Robertson Grant: International Finance Agreements Amendment Bill — First ReadingText is incorporated into the Bound VolumeRobertson Grant: International Finance Agreements Amendment Bill — First Reading[Sitting date: 15 September 2015. Volume:708;Page:6597. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): I rise on behalf of the Labour Party to indicate our support for the first reading of this bill. When announcements were made earlier in the year that the Government was firstly signing up as a foundation member and then secondly to contribute money we supported that on the grounds that essentially this bank is going to happen it is going to be established it is going to become a very important player in our region and it is something that as New Zealand looks to expand opportunities for our involvement and our development with the wider Asian region we should be a part of.It was quite clear in the Minister of Finance’s speech that he has just given that he expressed some of the surprise that others did at the pace at which developments have occurred with the establishment of the Asian Infrastructure Investment Bank. I want to say that that is the small note of caution that I would like to sound. I think when the select committee has some time to go through the bill one of the things we would want it to do is to look closely at those governance arrangements and the way in which safeguards have been included within the establishment of the bank because of that particular reason—the pace—but also because this is unchartered territory for an initiative led by the Chinese Government.The Minister himself used the language very early on when this was being debated that some commentators had seen this as some kind of expanded Chinese State-owned enterprise. He was reflecting the concerns of countries that that is what we were facing up to. It is quite clear in the development since that time that that concern has significantly reduced but it is vitally important that the governance arrangements that are built around this bank have the level of transparency and the level of accountability that we would expect from a multilateral institution like this. I have got confidence in the likes of John Whitehead and others to have involved us in an agreement only if they felt that that was possible. But that is the job of the select committee—to ensure that we have those safeguards in place and that we are confident about the governance issues.What I can say in terms of what this will mean for the coherence of infrastructure development across the Asia region is that this can only be positive. I think anyone who has spent time in the Asia-Pacific region and who has seen the more ad hoc style of infrastructure development that can take place can see how that can cause some problems if a large country—and it often is China but it can be other countries—finds its way into the Asia-Pacific region and supports a particular one-off project. That is not always the most effective or efficient way of ensuring that that infrastructure dollar is well spent.When we look at what lies behind the Asian Infrastructure Investment Bank we can see that it is indeed an attempt to create a very coherent form of infrastructure development right through those Asian nations that the Minister mentioned in his speech. So I think that will be an extremely positive development out of the establishment of the bank if we can get that kind of coherence into what is clearly a rapidly growing region but one where there are significant infrastructure gaps.The World Bank and the Asian Development Bank have certainly in the initial stages of this idea being floated been very critical of the idea that a separate mechanism was required. Anyone who has spent any time in the Asia region will hear from Governments there their criticisms of the World Bank and the IMF and that they do not believe that they are sufficiently focused or have sufficient knowledge of the Asian region to be able to give the leadership in infrastructure development that a bank focused on and based inside the Asian region would be able to do.The World Bank has said that a further trillion dollars annually is needed to support economic growth in the region. That is a massive sum of money to be able to find. So the arrival of a domestically or a regionally located bank like this will clearly be an important element in getting towards reaching some of those growth goals.New Zealand already benefits from expanding growth across the Asian region; it is vital to our future success and the development of infrastructure is equally vital in that context as well. We believe New Zealand does need a seat at the table when these kinds of initiatives begin and we do believe that the bank is likely to become a very influential institution across the Asian continent. By being there now we are best placed to exert some influence over the direction work and governance of the bank.It is important to note that New Zealand’s contribution over the next 5 years will be a fairly modest $126 million with a possible further commitment of $504 million of callable capital. This is a large investment in terms of just raw dollar figures but across the many billions of dollars required in the region it is quite small. We do think that there are significant benefits in terms of increased economic development in the Asian region in supporting that economic integration as I mentioned before and in augmenting New Zealand’s other relationships that it has in the Asian region. We are not as represented as we could be in some of the places where the bank will be doing its work.This offers a way in for New Zealand being a part of the development of those countries. Particularly we think it will if done well improve the operational standards and the safeguards around infrastructure development by having a more coherent process. Clearly it builds on our very good and strong relationship with China. Some commentators have likened this to being the fifth first with New Zealand there. Anyone who has been to China will have been part of a speech talking about the four firsts—Mr Goff has certainly given plenty of those. He was there for most of them. But New Zealand has always been at the forefront of recognising China as a market economy of supporting its involvement in multilateral institutions like the World Trade Organization beginning negotiations for a free-trade agreement and then eventually being the first country to settle a free-trade agreement with China. They were the four firsts. Some people see New Zealand’s early involvement with the bank as a fifth first. That can only be positive for developing our relationships in China.We do support this legislation but I do want to note the very odd way in which the Government has chosen to finance its contribution into the fund. It has done that through the Future Investment Fund. The Future Investment Fund is a well-used mechanism by the Government when it wants to find some money. It was as people will recall the fund that was to be created by the sale of State assets. Around $4 billion ended up in it. I will not go into how the fund did not end up being what it was going to be but $4 billion ended up in it.We have sat in this House year after year and seen Government Ministers stand up and tell us that things will be funded out of the Future Investment Fund. It was not surprising when we came to the Budget this year to discover that the Future Investment Fund is now oversubscribed. So with all the commitments that the Government has made for the things that it originally said the Future Investment Fund would be used for—education and health specifically and building that infrastructure here in New Zealand—there is still outstanding hundreds of millions of dollars that have not yet been spent. Yet the Government seems to be able to find the room in this case to find $125 million to go and spend on the bank.By all means be part of this but that is not what the Future Investment Fund was meant to be for. The Future Investment Fund was quite clearly designed to be spent on things like education building schools and building hospitals here in New Zealand. It was always an illusion. It was an accounting trick by the Government and it has the gall to come to this House and say: “Here we are; we’re going to fund New Zealand’s contribution to this very worthy initiative by raiding the Future Investment Fund which we’ve already overspent.” It is not without irony for people who are sitting in the regions of New Zealand and wanting an infrastructure boost and wanting to see some roads developed perhaps for the forestry sector on the East Coast or maybe for the Ōpōtiki wharf. They are saying: “Wouldn’t it be good to get some of the Future Investment Fund into our infrastructure.” We can understand that people would see it as somewhat ironic to be using that fund.It is a track record that the Government should not be proud of. It managed to spend $6 million fixing the roof of the Beehive. That was apparently worthy of the Future Investment Fund. It spent $8 million on the census. That also came from the Future Investment Fund. This is not the health and education infrastructure that New Zealanders were promised would come out of the Future Investment Fund. So I think it is pretty disingenuous of the Government to claim that it can keep on raiding that fund which is already overcommitted when it has not been able to follow through on the education and health funding that was meant to occur.So we now see the Government being about $364 million short of the spending on schools it promised under the Future Investment Fund and about $316 million short on health funding. The Government has failed to find the funding that was needed for that yet it still tries to pretend that this is where the funding will come from for this particular initiative. So we would be interested in looking into that as we go through this in the select committee process just to see exactly where this funding is coming from because quite frankly I do not believe it.Mr Deputy Speaker I just want to finish—because I know you will sit me down in a moment—on the slightly odd motion that the Minister moved at the start of his speech on having a truncated select committee process. I certainly appreciate the need to get this done by the end of the year but we would be asking why the Government is so disorganised that it has to keep coming to the House with such motions.