Cunliffe David: International Finance Agreements Amendment Bill — In CommitteeText is incorporated into the Bound VolumeCunliffe David: International Finance Agreements Amendment Bill — In Committee[Sitting date: 10 November 2015. Volume:710;Page:7820. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn): Thank you Mr Chairman I do appreciate your indulgence—just to wrap up a couple of technical points in respect of the articles of agreement. Article 31(2) states: “The Bank its President officers and staff shall not interfere in the political affairs of any member nor shall they be influenced in their decisions by the political character of the member concerned. Only economic considerations shall be relevant to their decisions. Such considerations shall be weighted impartially in order to achieve and carry out the purpose and functions of the Bank.”I really would like the Minister in the chair Michael Woodhouse to share with the Committee some examples of the policies that the New Zealand Government would be expecting to see implemented under that all-important provision because for those particularly in the western hemisphere who have alleged that this new institution would be in some way a tool of creeping political influence this safeguard would seem to weigh against that in a healthy and constructive way—but of course it is only as good as its implementation. So Minister if I could turn your attention to that very important clause in the articles of agreement clause 2 of article 31 how will we know—how will the New Zealand governor know—whether that has been implemented in practice and how will it service any concerns that might subsequently take place?There is a range of technical articles going on in chapter VII; in chapter VIII around suspension and termination of operations of the bank; in chapter IX around status immunities privileges and exemptions; in chapter X on various interpretive sections; and then in chapter XI on signature and deposit and ratification and enforcement provisions. Schedule A—the schedule to the schedule—commences on page 30 and then it sets out New Zealand’s relative number of shares which I think is interesting for us all to see—4615 shares being US$461.5 million. That raises a very important point because of course earlier in this debate the House had been tossing around the number US$92 million which converts to approximately NZ$140 million. Here we see that the actual liability is US$461 million which is closer of course to 600 and something or—I have not got a calculator—NZ$700 million. As they say in the language of governance it is a non-trivial amount of liability.It is instructive I think that that comes from the Future Investment Fund a fund of some $16 billion one-twentieth of which approximately would be covered by this liability or fully funded from it. That is a very significant proportion of the funds raised by the Government’s so-called mixed-ownership model asset sales programme the proceeds of which were repeatedly stated to be for the development of New Zealand infrastructure and New Zealand health education and social services. If this—and it is a significant proportion of it; close to one-twentieth of it—is instead to be allocated to the underwrite of the Asian Infrastructure Investment Bank then we need to know exactly what benefits will flow to New Zealand.I would ask the Minister through the chair to comment on what estimates have been provided to the Government on the economic flows to New Zealand that pertain to this subscription. Will it be a measurable flow of procurement services to New Zealand service providers? Will New Zealand qualify for infrastructure projects within New Zealand using Asian Infrastructure Investment Bank funds? Mr Joyce in question time today was celebrating the Crown’s investment of NZ$3 million in a harbour project in the Eastern Bay of Plenty. Would that project which is designed in the first instance to service a marine farming project—I think it is called Eastern Sea Farms a large aquaculture project which I understand is around 50 percent owned by Chinese interests—qualify for Asian Infrastructure Investment Bank funding if the Government does not follow through on what it is quietly indicating may follow in time for the election which is the balance of I think the $29 million or $30 million required to make that project happen?That raises in turn the larger question of whether other infrastructure projects in New Zealand would qualify for Asian Investment Infrastructure Bank funding. The Government seems very reluctant to do major economic development regional infrastructure projects except perhaps some roads. But even those have been concentrated in semi-urban roads of national significance and regional roading has often been put on the back-burner as a result. So I think that is an important question.Will New Zealand get consulting or service-providing contracts from the procurement streams of this bank; if so do we have any idea how much? Will New Zealand service providers be eligible to provide infrastructure construction and expertise in third-party countries? Just for example some of our State-owned enterprises are best world practice I understand in geothermal technology. Will that qualify; if so what estimates have been made in our national interest analysis about the cash flow back to New Zealand? Because US$461 million of liability out of the Government’s Future Investment Fund—so-called—is a big chunk of change. What are we getting for it?That is not to say that Labour opposes the bill. We support the bill and I have taken some time to go through the articles of agreement to indicate provisions that we are by and large comfortable with and indeed New Zealand has materially contributed to. We are comforted with the proscription on political interference. We are comforted with the well-set-out transparency requirements and the layering of the role of the board of governors on which New Zealand will sit and the board of directors. But we ask exactly what level of transparency will be provided to the governors in terms of the operations of the bank as opposed to the board of directors on which it is less likely we will sit and what estimates have been provided to the cash-flow benefits to New Zealand.I have to say that once again the national interest analysis that was provided to the select committee was kindly put more qualitative—well-written but qualitative—than quantitative. That is there are no numbers in it. It says—and the Foreign Affairs Defence and Trade Committee has summarised—that “New Zealand’s economic future is linked to the Asia region” and therefore it is a good thing for us to participate. It is a very general argument and in this Committee stage debate drawing upon the articles of association I think it is incumbent on us to try to get into the detail of that so that we can see what attempt has been made by the Government to quantify those benefits.It talks about on page 3 of the Foreign Affairs Defence and Trade Committee report connectivity to the market beginning with the truism that “New Zealand is part of Asia”. Yes of course it is but that argument alone is not sufficient to justify our involvement in this. And it talks about our ability to influence but even the national interest analysis does not go into the point we have just made in these contributions that we sit on the board of governors but not necessarily the board of directors and that therefore there is a limitation on the influence that we can bring to bear.So on both the financial and the non-financial returns I would ask the Minister in the chair to take a brief call. What quantum has been provided to the Government in terms of financial returns to New Zealand service providers and what level of transparency pertains to the governors as opposed to the directors on the strategy direction and operations of the bank? Thank you.