Pat Conroy (Shortland, Australian Labor Party, Minister for Defence Industry) Share this | Link to this | Hansard source

The Pacific is our home. It is in our interest to foster a resilient, connected region that enables all our economies to grow and our people to prosper. The Albanese government has brought new energy and ambition to revitalise our Pacific partnership after a decade of neglect. We're using all tools of statecraft, security cooperation, development cooperation and people-to-people links to do this. We're also supporting the services that underpin economic growth, such as banking, aviation and critical infrastructure.

The Pacific looks to us first for support. That is what good neighbours do. We're also facing a more uncertain international environment and we are in a permanent contest in the Pacific, both the Minister for Foreign Affairs and I have repeated that many times. That is why it's been so important that there has been such a transformational change in Australia's approach the Pacific since we were elected in 2022.

We've signed landmark treaties with Tuvalu and Nauru, creating a safer region and advancing our position as a security partner of choice. We've strengthened cooperation with Papua New Guinea through our bilateral security agreement and our landmark national rugby league deal. These are both underpinned by strategic trust. We're also getting our relationship with the Solomon Islands on a better footing by building its police force. This confirms our position as their security partner of choice.

We're also building a proud track record assisting one another after natural disasters. Most recently, we worked to support Vanuatu after its earthquake on 17 December last year, getting rescue and humanitarian teams on the ground within 24 hours of Vanuatu's request. And we shouldn't forget that, when Australia was hit by the terrible bushfires of 2019-20, Fiji sent 54 of its soldiers to help our emergency responses. I will always be grateful for that.

Our investments have helped ensure every Pacific Islands Forum country will have an undersea telecommunication cable by the end of 2025, to bolster economic growth. I met with Prime Minister Teo, of Tuvalu, yesterday to discuss their recent connection, and we're building people-to-people links.

A love of sport is a connection we share with the Pacific, and we're building sports cooperation, whether it's rugby league with PNG; soccer with Vanuatu and the Solomon Islands; netball throughout the Pacific; or rugby union with Fiji, Tonga and Samoa. Sport is bringing our countries closer together.

We're committed to growing and strengthening the Pacific Australia Labour Mobility Scheme so it delivers on the region's ambitions for more skills and opportunities. This includes expanding opportunities for the Pacific and Timor-Leste and embedding a skills dividend in the scheme by helping fill vital worker shortages in regional and rural Australia. And we've created the first ever Pacific permanent migration pathway through the Pacific engagement visa, responding to a longstanding request from our Pacific partners. The first ballot for that PEV had 56,000 applications for only 3,000 spots, demonstrating the strong support throughout the Pacific for this important scheme.

Our engagement with the Pacific is underpinned by this government's recognition that climate change is the No. 1 concern of the Pacific. All this has helped us to build transformational relationships—for example, our landmark Australia-Tuvalu Falepili Union responds to Tuvalu's position at the frontline of the climate crisis. I recognise this has enabled us to unlock greater security corporation.

The Pacific Banking Guarantee Bill 2025, which we're debating right now, is part of our commitment to our Pacific neighbours. The Albanese government places a high priority on ensuring that the Pacific and Timor-Leste remain connected to the global financial system. The Pacific, unfortunately, has experienced the fastest withdrawal of correspondent banking relationships anywhere in the world. Just as the Pacific suffers the worst consequences of climate change, its businesses, workers and people are being disproportionately affected by bearing the cost of debanking.

Secure access to the global financial system and banking services is critical for economic growth, financial inclusion and overall stability. That's a statement of the bleeding obvious, but it's very important. At a national level, banking services mean government and businesses can engage in international trade, progress projects for infrastructure and essential services, and maintain and grow their economies. At a local level, banking services allow people to start up a new business and to maintain and grow their existing businesses. They enable workers to send money home to support their families and communities. For example, we've seen for many years how significant remittances can be. Under the Pacific Australia Labour Mobility scheme, workers from the Pacific contribute to Australia by filling labour gaps in regional and rural areas and specific industries. Right now, over 30,000 PALM workers are filling those labour gaps, and, again, on behalf of the government, I want to say how grateful I am to them, their families and their countries for assisting the Australian economy.

At the same time, those workers are sending, on average, $1,500 per month to their families and communities back home. I've visited many communities in the Pacific and Timor-Leste, and I've seen firsthand how this income directly alleviates poverty in local communities. It helps pay for food and other essentials. It pays for education and medicine and is even used to start small businesses, contributing to economic growth and job creation. Importantly, it's also dealing with gender equality and the divide that we see in many nations around the Pacific. Banking services are essential in supporting remittances and funds transfers through people, organisations, businesses and nations. Australia and our Pacific partners want to avoid the situation where Pacific nations are debanked and lose access to timely and affordable cross-border payments and banking services.

This is not about any individual country; this is about enhancing our cooperation with our Pacific island neighbours. This is about listening to their needs and working together on solutions. We all want to live in a region that is peaceful, stable and prosperous—a region where our partnerships are grounded in respect, including respect for sovereignty. We're committed to doing our part to contribute to this vision. For over 140 years, Australian banks have been a partner to the Pacific region. Today, three Pacific nations use the Australian dollar as their national currency, underscoring our economic interdependence. In fact, the Foreign minister of Nauru reminded me about how generous they are to let us use their currency in Australia!

But banks are not just financial intermediaries; they are symbols of our commitment to the region. They are a key to stronger trading and investment relationships between us and our Pacific neighbours. Their presence in the Pacific ensures that our neighbours can stay connected to the global financial system and experience secure, reliable and high-quality services. I've directly engaged with Pacific leaders and Australian bank executives to find ways to ensure that we have an enduring banking presence in the region. Australian banks' Pacific operations are lauded for maintaining high standards of service quality and high rates of regulatory compliance, helping to thwart financial crime. The importance of this cannot be overstated. Economic instability creates vulnerabilities that can be exploited by transnational criminals and other bad actors. Ensuring that the Pacific has a robust financial system mitigates financial crime risks and supports economic resilience.

A financially stable Pacific benefits Australia, and I thank the Commonwealth Bank of Australia for providing banking services to Nauru in our national interest. This is a critical part of the Nauru-Australia Treaty. Under that treaty, Australia committed to ensuring that Nauru will not be left without a bank when the Bendigo and Adelaide Bank departs this year. The treaty also reflects our shared commitment to security that is led by the Pacific family, which is in our deep national interest.

I also acknowledge ANZ's commitment to remaining in eight Pacific markets and Timor-Leste. ANZ has been in the Pacific for 140 years, playing an incredibly important role. I remember meeting the regional ANZ manager in the Solomon Islands, where he briefed me about how they reduced their fees during the COVID period for admittances because they knew there were thousands of Solomon Islander workers stuck in Australia, trying to send money back to sustain their families, when the region was devastated by the economic impact of COVID.

The guarantee contained in this bill will support meaningful access to face-to-face banking services. It will also support enhancements to ANZ's banking services, including its digital banking services. ANZ will continue to support access to international money transfers and correspondent banking services, and will also support Pacific countries through infrastructure financing in line with the bank's credit risk policies. The guarantee is a responsible and low-risk way to secure ANZ's long-term commitment to the Pacific.

Supporting the Pacific Banking Guarantee Bill 2025 is how members in this House can advance our national interest. A secure, stable and inclusive financial system in the Pacific is not just beneficial to the region; it is in Australia's national interest. We're also doing our part to address the structural factors that are leading banks to exit the Pacific. This includes helping to build digital identity infrastructure in seven Pacific jurisdictions; building the capacity of financial intelligence units so Pacific governments can respond to money laundering and terrorism financing risks; trying to find ways to address the lack of scale in Pacific countries' financial markets—we're doing this in partnership with the World Bank; I met with the deputy head of the World Bank yesterday to discuss this important project—and supporting secure and affordable channels for Pacific workers to remit money, which is something we're doing with New Zealand and the European Union.

I'm pleased to be part of a government progressing this important piece of legislation. We must ensure that Australia remains the partner of choice for the Pacific. Let us be clear that safeguarding banking services and the financial system is all about underpinning greater economic resilience and security in our region. We're committed to listening to and working together with our Pacific neighbours on issues that matter to us both. This bill is a clear demonstration of our commitment to do this. I commend the bill to the House.

Jason Wood (La Trobe, Liberal Party, Shadow Minister for International Development and Pacific Island Affairs) Share this | Link to this | Hansard source

I thank the minister for his eagerness to support our great friends in the Pacific. I know his intentions are well and truly for the right reasons. It is the same on the side of the House; I acknowledge the member for Riverina, the former shadow minister for international development and the Pacific, who I know will be speaking after me.

I make the point that the previous government never neglected our Pacific neighbours; in actual fact, it delivered a record $2.7 billion in Pacific support in 2021-22 across aid infrastructure, health and security. We became the first and only country with diplomatic posts in every Pacific Islands Forum nation, and we expanded regional security through the $2 billion Pacific Marine Security Program, including the delivery of the Guardian class patrol boat—something so important for our region.

When it comes to this bill, the Pacific Banking Guarantee Bill 2025, we definitely support the bill in principle. We support the intentions of the bill. However, we believe it needs to go to the Senate Economics Legislation Committee because there are questions which need to be answered in regard to it. One of the first things I will talk about is that the local bank over there in the South Pacific, the Bank South Pacific itself, is ASX listed. I met with a number of the executives the other day, and they gave me a bit of a rundown of what they do; I will just go through it here. Ninety-seven per cent of the BSP is owned by the South Pacific, making it the fundamental driver of the region's prosperity. The PNG government owns 22 per cent of South Pacific superannuation funds and is the largest shareholder in the BSP, with 36 per cent. It is one of the largest employers, with 4,600 employees. One of the points I'd like to make is that we want to make sure their voices are heard. When it comes to remote areas in the Pacific, that's where, I've been advised, the Bank South Pacific does a lot of good work on the ground. When we had the situation where money was given back in COVID times to Red Cross, where they supported other organisations providing funding—we just want to make sure we don't, as a country, do the wrong thing by the Bank South Pacific. With the best of intentions, I think the bill needs to be examined further.

The Liberal-National coalition's track record in the Pacific has always been pragmatic: an infrastructure led engagement combining geopolitical interests with development goals. The coalition strongly supports the continuing commitment to the Pacific that began with early governments trying to address contemporary strategic and economic challenges. We know those challenges in the area, and I do acknowledge the work the government is doing. This should be an area with a bipartisan approach because it's in the interests of all Australians.

This bill empowers the government to guarantee Australian bank operations in the Pacific using the consolidated revenue fund to provide financial backing should Australian banks in the Pacific face significant risk or default. The aim is not merely to secure continued bank operations but to maintain vital financial links for the Pacific island countries to the global financial system, especially for remittance, aid, and trade. We heard the minister rightly talk about the PALM program. That's something where those from the Pacific islands come and work in Australia. It could be in aged care. It could be in agriculture. The money they raise goes back to the families back home.

The coalition strongly supports the intention of the bill. We have concerns about how it's been drafted—as I said, further examination by the Senate Economics Legislation Committee would be important. Can I just say one thing having previously been a member of government: we always think we've got it right and we're doing the right thing, but there are always unintended consequences, and I think that, in a good democracy, that should be played out to hear from those who may be impacted to come up with what could be a better outcome for all those involved. Understandably, market conditions have made the Pacific region commercially challenging for banks and resulted in the de-risking and withdrawal of banking relationships, threatening access to basic financial services for many Pacific communities. If Australian banks withdraw, others will fill the void with alternative financial networks that may lack transparency or fall outside the regulatory standards. That's why it is so important for Australia to be the good neighbour and good friend—not only for security but also for social reasons and supporting our Pacific neighbours.

While the bill's intention is worthy, several concerns deserve attention. The bill creates a special appropriation from the consolidated revenue fund that is unlimited in scope and time. While this offers negotiating flexibility, it also raises transparency and fiscal oversight issues, potentially exposing Australian taxpayers to unknowing risk. Remember: this is Australian taxpayers' money. The bill and its mandatory materials lack clarity on several fronts, including the definition of low risk exposures to be guaranteed. Treasury says that financial risk is low and that the future guarantees will be time-limited and capped, but there is nothing in the bill that requires that. There is limited clarity on how future guarantees will be managed. The process for dispute resolution between banks and the government currently has no explicit mechanism in the bill for parliamentary oversight or regulatory review of the guarantees and their impact.

Clearly, definitions are needed specifying the types of risk and exposures to be covered and outlining objective criteria eligibility to reduce the uncertainty risk of future disputes—as examples, tying guarantees to measurable commitments by banks, maintaining service standards, investing in digital banking improvement, supporting financial inclusion and capacity-building initiatives should be looked at. Banks should be encouraged to work with regional partners, as I've said before, and harmonise regulation and explore sustainable market based alternatives so the guarantees to bridge to longer-term solutions are not permanent subsidies. For example, work in Bank South Pacific, because I think that will be a good way to go forward.

As I was saying before, in the former government we had a great respect for our Pacific neighbours, and that contribution, whether it be from security or aid, has always been important. I know the ANZ Bank announced in March 2025 that they would be one of the first recipients of the Pacific Banking guarantee of a maximum of $2 billion. The 10-year bank guarantee supported its operations in the region. As I said, we think that is very important. ANZ will be paying an undisclosed annual fee to the government for the guarantee, but exactly how it will go hasn't been made public. Many Pacific countries depend on correspondent banking, where larger banks like ANZ help local banks process payments and currency exchange. Since 2011, correspondent banking relationships in the south Pacific have fallen by 60 per cent, so it's so important Australia steps in and does its role there.

The opposition are supportive, and we will not oppose the bill, but it should go to the Senate Economics Legislation Committee. There are questions that need to be asked. There is uncapped appropriation—no maximum dollar limit. There's no end date—the guarantee power is open ended. There is limited clarity on how the future guarantees will be managed. Why is there no limit. Why is there no sunset clause, and what oversight will apply to future guarantees? Again, to all the Pacific islands, we, as one, are supporting you.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Immigration) Share this | Link to 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.

Michael McCormack (Riverina, National Party) Share this | Link to 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.