Today I welcome the passage of legislation that enables Australia to become a founding member of the Asian Infrastructure Investment Bank (AIIB).
Australia will now have a pivotal leadership role at the AIIB, working with other founding members including China, India, Korea, the United Kingdom, Germany and France.
The AIIB will fund major infrastructure projects throughout the region and help to fill this decade’s estimated US$8 trillion Asian infrastructure financing gap. This massive market presents a major new opportunity for Australian businesses.
This legislation gives effect to the Government’s commitment to help build infrastructure and boost job creation throughout our region along with some of our closest trading partners. Trading partners that will build new ports and freight corridors, enabling Australian businesses to get more of their product into these key markets. Additionally, Australian business will have more opportunities to directly build this infrastructure across the region.
The legislation includes an appropriation for the payment of Australia’s capital contribution to the AIIB, which does not directly impact on the underlying cash balance. Australia will contribute US$738.3 million (approx. A$932 million) paid-in capital to the AIIB over five years, and will be the sixth largest shareholder.
The AIIB is expected to become operational before the end of 2015.