I rise to oppose the Asian Infrastructure Investment Bank Bill 2015. The main purpose of this bill is to facilitate Australia becoming a founding and substantial financial member of the Australian Infrastructure Investment Bank.
The title of his bank and legislation is fundamentally misleading. It is not Asia that has established his bank; it is China. China announced its intention to establish the bank in October 2013 and is driving this project. If China had chosen not to project its economic power into Asia and the South Pacific through the establishment of this bank, this debate would not be happening today in our parliament. Upfront, if we are to be honest, it should be called the 'China and Other Countries Infrastructure Investment bank', not the Asian Infrastructure Investment Bank.
There are many reasons not to agree to this legislation, but before I detail the most common found in our media I would like to make this point: this financial organisation will be controlled and heavily influenced by the communist government of China.
The Parliamentary Library report states: To illustrate the disparity in voting power, China, the largest AIIB shareholder will have 297,804 Share Votes while the Maldives will have just 72 Share Votes. A weighted voting system ensures decision-making reflects the relative size of a country’s capital contribution. However, it potentially creates a longer-term challenge because of the need to ensure the distribution of power within the organisation keeps pace with shifts in relative economic power. In multilateral organisations, representation and voice can be strongly linked to perceptions of legitimacy and effectiveness. As China will have over a quarter of the votes, under the AIIB’s Articles of Agreement it will have an effective veto over issues requiring a ‘super majority’, defined as 75 per cent of votes and two-thirds of all member countries. The types of issues requiring a super majority include selecting the President, increasing the capital stock of the AIIB and changing the size and composition of the Board of Directors. However, this is not without precedent. The United States is the only country to have a veto over major governance decisions at the IMF and World Bank.
No serious financial expert or commentator will ever say you can trust any financial figures that emerge from the government of China. Because of a lack of transparency and basic integrity, all financial figures and reports that are created by the Chinese government are viewed by every free-world Western economy and every Australian peak body representing Australian business as suspect and to be taken with a grain of salt.
Just like the Chinese free trade agreement, we are making the mistake of entering into a deal with an organisation that is not like any private sector entity in the Western world—because it is not a private sector entity with the same rigorous, trustworthy reporting mechanisms. This bank will be an arm of the Chinese communist government just like its military, whose purpose will be to protect, expand and spread the influence of communist, not democratic, culture.
The influence of the Chinese government is being felt in this parliament today through at least $5.5 million in political donations from people linked to the Chinese government, so it is little wonder that there will be little or no resistance to this legislation which the Australian bankers are all supporting. The Australian banking industry is another group of people who have considerable influence in this parliament due to the amount of political donations they give to political parties and the people who have come from the banking industry and now occupy high positions of authority in our political system. It is not just me who has expressed grave concerns about the establishment of the 'China and Other Countries Bank' and participation in it.
Some very respected people and sources have raised serious concerns, which the Australian government is now ignoring by entering into this deal. From Huey Fern Tay, the ABC journalist based in Beijing: China is the biggest shareholder at 30%, Australia is 6th largest with 4.9% voting power—putting us at a great disadvantage. And: Japan and US refuse to join—why? Well the AIIB doubles up on the World Bank and Asia Development Bank. There are still doubts surrounding the AIIB's transparency and governance standards, even though Australia waited for those to be improved before joining.
ABC business reporter Stephen Letts writes that the Asian Infrastructure Investment Bank is: … self-serving as China hopes the AIIB will be a better way to deploy its massive foreign exchange reserves, which are earning almost nothing in the US Treasury bonds.
From The Economist we read: … China will use the new bank to expand its influence at the expense of America and Japan, Asia's established powers. China's decision to fund a new multilateral bank rather than give more to existing ones reflects its exasperation with the glacial pace of global economic governance reform.
Yun Sun, writing in The Diplomat, has said that China has capital share of 30 per cent and voting rights of 26.06 per cent and: … will have veto power on issues that require a supermajority vote, such as the board, the president, the capital, as well as the major operational and financial policies. Retention of a veto reflects China's determination to retain control on key aspects of the bank.
Most Australians will remember the surprise visit of a flotilla of three Chinese warships which sailed past our territorial waters and Christmas Island in February 2014 on a military exercise that included combat simulations. The media report of the incident said: Never before has a Chinese naval drill come so close to Australia. … … … This month's exercise took the theory a good step closer to reality, bringing China's bold ambitions virtually to Australia's doorstep. In doing so, it has crystallised the challenge facing our military planners in preparing for a very different world.
On the subject of China's military might, I think of its recent parade. While our military planners are preparing for a very different world because of the rapid increase in Chinese military might and the willingness of the Chinese government to use that might, it appears that the Liberal and National Party leaders and members of this parliament, with their calls to rush into a free trade agreement with China and this legislation, have not prepared for a very different world. Australia's purchase of hundreds of billions of dollars of sophisticated military hardware—F35 fighter jets and submarines—is because of the very real military threat the Chinese communist government poses to our nation and our allies. This is a simple statement of fact not, as some would have you believe, a xenophobic rant.
Most Australians would be shocked to learn of the size of the donations to our major political parties by people who have links—most likely strong links—to the Chinese communist government. Especially in the light of the approval of the Chinese government state owned Shenhua mine, the question must be asked and answered: what political influence does this money—$5.5 million—buy?
This government wants the Australian people to rush into both a banking deal and trade deal with a country which recently put on a parade which The Economist magazine described as: 'a show of military muscle in Beijing to upset Asian neighbours'. Indeed, so aggressive was the display of Chinese military might this year that every western government chose not to send their leaders to a ceremony whose primary purpose was to celebrate victory over the imperialist Japanese forces and fascism. This was a conflict on mainland China in World War II which killed 35 million Chinese and tied up 600,000 Japanese troops, a feat of resistance by the Chinese people which most likely prevented the invasion of Australia. Tuesday, 15 September 2015 THE SENATE 14 CHAMBER
This government has had a very mixed approached to China. Our previous Prime Minister, Mr Abbott, boycotted China's most important cultural event in six years because of fears about China's military aggression and expansionism, while his party urges this Senate to support legislation like the China free trade agreement which undermines our nation's sovereignty—and I refer to the investor state dispute settlement provisions which allow the Chinese government to sue our government if we pass legislation thought this house which the Chinese believe harms their commercial interests. The government's own figures reveal that Chinese investment in Australia in the last 10 years has increased —without a China infrastructure bank or a free trade deal—by a factor of 10. It has risen from $3 billion to $32 billion.
The average Australian would like to know where the Chinese money has been spent. How many Australian jobs have been created and where are they? Before we enter into this deal and others there needs to be more comprehensive community discussion that engages ordinary Australians, not just the elite, from both sides of the political divide. Media reports indicate that the American President has stopped using a famous hotel chain because of espionage fears after the hotel chain was bought by people linked to the Chinese government.
Are we going to call the American President xenophobic because his administration is taking precautions and is vigilant about Chinese espionage and other forms of cultural and industrial attacks on western values of democracy and liberty? In the national interests of Australia I oppose this legislation and course of action. There are better ways of conducting business with China which respect our democratic values and our rule of law and guard our children's liberty and freedoms.