A new law allowing governments to increase New Zealand's multibillion-dollar commitment to the International Monetary Fund without legislative changes in Parliament passed its first reading today.
The Government's International Finance Agreements Amendment Bill alters existing legislation to recognise changes to the terms of membership of the International Monetary Fund (IMF).
The changes to the IMF's rules were agreed in 2008 and 2010 and were intended to improve the representation of fast growing emerging economies and also to increase the pool of funds the IMF has available to lend to countries facing financial difficulties.
Finance Minister Bill English said New Zealand's commitments to the IMF "are effectively premiums to an insurance policy against damage to our economy from an unstable world".
"Contributing to the IMF and global financial stability is also part of our international reputation."
New Zealand currently has a commitment of $2.9 billion and changes in the bill would lift that to about $3 billion.
However, the bill would also allow governments to increase that commitment via an order in council or regulation without going through the full legislative process.
Mr English said a number of Acts had future-proofing clauses that allowed the executive or Cabinet, rather than Parliament, to update the text of a treaty.
"These changes do not mean we will change the way in which we consult on important IMF policy changes. Rather, this bill is about demonstrating our commitment to multilateral action, as well as simplifying the processes needed to update our own legislation to reflect what has already been agreed to with the IMF."
While Labour's finance spokesman David Parker said his party was comfortable with the changes to IMF rules it did not support the measure allowing further commitments to be made without parliamentary scrutiny. Nevertheless, Labour would support the bill to the committee stage, he said.
Later as the bill was being debated, his colleague David Cunliffe told Parliament: "Our position is, yes we do want to be responsible members of the global community but no, we don't want to write a blank cheque to the executive or any executive including ourselves in two years because we think this is a matter of significant substance that deserves Parliament's time."
Greens co-leader Russel Norman said his party would oppose the bill because of the regulation-making power it gave the government.
NZ First MP Andrew Williams said his party supported the bill but wanted concerns about the regulation-making power addressed at the select committee stage.