Building Australia's friendships with China and within our region - Terri Butler MP, Labor for Griffith

Building Australia's friendships with China and within our region

In this speech Terri remarked that "we can honour our treasured alliance with the United States and also be a friend to China." She also spoke about the China Australia Free Trade Agreement and noted, with regret that "this government's paralysis is so profound that they have given the impression that our whole politics is broken. The Prime Minister is so short-sighted that he wants to call us racist rather than engage with us to work through our concerns and negotiate in the national interest."

Ms BUTLER (Griffith) (12:28):  I rise to support the Asian Infrastructure Investment Bank Bill 2015, and, like my Labor colleagues, I am pleased that the Coalition finally, after months of dithering and infighting, agreed to support the Asian Infrastructure Investment Bank. Labor had been calling on the Abbott government to support the bank for many months.

This multilateral development bank has the potential to boost infrastructure investment in our region by more than $100 billion. It is an opportunity for improved infrastructure and to meet the infrastructure needs of our neighbours in this region. We can see that this bank will give rise to great opportunities and has the potential to make a great contribution to economic development in developing nations throughout our region, so I am pleased that Australia is committing $930 million to the bank. The bank is supported by many of our friends and neighbours across our region and beyond, and it is a shame that we had to play catch-up when many of our neighbours saw the opportunity and the benefits very early, after the initiative was first made public.

It seems obvious to Labor that our nation needs to be part of this new institution, an initiative of our nation's great friend China. China will have over 30 per cent of the equity in the bank at the outset. When the constitution was signed by 50 of the 57 founders in July, President Xi Jinping called it 'a historic step'.

Labor has shown great leadership over many decades in building the relationship between China and Australia, and it is in the context of that great leadership that it is particular pleasing to support Australia's involvement in this bank today.

As we heard repeatedly from those who spoke on the condolence motion when we lost Gough Whitlam last year, Prime Minister Whitlam was a pioneer for the relationship, both in opposition and as Prime Minister. He advocated for the recognition of the People's Republic from 1954. Showing great leadership, with the support of our then national secretary Mick Young, he led a delegation to China in 1971 from opposition—he visited China before Henry Kissinger. On that visit he met with the Premier of China. That lengthy meeting was the first meaningful contact between Chinese and Australian political leaders since 1949.

Gough went to China in 1971 because of trade. There was a concern at the time that China might not renew its wheat contracts with Australia. Then Prime Minister McMahon was making excuses to Australian wheat growers, but Gough acted, drawing the Prime Minister's outrage. The consequence of Gough's action was a renewed understanding that to promote trade between our two countries there needed to be diplomatic recognition. A short time later the then conservative Prime Minister McMahon rubbished the visit and said:

"We must not become pawns of the giant Communist power in our region."

At the time, Prime Minister McMahon thought Labor's support of our nation's relationship with China was an "asset" to the Liberal Party.

Pleasingly, a short time later, in 1973, the then Prime Minister Whitlam became the first Australian Prime Minister to visit China.

The next Labor Prime Minister, Bob Hawke, was another great supporter of our relationship with China. He moved swiftly to build a relationship with Chinese leaders and in February 1984, following talks with Premier Zhao Ziyang, announced an agreement to integrate China and Australia's iron and steel industries. As the Australia-China Relations Institute at UTS has recorded:

Between 1977 and 1984 two-way trade—


an annual growth rate of 12.3 percent. During 1984-1985—

the financial year 1984-85—

Australia's exports to China rose by 73.4 percent, exceeding $1 billion for the first time. In the space of one year China went from being Australia's tenth largest export market to fifth—

in that year.

Prime Minister Hawke built up trade between our countries in iron ore, coal, wool, agriculture and other metals. That work stood us in good stead for the decades since.

Prime Minister Keating was a strong supporter of the relationship. For example, in his visit to China in 1993 he sought to increase trade, not just in commodities and agriculture but in advanced manufacturing and services, raising the prospect of exports in relation to telecommunications, computer science and environmental technology.

Prime Minister Rudd was known for his efforts to increase Australian understanding of China and to strengthen the already strong relationship with what had, by his prime ministership, become Australia's largest trading partner.

Of course, Prime Minister Gillard commissioned and delivered her white paper Australia in the Asian century. This paper focused on the opportunities that lay ahead for us in Asia, including in China, but of course not to the exclusion of all other Asian nations, taking into account the opportunities that we found in all of our neighbours in our region, including in India, Indonesia and other South-East Asian countries.

Prime Minister Gillard believed that Australia does not have to choose between the United States and China—that we can honour our treasured alliance with the United States and also be a friend to China.

With this strong and principled history of building the relationship, under our current leadership of Bill Shorten and his principled approach, it should come as no surprise that Labor supports Australia's involvement in this China-led initiative: the Asian Infrastructure Investment Bank. Of course, supporting the relationship and being a true friend does not mean that we should abdicate our responsibility to get the best deal for Australia in our dealings with our friend. For example, being a friend to China does not stop Labor from asking questions about trade deals and it does not prevent us from standing up for the national interest. So it is with the China-Australia Free Trade Agreement.

Like many others, I am a great enthusiast for greater trade with China, for reducing tariffs, for providing opportunities in the primary production sector and also for our highly skilled services sectors. I fervently wish to see more Chinese visitors in Australia, whether for holidays or to gain a great education. But that does not relieve me, or anyone else in this place, of the obligation to take seriously the ramifications for domestic jobs. It is not only right that we should ask questions about how labour and skills arrangements would work under a free trade agreement, but it is also our obligation as representatives. Similarly, as representatives who believe in democracy and sovereignty, we should be asking questions about how investor-state dispute resolution will work and what that will mean for our nation. No-one need look further than the current plain-packaging case to be reminded of the importance of that issue.

Calling us racist or xenophobic for asking these questions is not just aggressive, ridiculous and dangerous; it is completely divorced from Labor's historical context. It is Labor who's shown leadership in building ties and trade with China, and we will always do so.

The Coalition's lack of nuance and their refusal to engage in mature discussion is deeply regrettable, but what else would we expect from a government who are more interested in fighting than in promoting the national interest? This government's paralysis is so profound that they have given the impression that our whole politics is broken. The Prime Minister is so short-sighted that he wants to call us racist rather than engage with us to work through our concerns and negotiate in the national interest. I hope for the sake of our country that this dinosaur of a Prime Minister, who thinks winning points against Labor is more important than governing, will soon be consigned to history.

The Coalition's conduct in relation to the discussion about the effect of the China-Australia Free Trade Agreement seems all the sillier when you reflect on the fact that they originally declined to join this great China-led initiative—the Asian Infrastructure Investment Bank. In October last year, following division within the government—something all too familiar under this Prime Minister—Australia declined to sign up. At the time Paul Keating was scathing. He said:

The government's decision to decline founding membership of the Chinese-proposed Asian infrastructure bank is the worst policy decision the government has taken since assuming office.

That is a pretty big call. Of course, there are a lot of terrible policy decisions to choose from. Mr Keating went on to tell The Australian Financial Review:

It is the worst because of the far-reaching implications and consequences of deciding to have nothing geo-economically to do with China at a time when China is prepared to step up to greater responsibilities in the region.

Remember this was a few weeks before the G20, with Australia holding the presidency. We were claiming to stand for worldwide growth, but the government was dithering and divided over whether to join this bank, despite the economic development opportunities it offered.

At the time, Professor James Laurenceson, who is a Norman Park boy but who is also the Deputy Director of the Australia-China Relations Institute, wrote:

... trying to make sense of rejecting the proposal for the Bank on the basis of economic reasoning is nigh on impossible. In 2011 the Asian Development Bank estimated Asia required US$750 billion each year through to 2020 to finance infrastructure needs. In 2012 the amount the ADB lent for infrastructure was just US$7.5 billion. It was no surprise that among the government ministers it was Treasurer Joe Hockey and Trade Minister Andrew Robb who were keen on Australia joining the AIIB.

What a shame it was that they were rolled at first instance. And is it not pleasing that finally the right decision has been made and we have now agreed to sign on to the AIIB?

Professor Laurencson went on to say:

The decision to rebuff China's invitation is awkward to say the least. Australia made reducing barriers to infrastructure investment a focal point of the G20 agenda. There is also the small matter of the memorandum of understanding the Australian and Chinese governments signed in 2012 on enhancing cooperation in infrastructure construction.

It was a highly perplexing and strange decision at the outset. As I said, we welcome the fact that after months of dithering and infighting with ministers disagreeing with each other, the Abbott government has agreed to formally sign up as a founding member of the Asian Infrastructure Investment Bank. We are among 50 of the 57 founding members who signed up on 29 July this year.

This new bank, as I said, will have significant Chinese equity but we will be one of the major shareholders. That is because Labor understands the potential that this bank has to contribute to infrastructure in our region. It is a shame Australia had to play catch up. Many of our friends in the region and beyond like New Zealand, United Kingdom, South Korea, Germany, France, Italy, India and Singapore threw their support behind the bank well in advance of Australia doing so. It was a great shame that so much time was wasted as Abbott government ministers leaked against each other from cabinet and from the National Security Committee. There was an embarrassing display by the government but, now that has been dealt with, we hope that the government will engage constructively on the priorities for the bank and work to ensure robust transparency and accountability arrangements.

Labor has been saying for months that we should support the establishment of this bank. By contrast, there was total mishandling by the Abbott government. For Australia to chart its course in this world, for us to maintain our history as a nation that leads the fight for a better world, we must embrace a vision that actually looks beyond our own borders and looks at how we can make a contribution to our globe and to our region. We are a wealthy country. Under the last Labor government, we came out of the Global Financial Crisis as the 12th largest economy in the world because of the work that was done. We had a AAA credit rating. We had a strong economy. We are a nation that can perform well above what might be expected of a small nation of only 23 million people. We have traditionally done so well being part of the globe, being part of an international community that wants to see improvements in development, improvements in peace across the world. Being involved in multilateral organisations like this bank is an important part of the work that we do.

It is incredibly pleasing to support this bill, to support the contribution that our nation will make to the Asian Infrastructure Investment Bank and also to see that the government has finally come to a position of being able to—albeit belatedly—agree to sign on as a founding member of the bank. I commend the bill to the House.

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