Parker David: International Finance Agreements Amendment Bill — First ReadingText is incorporated into the Bound VolumeParker David: International Finance Agreements Amendment Bill — First Reading[Sitting date: 15 September 2015. Volume:708;Page:6600. Text is incorporated into the Bound Volume.]Hon DAVID PARKER (Labour): I rise to take a call in respect of the legislation to give effect to New Zealand’s participation in the Asian Infrastructure Investment Bank which it does by way of amending the International Finance Agreements Act to make provision for this new international development bank to sit alongside some of the other banks that New Zealand participates in including the likes of the IMF and the World Bank.I begin by thanking the Chinese Government and the people of China whose resources lie behind this bank. Without their contribution this would not be happening. I know that there was some initial opposition to the formation of this bank from the United States and from some other countries that perhaps were a little threatened by the rise of China and did not want to see it being given recognition by the creation of this Asian Infrastructure Investment Bank which is so clearly tied to its fortunes and to its rise in the world. I thank the National Government for its steps to bring this to fruition because I think that it has made the right call that we should be involved and we should be celebrating this as a good thing in the world rather than seeing it as a bad thing.I think that in addition to the trade benefits which have been emphasised by other members I would emphasise some of the non-economic or indirect economic benefits that will flow from this. I want people to be lifted out of poverty. I think that we are a better world if people can have decent standards of living in their own countries and the secure civil settings that that brings about. If we are going to avoid conflagrations where we have civil wars and the movement of millions of people—refugees—caused by war and lack of economic prospect in their home country then we actually need to lift the people in poorer countries so that their circumstance at home is better. That is a good thing to do for them and it is actually a good thing for us to do not just economically. I do not want to emphasise so much the economic benefits for us; I want us to do this because it is the right thing to do for the world and I think it is. I think of the history of the World Bank and the IMF both of which have made mistakes over time—but overall these have been institutions that have made the world a better place than it would otherwise be.I agree with the previous speaker Dr Reti that it is good that New Zealand has been influential in this from the start and that we have tried to imbue some of our standards as to what we think will make the world a better place by as Dr Reti has said trying to get environmental impacts of new infrastructure developments to be taken into account. There was a period I think when international organisations funded infrastructure improvements without much regard to the environmental consequence—when taking those environmental consequences into account has a better long-term outcome.The other thing I want to talk about is that I think it is very important that this Asian Infrastructure Investment Bank stands against corruptionfrom the start. I have some hope in that regard from the fact that the Chinese Government itself is pushing against some of the corrupt practices that it has discovered in its own country and that it dislikes. I would hope that the systems that the Asian Infrastructure Investment Bank implements from its first day push against corruption in these developing countries against the private profiteering by politicians out of large infrastructure projects against kickbacks and against improper practice in its contracts. And if they do then the Asian Infrastructure Investment Bank will not just have the benefit in respect of the individual project; it will actually be lifting the standards of conduct in these developing countries to their benefit and again to our wider benefit because they will be better countries as a consequence and we will live in a better world.In terms of the small percentage that we make to the capital the same thing has to be said here as was said in recent amendments I think it was last year or the year before to the IMF rules under the international finance agreements legislation that we have in New Zealand—that is that New Zealand’s contribution to these organisations keeps dropping as a percentage because we are not growing as fast as other parts of the world. That is due in part to developing countries catching up but in part it is because our record of economic development and growth in this country is not as good as it should be. We are funding through this new bank infrastructure projects that will lift economic performance in other countries and that is a good thing but it has to be noted that in respect of New Zealand’s economic performance our exports are dropping.Perhaps we should pay some more attention to the recommendations of other international bodies like the OECD and the IMF which have given instruction to New Zealand as to how we could improve our economy and lift exports. Instead exports are going backwards as a percentage of our economy. They have dropped from 30 percent to 28 percent of GDP in the last 7 years and they are still dropping. The Government’s ambition was to lift them from 30 percent to 40 percent of GDP.I want to turn to an issue that Grant Robertson raised which was the funding of this out of the Future Investment Fund. Has not this fund turned into being the pot into which you dip in order to fund everything? We had the list that Grant Robertson started—listing the census and the Beehive roof. I went back and looked at some of the other things that they said they are going to do. Bill English initially said that they were going to pay down debt from the fund. Well how did that go? Well actually debt under this Government has gone up by $60 billion despite having inherited zero net debt from the outgoing Labour Government which had also reduced gross debt from 40 percent to 18 percent of GDP. This Government has increased both measures by about $60 billion. It was going to fund schools and hospitals—that was what John Key said. That was going to be the main reason for this fund.Well what has it done since? Nathan Guy said it was going to fund irrigation projects out of it—a terrible thing to do anyway because it is effectively a transfer of wealth from taxpayers to landowners. But putting that aside it was going to do it out of the Future Investment Fund. Gerry Brownlee said it was going to rebuild Christchurch. Gerry Brownlee also said it was going to fund Auckland transport projects out of it. Then Mr Joyce wanted to get in the news and so he said they would fund some of the recapitalisation of KiwiRail out of it. Then Bill English wanted to recapitalise Kiwibank. Guess where that came from? The same Future Investment Fund. Then Chris Finlayson wanted to be involved in the Wellington war memorial—that was the part that he propped up. Then Tony Ryall as the then Minister for State Owned Enterprises shot some money into Solid Energy or said he was going to from that fund.This really has been a grab bag of things and the Future Investment Fund has not been used to add to the productivity of New Zealand. As a consequence of course of the sell down of those State-owned enterprises taxpayers have lost control of what I think are pretty important assets over time. They have also forgone the dividends and the future profits from those companies in a way that is always going to be to the long-term cost to taxpayers because of course the return on those sorts of investments always exceeds the Crown cost of capital and therefore it would never have made sense from a point of view of the deficit and it was not necessary in terms of the Government’s balance sheet.Returning to the objectives of the Asian Infrastructure Investment Bank can I thank the Finance and Expenditure Committee for its report on the treaty which has led to this legislation. Lastly in terms of process if there is to be a motion to put this to the Finance and Expenditure Committee for a truncated process I do not understand why. Just let the committee do it as quickly as it can and report it back and trust the committee to do its business wisely and quickly. Do not create an artificially short process that will require us to vote against that part of the process.