Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Immigration) Share this | Hansard source

As a Pacific nation, Australia is a partner that the region can count on. We share an ocean and we also share a future. Australia is committed to supporting our regional neighbours, listening to Pacific priorities and delivering on our collective interests. Together, we're building a stronger Pacific family, upholding our common values so we can all make our own decisions as strong sovereign nations, free to grow and to live together peacefully. Our region is stronger together, and we're counting on each other to support the aspirations and wellbeing of our people.

These are messages that came through in the trip that myself and the Foreign minister made recently, when we travelled to Fiji, Tonga and Vanuatu. It was my first trip as the Assistant Minister for Foreign Affairs and Trade, and it was a deliberate decision to go to the Pacific to reinforce the importance of that relationship to Australia and to demonstrate to our neighbours and friends how important the Pacific family is to Australia and how we understand the challenges that they are facing, particularly the challenge of dealing with climate change, which is an existential threat to many of those nations. As the Pacific's largest and most comprehensive development partner, our investments are designed to deliver transformative change to improve the lives and livelihoods of all Pacific peoples.

As the largest trading partner of many Pacific nations, we're supporting growing markets by reducing the barriers to trade and partnering with local businesses while continuing more than 40 years of tariff-free access into Australia. It was a point that we made on that trip, given what is going on in the international trading environment at the moment. It's having a dramatic effect on many Pacific nations. Some of those Pacific nations do have access into larger markets like the United States and are now facing tariffs on the products that they export to those markets. And, for a small island nation with a limited export potential and a limited export capability, when you are exporting into a market and there are trade challenges, it can make a big difference to the viability of that business, that industry and, ultimately, that country's GDP. That's why we reiterated that point with our Pacific neighbours—that Australia won't be taking a retaliatory approach to the tariffs that have been placed on us by the United States, and we'll make sure that we guarantee the tariff-free access to Australia, particularly for our Pacific neighbours.

We've partnered to better integrate our economy, making it easier for people to do business between the countries in which we live, work and study. Our support is focused on inclusive economic growth, sustainable infrastructure, jobs, skills and connectivity. The everyday but essential banking services people rely on are available through the guaranteed presence of Australian banks in nine countries.

When Labor was last in government, I was the Parliamentary Secretary for Pacific Island Affairs, so I travelled extensively throughout the Pacific. The one thing I noticed was that, despite the development challenges, most people in the Pacific had a mobile phone and most people in the Pacific used that mobile phone for a lot of their financial transactions, particularly their banking services, as many Australians do today as well. Access to those banking services is vitally important to their security, their livelihoods and their living standards. When those banking services are at risk because of banks pulling out of the Pacific, Australia has an obligation to work with our partner nations in the Pacific to stabilise their banking services, and that's exactly what the Pacific Banking Guarantee Bill 2025 does. It's about ensuring that we are putting in place the measures to provide that confidence in the Pacific banking system.

The continuing decline in access to cross-border banking services in the Pacific region and the reduction of Pacific operations by Australian banks are concerns shared by our government and by governments of our regional neighbours. The Pacific, unfortunately, has experienced the fastest withdrawal of correspondent banking relationships anywhere in the world. Over recent years, we have had some Australian banks reduce their Pacific operations. Secure access to the global financial system and banking services is critical for economic growth, financial inclusion and overall stability. We know that this access can offer life-changing opportunities for families and, importantly, businesses and communities in our region. This bill allows the Commonwealth to offer support to eligible Australian banks to maintain their Pacific operations by providing a guarantee that transfers risk of default on low-risk exposures to the Commonwealth. The bill provides a special appropriation from the Consolidated Revenue Fund, allowing the Commonwealth to pay any valid claims for the full amount of any guarantee in a timely manner in the unlikely event of a default.

We all remember the global financial crisis and how close Australia and many other developed nations came to a run on the banks. Thankfully, the Rudd government acted quickly at the time when that risk began to materialise and provided a government backing of Australians' deposits through that period. That action by the Rudd government stabilised the Australian banking system, and it also stabilised our economy, which meant that the government could then go about the government support that was provided to ensure that Australians got through that difficult period. We got through in better shape than most OECD nations. We didn't have a recession; we had small changes in unemployment. We didn't have rampant inflation, and we were able to stabilise our economy. It demonstrates how important government guarantees are at moments of economic uncertainty.

This bill provides that stability and that guarantee for our Pacific neighbours in the wake of the uncertainty resulting from the reduction in banking services in the Pacific. This guarantee is not a subsidy. Banks will pay a fee for the guarantee, as they should, and provision of this guarantee is not about any individual country. It's about enhancing cooperation with our Pacific island neighbours and is responsible for low-risk measures to assist in securing Australia's banking commitment to the Pacific. We place a high priority on ensuring that the Pacific, Papua New Guinea and Timor-Leste remain connected to the global financial system, and we share the concerns of many of our regional neighbours. This guarantee will make our region safer and more stable and make sure loved ones, families and communities can continue to access their money.

Australia is a respectful, reliable and transparent partner, responding to the Pacific region's needs and priorities. In uncertain times, Australia and the Pacific are counting on each other as we build a region that is a peaceful, stable and prosperous one. Australia, as the region's largest economic partner, is committed to working through the regional institutions that are in place, particularly the Pacific Islands Forum, towards our shared goals of stability and prosperity. Greater integration of our economy, particularly of our trading systems and business transactions, is making it easier for Pacific people in business to connect and investment to flow across the region. We've listened, we've learned and we're working together on a Pacific led, Australian backed solution, and we will continue to elevate the voices of our Pacific neighbours on issues that matter most to them to ensure a stable and prosperous region into the future.

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