PRESENTER: The Federal Government is issuing a warning about the increasing amount of money China is lending Pacific countries for infrastructure development. Its worried the Chinese funds are building projects that arent needed and the countries are racking up debt they will struggle to repay.
But the Opposition says Government cuts to the Australian aid budget are allowing China to step up its presence in the region.
MELISSA CLARKE: Chinas growing influence in the Pacific is troubling the Australian Government. Pacific nations have been taking advantage of concessional loans from China to embark on big infrastructure projects. But the Federal Government is concerned that some of those projects are white elephants.
SENATOR CONCETTA FIERRAVANTI-WELLS, MINISTER FOR INTERNATIONAL DEVELOPMENT AND THE PACIFIC: We work, and work cooperatively with China. We encourage China to utilise its development assistance in a productive and effective manner. In other words, we just dont want to build something for the heck of it. We just dont want to build a road that doesnt go anywhere. We want to ensure that the infrastructure that you do build is actually productive aid that is actually going to give some economic benefit or some health benefit or some education benefit to the people of our region.
CLARKE: The Minister stresses its not the source of the loans, but the debt it incurs that is the problem.
FIERRAVANTI-WELLS: The point that I am making is that burdensome debt can divert scarce public resources from more important needs such as health and education.
CLARKE: The Oppositions Foreign Affairs Spokeswoman Penny Wong says the Government shouldnt be blaming China.
SENATOR PENNY WONG, LEADER OF THE OPPOSITION IN THE SENATE: This is yet another indication of the Turnbull Governments approach to foreign policy, and that is its clumsiness. Simply lashing out at China every time the Government is in trouble isnt a good way to deal with a relationship that is of very great economic importance to Australia.
CLARKE: The Opposition points to successive cuts to foreign aid in recent Coalition budgets as one of the reasons Pacific nations are looking to China for help.
WONG: Lets remember that China has played an increasing role in the Pacific while the Coalition, under Malcolm Turnbull and Tony Abbott, have increasingly abandoned the region, relentlessly hacking at our aid funding and seeing an $11 billion cut to the development budget since they won Government. Well Pacific island neighbours have felt the impact of these cuts
CLARKE: International Development Minister Concetta Fierravanti-Wells has defended the Governments commitment to the region.
FIERRAVANTI-WELLS: The stability and security of our region is second only to the defence of Australia. Now the Defence White Paper which was released in November dovetails into this and clearly articulates the Turnbull Governments commitment to stepping up Australias engagement in the Pacific as one of our highest foreign policy priorities.
CLARKE: The minister wants international development agencies, such as the World Bank and the Asian Development Bank, to step up their presence in the Pacific.
FIERRAVANTI-WELLS: The expansion of the World Bank and the ADBs loan book to the Pacific is very important because it will afford the opportunity for the banks to have this ability of the existing loan books of the countries and to assess the viability and sustainability of repaying those loans.
