated that we will be supporting this bill. Markets are powerful institutions. They make excellent servants and terrifying masters. Of course the open flow of capital has beneficial effects where countries benefit from trade but it can also have detrimental effects when markets are exposed and when some countries struggle to compete where they have not found their comparative advantage and maximised that benefit. We need strong international institutions in order to encourage the kind of trade from which we will all benefit.We are a global society and increasingly all of our futures are intertwined. This region is no different. When China sneezes the US stock markets catch a cold and so our future prosperity is dependent on our neighbours doing well and on us doing well also. That prosperity in our region has effects in terms of security liberty and peace. Prosperity itself creates the conditions for strengthening and maintaining the rule of law. It is a virtuous cycle that of course is then a key plank in prosperity itself.I think that the path to reducing inequalities is part of creating a more prosperous society. We know that societies with low inequalities have higher social mobility and in those societies there is less suspicion that the rule of law is there to protect the interests of a favoured few and so there is less likely to be civil unrest in countries with lower inequalities and higher social mobility. We in New Zealand have a part to play in creating a world with strong institutions that support those countries that are struggling in the global economy both to introduce prosperity and from that—and really the more important thing—to create countries that people would want to live in which have security liberty and peace.The prosperity of nations is built on the infrastructure that everyone needs but very few people can afford on their own. When I say this I am thinking of things like hospitals schools clean running water roads police forces and courts that are beyond corruption. The principle of fair and equitable access to those institutions and to that infrastructure is critical to social justice and also to the success economically of nations. So here we have the Asian Infrastructure Investment Bankwhich is going to contribute a little bit to that picture through investing in infrastructure in developing economies. These institutions that provide the reasonable financial stability that nations need ensure that the opportunities for growth that free capital flows bring are more likely to be grasped and also I guess they give the confidence that when economies are open not just will they have the opportunity for the growth but they will be somewhat protected from the downsides of globalisation and those effects will be mitigated against.This legislation and this investment bank the Asian Infrastructure Investment Bank are not without risks. We read in the report that has been adapted from the negotiators meeting the report of the Foreign Affairs Defence and Trade Committee that there are many risks ahead and some of them are of course risks that any new institution like this might face. There is a learning process with any new institution. People have to find their roles. Countries have to find their roles within this. Those risks though should not stop us wanting to support something that is genuinely good for the world that we hope will reduce inequality and that will begin to address the problems of climate change and other environmental and social impacts.Some of these things are listed in the paper and they very clearly outline the risks and the kinds of things that they would want to achieve with the bank: “The environmental and social safeguards draft policy outlines an approach to (i) identifying and managing environmental and social risks (ii) the formulation and implementation of environment and social management plans for each AIIB operation and (iii) ongoing monitoring and post-project evaluation.”—these are all things that of course we would wish to support—“The policy covers biodiversity sustainable land use climate change and greenhouse gas emissions; gender working conditions community health and safety; and child labour and forced labour.”These are all things that we would like to see progress on not just in our own country but across the Asia region and we recognise that with that stability with the implementation of those ideals comes prosperity not just for those countries but also for neighbouring countries. We all benefit from having a safer fairer world where all have access to justice where all feel they have a stake and can make a contribution and where people do not feel excluded from participating in the economy and from justice. So Labour supports this legislation that will enable the Government to become a member of the Asian Infrastructure Investment Bank and we are pleased that the Government is taking these steps.There is of course a somewhat comical aspect to this in that various members of the House—not comical; I use that word kind of reluctantly because it would be comical were it not so serious. The Future Investment Fund we are told is where this money is coming from but that is money that has already been spent on a variety of other projects by this Government. We know this fund is a mythical pot of money that the Government has created. First it was going to pay down huge amounts of debt from it but we find that this Government has borrowed more money than the Government of Muldoon. It is now $100 billion in debt and that debt has been growing year by year. This is a Government that has continued to borrow and yet it said initially that this Future Investment Fund would be used to pay down debt.Well I return to the point which is that we are told that this contribution that we are making—this $92 million to the bank—will be paid for out of the Future Investment Fund and I am questioning whether that is indeed possible given that this fund has been spent on so many different things including the roof of the Beehive building. The roof of the Beehive building has come out of that. We were told it was going to be used for schools and hospitals and other infrastructure that would help our prosperity in the future but it has also paid for compliance for tax legislation and for repairs to Te Papa and to fund the census and to fund—I mean for goodness’ sake! These are the things coming out of this Future Investment Fund. It has been spent many times over and my colleagues have drawn attention to this.Dr Megan Woods: Magic money.Dr DAVID CLARK: It is magic money that can be spent again. David Parker listed the likes of Kiwibank receiving funding from it Chris Finlayson buying memorials out of it and Auckland transport and the Canterbury rebuild—you name it the Future Investment Fund has been labelled as the source of this magic money.So here we have a $92 million contribution. We in the Labour Party think that this is a useful thing to be investing in. We need stronger financial institutions in the world. If we are all going to capture the benefits of flows of capital we need to have the kinds of strong institutions that give countries confidence to participate in global markets—that give them the confidence that there is some level of security that should their economies stumble there will be investment in the kind of infrastructure that builds economies over time. We will be supporting this bill and we want to see stronger international institutions to support economies in the interests of prosperity and the interests of fairness and in the interests of creating a better world.