Michael McCormack (Riverina, National Party) Share this | Hansard source

If we believe that all the important words on the Pacific begin with the letter F—faith, family and football—we should add 'finance' as well. Certainly, the Pacific Banking Guarantee Bill 2025 does that. We need to be as agile and as adept with the Pacific as anything at the moment. If it's good enough to spend $600 million on a National Rugby League club to come out of Pasifika, with both Port Moresby and Townsville potentially hosting home games, then surely it is good enough to guarantee the banking provisions of our Blue Pacific friends.

There are, however, some questions that need to be answered. Why is there no limit on the total amount of taxpayer exposure? That's a very good question. Why is there no sunset clause with the provisions of this bill? What oversight will apply to future guarantees? Treasury says the risk is low, but what does that in fact mean? So far, only the ANZ guarantee has been announced. Will there be any others?

The impact that the Pacific Australia Labour Mobility scheme, the PALM scheme, has on local economies in the Pacific is absolutely enormous. According to World Bank figures, 44 per cent of Tonga's gross domestic product is made up by remittance which is sent home by those working abroad. In Samoa it's 30 per cent, in Vanuatu it's 21 per cent and in Fiji it's nine per cent. From 2018 to 2021, an estimated $64.15 million in savings and remittances were sent to the Pacific, and it paid an amount of $22 million in income tax.

The United Nations estimates that 15 per cent of each migrant worker's pay cheque is sent back home, with Australian government figures suggesting that this amount could reach as high as 40 per cent. The problem is that about 10 per cent of that amount is then lost in the foreign exchange, meaning that tens of millions of dollars that could be going back to the Pacific are not. When I was the shadow minister for international development and the Pacific, I spoke out against this because if it's good enough for hardworking individuals to come here and to do all the jobs that Australians either won't or can't do, then it should be good enough for Australians to protect their remittances to ensure that their families and friends back home are benefiting from the fruits of their labour. We must as a country make sure that as much of that money as possible is ending up in the hands of the intended relatives to stimulate the local villages, the towns and the cities of our Pacific region and not as a profit line on the balance sheets of major banks—banks which, I have to say, as part of their social licence to operate in Australia, should be helping out in the Pacific. And, whilst they mightn't make the generous profit lines that they make here in Australia, the fact that they are able to make such generous billions of dollars of annual profits here in Australia means there must be some responsibility and social licence to also operate in the Pacific. Yes, they won't be making billions of dollars, but they will make money. Banks don't operate if they don't make money. I commend the ANZ for stepping up; I do. It's important.

The coalition also very much stepped up when we were in government, and I commend the work that started under the Howard administration, particularly through the work of Marise Payne, former foreign affairs minister and senator for New South Wales. In government between 2013 and 2022, we as a coalition delivered a record $2.7 billion in Pacific support. Indeed, that was just for the 2021-22 year across aid, infrastructure, health and security. We became the first and only country with diplomatic posts in every Pacific Islands Forum nation. We heard the Prime Minister yesterday talking about the PIF and its importance. Well, we had an ambassador, a diplomatic post, in very one of the island nations. We expanded regional security through the $2 billion Pacific Maritime Security Program, including the delivery of Guardian class patrol boats. I was there in Vanuatu when one of these boats was launched. The locals were very, very happy with it, let me tell you. It's good enough for China to come in and build these lavish and grand buildings that they then have to maintain and upkeep; they much prefer having vessels they can operate as coastguards against illegal fishing in their waters, because that's one of the biggest dangers to them.

We know why China is making investments in the Pacific, and we know why they are absolutely wanting to roll out communications infrastructure in the Pacific. We know why that is the case. But the Pacific also understand that Australia will always be the very best friend that they have, and that goes back to those F's I talked about. We share values and principles of family, of faith, of football and, of the Pacific banking arrangements, with finance. We will continue to work constructively with the government on these particular issues.

Remittances are really important. My active work in this regard, when I was the shadow minister, did lead to some constructive changes, such that more of the remittances were actually ending up in the pockets of those who did the work, rather than in the pockets of perhaps the bank et cetera, where it was just not necessary; they make enough money.

At that time, the government had a program called Empowering Pacific Migrants through Remittances. The money went to funding a website. While it might have ticked some boxes on paper, it did very little to solve the problem. Requiring foreign-exchange providers to have transparent, upfront pricing by eliminating the fees in the exchange rates would empower the individual worker to make a more informed choice, instead of, let's face it, preying on the financially illiterate. Not everybody reads their financial documents when they're signing contracts and arrangements when they're signing up to a bank. While this is the case in Australia with a lot of people, it certainly happens in the Pacific. They just want much of their remittances to go back to where they are intended, and they do a power of work.

I was really disappointed with how the government treated the PALM scheme as a union grab. It attempted to unionise the workforce that came here under the PALM scheme and other arrangements, such that they were going to get a minimum number of hours. That's all well and good, and people should be paid for the work that they do, but that shouldn't come at the expense of the farmers, who are then, under the Labor government scheme, ending up paying for people who are doing nothing, paying for people who are idle. We all know how seasonal the work is with farming, particularly in the horticultural industry and in some of the other industries that are part of the PALM arrangements. Because I complained loudly and bitterly about this, it was changed. But, as I understand, it was only changed up until July, this month. It was about to be re-examined by the future government, at the time, but the future government unfortunately ended up being Labor re-elected, on 3 May.

However, we cannot make the system with minimum numbers of hours. What ends up happening is the farmer does not want to pay a minimum number of hours, because they may not have that work available at the time. They then don't employ the PALM workers. They either do the work themselves, or they just don't have the PALM workers onsite, so the PALM workers miss out, and the farmers miss out. The number of farmers who were not participating in the PALM scheme dipped, and it dipped alarmingly. That is why I insisted that Minister Conroy as well as Minister Burke do something about it at the time. Thankfully, something was done, but those provisions were only for until July this year, and it remains to be seen what will happen with that, because Labor was trying to unionise that scheme, as only Labor can do. The people who were missing out were our Australian farmers and the Pacific workers. We need a system that's going to be put in place to help them, but this particular bill does provide the government with an ongoing, uncapped appropriation to cover any future costs that the Commonwealth may incur in providing a Pacific banking guarantee to an Australian bank.

As I said before, Australian banks do need to participate. On 14 March, the ANZ announced it would be the first recipient of the Pacific banking guarantee. It was a maximum of $2 billion for a decade-long bank guarantee to support its operations in the region. I thank NAB, National Australia Bank, for its previous iterations and its previous involvement with the Pacific, but, unfortunately, what we've seen in recent times is a withdrawal of banking services from the Pacific. What you end up with when you have a withdrawal of the big four banking services—it's hard enough to keep them in the regions, as you would well know, Deputy Speaker Sharkie, from your experience in South Australia, no doubt—is other players moving into the space.

'Other players' is often code for rip-off merchants. What you see is international organisations—and we can't always rely on some of those banking providers from overseas—who move into the Pacific and take advantage of what you could almost term the financial illiteracy or good intention of some, but it wouldn't matter whether they were Pacific or anybody else. If there's a space to be moved into, if there's a vacuum, it leads to people who are not of good intent coming in and taking advantage of those people who just want to come here to Australia to do the hard work that we can't find workers to do here of our own accord and send their remittances home.

Many Pacific countries depend on correspondent banking, where larger banks such as ANZ help local banks process payments and currency exchanges. Since 2011, correspondent banking relationships in the South Pacific have fallen by—wait for this—60 per cent. Without corresponding banking services, Pacific nations lose access to foreign currencies and international payment systems, and that stymies the flow of payments such as remittances, which I mentioned before, overseas investments; and foreign aid. If Australian banks withdraw, others, as I said, will fill the void. Alternative financial networks often lack transparency or fall outside of regulatory standards. In other words, they are rip-off merchants, and they will take advantage of you as quick as they will look at you, particularly in the Pacific. What we then see is people basically being robbed. If Australian banks withdraw, others will move in.

The bill is about helping Australian neighbours stay connected to the global financial system and maintaining Australia's financial presence in the region. At this critical juncture, when the Pacific is a very, very contested space in this precarious geopolitical environment that we have found ourselves in, we need to be the very best of friends with the Pacific. We might sometimes provide different infrastructure than what our major trading partners often seem to find themselves providing, but, rest assured, the assistance that we will give in financial services, cyclone-proof buildings, road networks, strengthening seawalls, health, vaccines, helping women, helping people with disabilities, foreign aid and foreign development—we will be providing that, but I don't think China will.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that this bill be reported to the House without amendment.

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