Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Today I am proud to introduce the Pacific Banking Guarantee Bill 2025.

This bill will help secure access to banking services across the Pacific.

It will help ensure our entire region can stay connected to the global financial system.

Australia's relationship with the Pacific is a special one.

Since coming to office, the Albanese Labor government has been working hard to be a partner of choice with the entire region.

We've been restoring trust and rebuilding relationships.

Within our first 12 months in office, Albanese government ministers visited every Pacific Islands Forum member country.

To renew our Pacific partnerships, listen to Pacific priorities and deliver on our collective interests.

We've been making record investments, and we are the region's largest development partner.

Around $1.9 billion in official development assistance to the Pacific last financial year—

Which will rise to $2 billion in this one.

I pay tribute to the work of the Prime Minister, Deputy Prime Minister, foreign minister, trade minister, Minister for International Development and the Pacific, and the Assistant Treasurer.

When it comes to banking in the Pacific, the challenges in front of us are clear, and confronting.

We know the Pacific has seen the fastest withdrawal of correspondent banking services of any region in the world.

We know these vital services help communities access foreign currencies and international payment systems.

And we also know that without them, large parts of the Pacific risk being cut off from the global financial system.

At stake here is the ability of the Pacific to engage with the world.

This pressing challenge was one of the main topics discussed with counterparts at the Pacific Islands Forum Economic Ministers Meeting last year.

That marked the first time an Australian Treasurer had travelled to the Pacific to attend that forum in almost two decades.

It's also the challenge this bill helps tackle.

This legislation allows the Commonwealth to use its balance sheet to support Australian banks to maintain their Pacific operations.

It will enable the Commonwealth to guarantee an Australian banks' business in the Pacific—either directly or through its subsidiaries—against the unlikely possibility of a default in the region, which may force them to shut their operations.

Eligible Australian banks will pay a fee to the Commonwealth for the guarantee, it is not a subsidy.

It is highly unlikely this guarantee will be needed.

But it is still an important and necessary change to make sure our Pacific family can continue to bank with confidence.

This legislation is just one part of the substantial progress we've already made to secure the future of banking services in the region.

Working with the Commonwealth Bank to establish banking operations in Nauru this year.

Working with ANZ and Westpac to secure their continued presence in the Pacific.

Working with the World Bank and Asian Development Bank to develop digital identity infrastructure and improve compliance with regulations.

And funding our Attorney-General's Department to help build capacity in Pacific countries, to strengthen protections from financial crime and build trust in the system.

We've been able to make all this progress at the same time as also securing access to banking services around Australia.

Yesterday the Albanese government announced we've locked in commitments from Australia's biggest banks to stay open in the bush.

Because of our efforts, all major banks now have a moratorium on branch closures in regional Australia for two and a half years.

And we've helped secure a number of new agreements to shore up the vital services provided by Bank@Post.

And here I acknowledge my colleague the Minister for Communications. We worked closely on that outcome.

We are standing up for regional Australians, helping to secure the banking services that they need and deserve.

But, more than banking, it's about keeping regional communities connected to our national economy and thriving.

Banks have a responsibility to regional communities, and we're holding them to it.

We'll continue to work with regulators, industry and communities to ensure that our regions have access to fit-for-purpose and sustainable banking services over the long term.

This includes a focus on sustainable cash distribution and ensuring that Australians can use cash to pay for essentials if they want to or if they need to.

This bill will help prevent the loss of banking services in the Pacific at the same time as we're rolling out our domestic agenda, and the Pacific agenda is vital to the security and economic development of our region.

We know that we can't, in this one bill, solve every aspect of this challenge overnight.

We'll continue to work with the banks and our international partners to address this issue—to make our region safer and more stable; to make sure that loved ones, families and communities can continue to access their money; and to build a better future for the people of the Pacific.

For all those reasons, I'm pleased to present this bill, the full details of which are contained in the explanatory memorandum.

Debate adjourned.