Dave Sharma (NSW, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Hansard source

I thank my colleagues for making quorum; I appreciate that. Australia's interests in the Pacific are vital, and this is something I know personally. In my earlier career, before coming to this place, I was an Australian diplomat, and in fact my first overseas posting was in Bougainville, a province of Papua New Guinea, where we maintained a peace monitoring group, a regional peacekeeping force, to help put an end to the Bougainville civil war of the 1990s. My second diplomatic posting was in Port Moresby in Papua New Guinea, and I was very heavily involved in our regional assistance mission to the Solomon Islands, which deployed there to, again, quell civil unrest and the risk of a civil war in the early 2000s. Making sure that Australia retains strong links to the Pacific and making sure that the Pacific becomes more stable, prosperous and secure over time are not only important national interest objectives, I think, but important objectives that I'm personally committed to.

As a coalition, when last in government, we were the authors of what we called the Pacific Step-up, and I'm proud of the record that our government was able to achieve. We became the first country, and I think we're still the only one, to establish diplomatic posts in every member nation of the Pacific Islands Forum, every PIF nation, which had not been the case previously. We expanded regional security through the $2 billion Pacific Maritime Security Program, which included the delivery of Guardian class patrol boats, allowing Pacific Islanders and Pacific island nations to better protect their fisheries and to better enforce maritime security. We significantly expanded the Pacific labour mobility scheme and the Seasonal Worker Program, which, importantly, addressed labour market shortfalls in Australia and also gave important skills to Pacific Islanders, allowing them to upgrade their level of skill, and provided a valuable flow of remittances to Pacific island countries. Those links between our nations, the Seasonal Worker Program and the labour mobility scheme, remain important elements of our bilateral ties. We also established the Australian Infrastructure Financing Facility for the Pacific, the AIFFP, which has provided and unlocked billions of dollars in loan and grant financing for key infrastructure projects in the Pacific, whether they be telecommunications, ports, airports or roads. They're all things that will help improve the economic prospects of this region. Of course, we were intimately involved in the COVID response in the Pacific, helping Pacific Island nations secure masks and protective gear at the initial stages of the outbreak of COVID and then also vaccines down the track. I think both sides of the House, to their credit, have taken a close interest in the affairs of the Pacific, and it's important we continue to do so.

I appreciate that the Pacific Banking Guarantee Bill 2025 is formulated very much with that in mind. The intent is to help maintain an Australian banking presence in the Pacific and to make sure that Pacific Islanders continue to have access to sophisticated financial services, especially from financial sources that have high transparency and high regulatory standards, like the Australian banking system does. But we, the coalition, do have some concerns about elements of this bill, which were well canvassed in additional comments to the Senate committee report into this, as authored by my colleague Senator Hume. First of all, I think we have some concerns that the bill provides for an uncapped appropriation with no maximum dollar limit and no end date. It was argued by the government, the proponents of the bill, that flexibility is needed, but an uncapped appropriation inevitably reduces parliamentary oversight of future spending and increases the potential liability—the exposure of the taxpayer for future guarantees.

Earlier this year, ANZ announced it would be the first recipient of the Pacific banking guarantee, which would be a maximum $2 billion, 10-year bank guarantee to support its operation in the region. Obviously, that guarantee is contingent on the passage of this legislation, and no other guarantees have been announced to date. But there is the potential—because, as I said, the appropriation is uncapped—for that dollar limit to grow considerably, with there being no end date. That is a concern to us. ANZ has reportedly paid an undisclosed annual fee to the government for the guarantee, but the exact details have not been made public due to commercial confidentiality.

Obviously, I accept at face value the utility of this mechanism in allowing ANZ and other banks to continue to maintain the commercial viability of their presence and operations in the Pacific. The presence of Australian banks in the Pacific is an important national asset for Australia and one we should seek to protect and preserve. But one concern in particular I have about this bill, and I know it's shared about my colleagues, is about some of the unintended consequences that might flow from it onto Pacific banking institutions themselves, notably the Bank South Pacific, BSP. BSP executives and leadership did come to meet with me a few weeks ago. BSP, as some of you might know, is the largest and most widespread bank in the South Pacific. It provides banking and financial services both retail and commercial to large numbers of Pacific Island citizens and also Pacific Island businesses. BSP had a number of concerns about the lack of consultation that they had experienced with respect to this bill, the lack of publicly available information about what is being provided to ANZ and, naturally enough, what it will mean for their own competitiveness in the region. If the result of this Pacific banking guarantee is that we render or make BSP or other Pacific banking institutions commercially unviable, then the net result of this intervention will be worse for the Pacific and worse for our interest in the Pacific.

In that vein, and as my colleague Senator Hume put in her additional comments, we would encourage the Treasury in particular to reconsider whether there is more information about the guarantee that could be made publicly available. We would encourage Treasury and relevant Treasury ministers in the government to consult and meet with executives from Bank South Pacific to provide as much information and detail as they can, importantly, to provide reassurance—because I don't believe this is the intent—that this guarantee is not intended to commercially undercut BSP or render them unviable. We think it's important, particularly going forward, that some of those reassurances are provided.

As I said, we do have some concerns about the risk to Australian taxpayers from an uncapped liability with no maximum dollar amount and no end date, but we did hear evidence from Treasury during the committee inquiry that the risk to Australian taxpayers for these guarantees is low. For those reasons, we do not propose to oppose this bill. But, in not opposing the bill and in engaging constructively with the government on it, we would urge the government, as I said earlier, to make sure there are no unintended consequences of this bill, that Bank South Pacific and other Pacific banks are better briefed and provided and furnished with as much information as possible. Particularly, provided this bill passes, once it is passed and enacted and becomes operational, the commercial and competitive impacts on the banking industry in the South Pacific should be closely monitored to make sure that we are not rendering sovereign Pacific banking and financial institutions unviable as a result of this well-meaning intervention.