Cunliffe David: International Finance Agreements Amendment Bill — Third ReadingText is incorporated into the Bound VolumeCunliffe David: International Finance Agreements Amendment Bill — Third Reading[Sitting date: 12 November 2015. Volume:710;Page:7992. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn): It is a pleasure to take a call in this third reading debate and to acknowledge the member who has just resumed his seat Jian Yang and the contributions of other members.The member makes a very good point: New Zealand is indeed the first Western country to sign up for this international bank as a founding member. New Zealand was also the first Western country to convey diplomatic recognition on the People’s Republic of China. We were the first Western country to welcome the admission of China into the World Trade Organization and we were the first Western country to have a free-trade agreement with the People’s Republic of China.Much of that was on the watch of Labour-led Governments. We mention that for two reasons. Firstly we underscore the ongoing contribution that Labour-led Governments have made to New Zealand’s foreign policy and its broad internationalist outlook. We are not a large country but we are a very constructive one. We are seen internationally as one of the least corrupt countries in the world deservedly; one of the easiest countries in the world to do business with; and a country—perhaps up until this week—that has had a long and internationally recognised commitment to human rights. I believe that is still intact despite some sullying from members opposite.I am proud to be a New Zealander and I am proud to be a member of the New Zealand Labour Party which has upheld over the decades the finest traditions of New Zealand’s independent but multilateral and constructive foreign policy. So here we are today where we are debating the International Finance Agreements Amendment Bill to set up this multilateral bank.The second reason that I mention New Zealand’s relationship with the People’s Republic of China is of course that China has been a very influential sponsor in the early stages of the development of the Asian Infrastructure Investment Bank. That is important because New Zealand had to make a decision: would we become an early participant in that process and encourage good governance in that bank or would we take the approach of some other Western countries and say: “No no. We want to stay solely within the other institutions.”—what they call Bretton Woods institutions: the Asia Development Bank the World Bank and the IMF? We chose the former course and I believe—and Labour believes—that that was the right approach to take. This is because a constructively engaged multilaterally disposed China is good for the region and it is good for the world. An isolated China on the other hand is less good.Let us turn to some of the arguments that have been raised in the various stages of this debate. One was the reluctance of our Western friends to initially support the bank. I think as my colleague David Parker said earlier those questions and tensions if you like have eased progressively during the set-up process of the bank not least because of the participation of senior New Zealand officials or former officials such as John Whitehead former Secretary to the Treasury in the design of the articles of association of the bank.In the Committee stage we all took some time to work through those and to recognise the contribution of officials in setting up a two-tier governance structure with a board of governors and a board of directors transparent powers and good governance processes. New Zealand joins the board of governors. We will have the right alongside other countries to appoint directors and we look forward to there being a healthy flow of transparent information to the board of governors so that we as a shareholder can ensure that we are continuing to participate in the national interest.I do want to acknowledge—and I do not think I have done this before—the contribution of our New Zealand First colleague Richard Prosser. I thought he described the controversy around the use of the Future Investment Fund pretty accurately. The $140 million initial contribution and the $450 million contingent liability are being underwritten by the Future Investment Fund which he quite rightly pointed out was the fund created when the half-share in New Zealand State-owned enterprises was sold down by the current Government. That was a fund that was clearly established for the development of alternative infrastructure in New Zealand—social infrastructure: schools hospitals roads etc. in New Zealand.I agree with the member that the Government has been fundamentally dishonest actually in taking those funds for a different purpose than the fund was clearly legislated for. That may even be subject to challenge but that is an issue for another day. New Zealand does not believe that is a sufficient reason to vote against the bill but we do join members alongside us in condemning the chicanery that has gone on by the misuse—and the multiple misuse—of the Future Investment Fund. I think the Government has committed it about 16 times over in various press releases so far this year.I turn briefly to note the Foreign Affairs Defence and Trade Committee report and the national interest analysis which are detached. I made the point in the Committee stage that that national interest analysis was pretty thin. It was a little bit on a wing and a prayer. Certainly there were no numbers on it.I would challenge officials as we bed in our participation to the bank to be very transparent in accounting for—both through the Ministry of Foreign Affairs and Trade New Zealand Trade and Enterprise and Statistics New Zealand—any indication of contractual flows that stem from our participation in this bank. In other words if New Zealand suppliers are getting bank contracts or consultancies it would be valuable for that to be recorded so that 5 years down the track we can look back and actually quantify what the value-add to New Zealand exporters from our participation was which would be alongside the more general value of the sustainable development of our region. We have both a general multilateral interest and a specific national export interest in participating in that region.The main benefits of New Zealand becoming a party to the bank therefore should include the increased economic development in the Asian region with flow-on benefits direct and indirect to New Zealand. The bank will support the economic integration of the Asian region it will augment New Zealand’s existing relationships and it will contribute to the implementation it is hoped of best-practice policies operational standards and economic and social safeguards in place alongside its infrastructure investment. It will reinforce our constructive longstanding and positive relationship with the People’s Republic of China while we also explore potentially new forms of relationship with other countries in the region and it could and should provide commercial opportunities for New Zealand firms which we are very keen to see quantified.Just to return if you like to the top of the analysis this proposal emanated from a perceived shortfall in commitment to infrastructure investment in the Asia-Pacific region by the Bretton Woods institutions—in particular the amount of funding available to the Asian Development Bank—and some arguments about its shareholding which was Japan-heavy and its governance.We are not in supporting this Asian Infrastructure Investment Bank denigrating the Asian Development Bank. We think there is room for both and we think the combination of both will recognise the growing importance of the Asia region to the world economy and to New Zealand.We have looked in detail at the governance arrangements set out in the articles of association we have recognised the role of New Zealand officials in bringing best-practice guidelines to that we have noted the advantages of being a founding governor of the bank through our founding shareholding and we have commended what it represents in terms of constructive engagement with the countries of our Asia-Pacific region.We have criticised the use of the Future Investment Fund and we have questioned the depth of the national interest analysis that went with this but overall in geostrategic terms we believe this to be a sensible prudent and long-sighted investment in the growing infrastructure and the growing political infrastructure of the Asia-Pacific region. We commend the bill to the House.