Richard Dowling (Tasmania, Australian Labor Party) Share this | Hansard source

I rise today in firm support of the Pacific Banking Guarantee Bill 2025. It's a critical piece of legislation that not only underpins Australia's economic and diplomatic presence in the Pacific but also echoes the Albanese Labor government's enduring commitment to equitable access to financial services both at home and across our region.

For those of us in this chamber who represent regional communities, as I proudly do, this bill should resonate deeply. The decline of banking services is not just a local issue in rural and regional Australia; it's also being felt in our Pacific family, in places like Tonga, Vanuatu and the Solomon Islands, where everyday people are increasingly cut off from the global financial system. Whether it's a sugar cane grower in Mackay or a market vendor in Suva, people need a functioning banking system to build a life. This bill addresses that challenge head on. The Pacific banking guarantee enables the Commonwealth to step in where risk aversion from major financial institutions threatens to leave whole communities behind. Under this legislation, the government can issue guarantees to Australia based, authorised deposit-taking institutions operating in the Pacific, allowing them to maintain services that are commercially marginal but socially and strategically essential.

The Pacific is our neighbourhood. Since coming to office, the Albanese Labor government has been working hard to restore trust, rebuild relationships and be the partner of choice in the Pacific region. Within our first 12 months in office, ministers from the Albanese government visited every Pacific Islands Forum member country to renew our Pacific partnerships, to listen to Pacific priorities and to deliver on our collective interests. Indeed, we are the region's largest development partner. But let's be clear. This bill is not about benevolence; it's about sovereignty, it is about stability, and it is about keeping Australia present, visible and trusted in our immediate region. Just as we wouldn't tolerate rural towns in our own backyard being financially abandoned, nor should we allow friendly Pacific nations to be left to the whims of foreign-state backed lenders and opaque financial actors.

In recent years, we've seen correspondent banking relationships, the backbone of cross-border financial activity, evaporate across the Pacific. According to the IMF, the Pacific region has experienced one of the sharpest declines in such relationships globally. In fact, the Pacific is losing correspondent banking services at twice the rate of the global average. This is not just a banking problem; it's a national security issue, an economic sovereignty issue and a long-term diplomatic risk for Australia. With this bill, we are making it clear that Australia is in the Pacific to stay, through our banks, our institutions and our principles.

To illustrate the practical application of this bill, I want to draw attention to the arrangement struck with ANZ, Australia's largest financial institution in the Pacific. The Commonwealth and the ANZ have entered into a 10-year guarantee agreement underpinned by this very legislation. The guarantee, up to $2 billion, will allow ANZ to remain operational in key Pacific markets where economics might not justify a continued presence but the national interest certainly does. This is not a free handout though. ANZ will pay a commercial fee to the government for the guarantee, and, in return, it will continue providing services that no other institution is willing or able to offer. Significantly, ANZ will invest a further $50 million into improving digital infrastructure and expanding fee-free remittance options into the Pacific, putting money back into the pockets of Pacific workers and their families. This is exactly the kind of outcome we want from public/private collaboration—government backed stability while the private sector delivers the service.

Some on the other side of this chamber might argue that this kind of intervention distorts the market—that it's too risky, that it's government overreach. To that I say look at our track record. We already backed the Australian banks through the Financial Claims Scheme. We guaranteed deposits, and we provided wholesale funding support. During the global financial crisis, we underwrote interbank lending. During the pandemic, we coordinated liquidity to the Reserve Bank. This legislation is a continuation of that tradition—limited, targeted and in the national interest. Crucially, it's not open-ended. Each guarantee will be assessed individually under section 60 of the Public Governance Performance and Accountability Act. The government will remain discretion and force transparency and collect commercial fees. So let's not pretend it's a blank cheque. It's a smart investment in resilience and influence.

What we're doing here is also an investment in regional economic stability. When banks exit fragile markets, what fills the vacuum? Informal lenders, unregulated remittance operators, foreign state owned institutions with opaque mandates—in short, instability. Financial exclusion fuels corruption, tax avoidance and crime. It breaks down the trust between people and institutions. It limits the ability of governments to collect revenue to fund schools, hospitals and infrastructure. We cannot allow that dynamic to fester on our doorstep. That's why this legislation matters. That's why it complements the almost $3.3 billion commitment we've made to the Indo-Pacific in development assistance, supporting financial literacy, digital identity systems and anti-money-laundering capabilities. You can't have development without banking, and you can't have banking without a system to support it. That's what this bill provides.

I will also touch briefly on what this means for working people, especially those of Pacific heritage living here in Australia. Every year, hundreds of millions of dollars are sent in remittances from workers in our country to families across the Pacific. These are not luxury transfers. These are school fees, medical bills and housing support. They are acts of love of solidarity. When banks pull out of the Pacific, these families are the first to feel the pain. Transaction costs skyrocket; fraud becomes a greater risk; and, too often, the money simply can't get through. By ensuring that established regulated banks remain present and functional, we're not just backing institutions; we're backing people. This is a win for Pacific families, a win for multicultural Australia and a win for every worker trying to support loved ones across borders.

Colleagues, this bill is part of a larger story. Since coming to government, the Albanese Labor government has tackled head on the challenges facing Australia's financial system, particularly in the regions. We've pushed back against branch closures. We've stood up to customers hit by junk fees. We've restored trust in financial regulators. We're levelling the playing field for smaller banks, making sure competition remains alive and well. This legislation sits comfortably within that agenda. It's about fairness, security and doing what works. It reflects Labor values—practical, not ideological; cooperative, not combative; regional, not just metropolitan; internationalist but grounded in the national interest. It's the kind of policy that only a Labor government can deliver, and I'm proud to support it.

In conclusion, I encourage all senators across parties to support this legislation because the truth is the Pacific is not just a peripheral concern. It is central to who we are and how we live. In banking, it's not just a commercial service; it's a social utility—essential, foundational and transformative. Within this bill we affirm that Australia is a reliable partner, that we take our obligations seriously and that no-one, whether in Fiji, Tonga or Samoa, should be left behind by the forces of financial retreat. Let us pass this bill with conviction and clarity. Let us build a banking system that works for people, not the other way around. Let us do so with certainty that this is what good government looks like.

I commend this bill to the Senate.

(Quorum formed)