19 December 2015
Media Release - #2015028, 2015

Australia welcomes US agreement to reform of the International Monetary Fund

The Australian Government welcomes passage of the 2016 Consolidated Appropriations Act by the United States Congress overnight which will enable the realisation of long awaited reforms to the International Monetary Fund (IMF).

The reforms, which were agreed to by the IMF’s membership in 2010, will improve the legitimacy and credibility of the IMF’s role in global economic governance by giving key emerging economies a greater stake in IMF decision-making.

This will be achieved by increasing their voting shares at the IMF and improving their representation on the IMF’s Executive Board, its key decision-making body.

As an example, China will now move from having the sixth largest voting share at the IMF to third, after only the USA and Japan. Similarly, India will move from the eleventh largest voting share to eighth. Australia’s voting share will also increase slightly as a result of the reforms.

The reforms will also deliver a boost to the IMF’s financial backing, by increasing its permanent resources to close to one trillion Australian dollars. The IMF’s financial strength helps underpin the confidence of governments and markets to trade and invest. It also ensures the IMF has sufficient resources to provide urgent financial assistance to countries facing economic crisis, as it did for many European countries during the global financial crisis.

The Australian Government has been a strong and consistent international advocate of IMF reform, recognising that a credible, effective and well-resourced IMF is important to Australia’s national interest.

We are pleased to see these milestone reforms coming to fruition and look forward to their prompt implementation by the IMF and its members early in the new year.