Pat Conaghan (Cowper, National Party, Shadow Assistant Treasurer) Share this | Hansard source

I rise today to speak on the Pacific Banking Guarantee Bill and note that Australia has always stood by our neighbours in the Pacific and we always will. We share a region and deep enduring ties, from early trade between Indigenous Australians and Pacific islanders to the courage shown along the Kokoda Trail to standing together after natural disasters.

The coalition has a proud record in the Pacific. In 2021-22, we delivered a record $2.7 billion in support, including loans across aid, security, health and financial programs. Under the coalition, we became the only country with diplomatic missions in every Pacific Islands Forum nation. We deepened maritime cooperation through the $2 billion Pacific Maritime Security Program, delivering 14 of 21 Guardian class patrol boats. We will continue to work constructively with the government on these issues because, when our mates need help, Australia steps up.

The Pacific Islands Forum has made it very clear that debanking poses a serious threat to the Pacific economies. Debanking occurs when major international banks withdraw services from local institutions, disconnecting them from the global financial system. Many Pacific economies rely on correspondent banking relationships to stay connected. For example, a construction business in Tonga might import building equipment from Brisbane. Because their local bank doesn't have a direct link to Australian banks, a larger institution, like ANZ, steps in to process the international payment. That's a correspondent banking relationship. When it's lost, trade, payment processing and investment become so much harder, so much slower and so much more expensive. But these relationships are under pressure. Regulatory costs for major banks have increased and, for many, the returns from servicing these markets no longer stack up. Since 2011, correspondent banking relationships in the South Pacific have fallen by 60 per cent. This creates openings for alternative financial networks, some of which may lack transparency or fall outside global anti-money-laundering standards. If trusted Pacific nations lose access to Australian banking, others will fill the void, right on our doorstep. We cannot afford to let that happen.

This bill supports Australia's financial presence in the Pacific by underwriting Australian bank operations in the regions. The announced $2 billion, 10-year guarantee for ANZ is the first of these guarantees. The coalition strongly supports the principle of this bill, but we want to be upfront with taxpayers about what the bill provides—an uncapped, open-ended appropriation with no end date. Yes, Treasury has advised the risk of a call on these guarantees is low, and, yes, we expect future guarantees to follow the ANZ model being time bound and financially limited. But proper safeguards and oversight are essential. This is taxpayers' money. We're being asked to underwrite the international operations of our banks, and Australians deserve to know exactly what risks are involved. We want confidence that these guarantees will work, and we want to know why the bill must have an uncapped appropriation with no date.

That's why, while we will not oppose the bill, it should go to the Senate Economics Legislation Committee, not to delay it but to make sure the details are right and taxpayer funds are properly protected. Australia will always stand with the Pacific, and the coalition will always stand up for Australian taxpayers.

Debate adjourned.

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