Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise to speak on the Pacific Banking Guarantee Bill 2025. This bill is designed to ensure that Australian banks remain engaged in the Pacific financial sector, thereby preserving Australia's strategic presence in a region where China's influence continues to grow. By maintaining essential banking services for trade and remittances, the objective of the bill is to prevent further isolation of Pacific nations from global financial systems and help safeguard regional prosperity.

We all want to see a safer Pacific and strong, soft diplomacy ties to it. But clear oversight and transparency measures are needed, because the bill creates an ongoing risk to the taxpayer, with the potential for open-ended liabilities if claims on the guarantee arise. While the coalition will not oppose this bill, referring the legislation to the Senate Economics Legislation Committee is crucial, as this will help identify any necessary amendments and ensure robust protections are in place for Australian taxpayers.

The coalition's track record in the Pacific includes delivering record levels of aid, establishing diplomatic missions in every Pacific Islands Forum country and strengthening maritime security and labour mobility programs. In contrast, the Albanese government's approach appears reactive and has even been blindsided by China's growing presence in the region, highlighting the need for more proactive, long-term strategies. Balancing strategic objectives with fiscal prudence is vital, especially since the bill could expose taxpayers to geopolitical and commercial risk if not properly regulated. A robust national security stance underpins all Pacific engagement, and the coalition's record shows that only a comprehensive, whole-of-government approach can maintain Australia's leadership in the region.

The Albanese government want to deflect the blame for their failures in the Pacific onto the coalition. This government just can't face its own failures. The fact is that, while contestability in the Indo-Pacific has been intensifying for some time, it is under this government's watch that China has been able to extend its influence in our region through a series of security, economic and other agreements with Pacific island nations—some of which, media has reported, have blindsided the government. This has happened while the government, with few exceptions, has not been able to finalise a raft of agreements it has sought with the Pacific island partners. What the Albanese government's record in the Pacific shows is that it is not up to the strategic challenge in the Indo-Pacific. The Albanese government is weak on national security, and only a Dutton Liberal-National government can ensure that Australia is a natural partner of choice for our Pacific family.

The facts show that the coalition delivered record aid into the Pacific in our last budget: some $1.85 billion—$750 million more than in Labor's last budget, which only provided $1.1 billion. In 2021-22, total support to the Pacific, including loans, was $2.7 billion and included security programs, health and financial support. Under the coalition, Australia became the only country to have diplomatic missions in every Pacific Islands Forum country. The coalition doubled the lending capacity of the AIFFP from $1.5 billion to $3 billion, including climate-resilient infrastructure, for the assistant minister opposite, and clean energy projects like Palau Solar, the Tina River project, and off-grid solar in PNG.

The coalition increased our Pacific climate finance to at least $700 million in 2020 to 2025. The coalition's $2 billion Pacific Maritime Security Program delivered 14 out of 21 Guardian class patrol boats, upgraded wharf infrastructure and supported aerial surveillance. The coalition took a whole-of-government approach to supporting our Pacific friends and partners by (1) training defence and security personnel from the Pacific—that's what the coalition did; (2) providing maritime safety security assistance; and (3) implementing a very successful labour mobility program, which Labor has diminished by bowing to its union masters. Those are facts.

In government, the coalition provided-record levels of development assistance to the Pacific and Timor-Leste. We budgeted for an estimated $4.55 billion as official development assistance in 2022-23, up from an estimated $4.46 in 2021-22, an increase under the coalition in our term in government. This included an additional $460 million in official development assistance in 2022-23 for temporary and targeted measures, responding in particular to COVID-19—that global pandemic that those opposite may remember—such as $281 million to address the economic and social impacts of COVID-19 in the Pacific and Timor-Leste, $98.3 million for vaccines in the Pacific and South-East Asia, $61.5 million to support economic recovery in South-East Asia, $13.6 million for Pacific labour mobility and $5.7 million for an ASEAN comprehensive strategic partnership.

We resumed indexation 2½ per cent on the baseline ODA budget in 2022-23, which will see the ODA budget increase over the forward estimates. Our ODA was complemented by a comprehensive package of support to the Indo-Pacific region. This included budget support—Indonesia's $1.5 billion, PNG's $1.14 billion, Fiji's $168.5 million—security assistance and vaccines. Nearly 33 million doses were delivered out of the 60 million committed by the end of 2022. So the Liberal-National coalition had a good record in the Pacific with our neighbouring friends and partners.

In soft power and strategic diplomacy, we increased scholarships to the Pacific with nearly 69,660 Australian students through the New Colombo Plan, and we increased the number of students we sent to gain experience in the Pacific by over 60 per cent. Despite COVID-19 challenges, we resumed Australia's award scholarships in short courses to 27 developing countries with 2,075 granted in 2021-22, including 484 for Pacific scholars, with 4,429 Pacific scholars through Australia's award since 2015—PNG, Solomon Islands and Samoa as top participants. We contributed some $5.4 million over 2017 to 2022 to develop the next generation of women Pacific leaders through targeted workshops and network delivered intensive leadership and mentoring for 126 women from 10 Pacific countries connected with 141 Australian mentors and a range of Pacific leaders.

Again, to close, referring this legislation to the Senate's Economics Legislation Committee is crucial, and the coalition looks forward to supporting that committee process.

Pat Conroy (Shortland, Australian Labor Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I intend to spend most of my time on the substance of the Pacific Banking Guarantee Bill 2025, but I can't let the contribution from the member for Petrie go unchallenged. It was a massive rewriting of history from a person clearly reading notes provided by another minister's office. I would submit to you, Mr Deputy Speaker, the member for Petrie couldn't find Papua New Guinea on a map, quite frankly, and that contribution in this debate demonstrates that. Let's go through some facts here—

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

The minister will resume his seat. On a point of order, the member for Petrie.

Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

It was reflecting on me, abusing me, when there's no need to do that. You should just get on with the actual speech of the minister.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

There's no point of order. The minister has the call.

Pat Conroy (Shortland, Australian Labor Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I was reflecting on the great policy ignorance and policy failure of those opposite on Pacific matters in their almost 10 years in government. Let's go through some of their highlights. The member for Petrie talked about ODA. Their first budget cut ODA by $65 million, as part of an $11.8 billion cut to ODA in their first budget, which had a demonstrably negative effect on our standing in the world. Their inaction and positive opposition to action on climate change made it so much harder for Australia to build rapport in the Pacific. Who can forget the now Leader of the Opposition's hot mic moment when he made jokes about climate change wiping out Pacific islands? That demonstrably made Australia less safe by imperilling relationships in the Pacific. Who can forget former prime minister Scott Morrison's bullying behaviour at the Pacific Islands Forum leaders week, Tuvalu, where his actions were so demonstrably counter to our interests that then Fijian prime minister Bainimarama said his behaviour was 'very insulting' and 'condescending' and pushed the Pacific towards China. Those are direct quotes from then prime minister Bainimarama of Fiji. Who can forget the Solomon Islands-China security pact that the last government allowed to happen under their watch—the most disastrous foreign policy failing of any Australian government since World War II? So committed are they to the Pacific, what was the foreign minister at the time, Senator Marise Payne, doing when that security pact was being discussed in the Solomon Islands? Was she getting on a plane to go and try and persuade the Sogavare government not to enact it? No. Was she even making phone calls to the Sogavare government to persuade them? No. She refused to make phone calls. She was handing out on prepoll in my electorate of Shortland instead of doing her day job of getting on a plane and trying to persuade the Solomon Islands government not to do that security pact with China.

The last government's, the coalition government's, record on the Pacific is appalling. It condemns them. It demonstrates they are unfit to govern because they can't be taken seriously on national security or foreign policy. That's notwithstanding some very enthusiastic members on the other side, and I do acknowledge the deep interest of the member for Riverina, my shadow minister, who is an enthusiastic advocate for close relations with the Pacific. I acknowledge that. Unfortunately, he is few and far between compared to people like the member for Petrie and the opposition leader, who instead make jokes about climate change and refuse to do the hard yards.

The truth is that the Pacific is our home. It's in our interest to foster a resilient, connected region that enables our economies to grow and our peoples to prosper. The Albanese government has brought new energy and ambition to revitalise our Pacific partnerships after a decade of neglect. We are using all tools of statecraft, including security cooperation, development cooperation and people-to-people links, to that end. We're also supporting the services that underpin economic growth, like banking, aviation and critical infrastructure. Pacific countries look to us first for support. That is what good neighbours do. We're also facing a more uncertain strategic and international environment. As both the foreign minister and I have remarked, we are in a permanent contest in the Pacific, and there has been a transformational change in Australia's approach to the Pacific since we were elected in 2022. We've signed landmark treaties with both Tuvalu and Nauru, creating a safer region and advancing our position as the security partner of choice. We've strengthened cooperation with Papua New Guinea through our bilateral security agreement and the innovative National Rugby League deal, and both of these are underpinned by shared strategic trust. We've also been getting the relationship with the Solomon Islands on a better footing by helping build its police force, and this confirms our position as the security partner of choice for the Solomon Islands. Our view is that regional security is the responsibility of the Pacific, and we've been working to put this into practice through the Pacific Policing Initiative, which will enable regional police teams to deploy quickly on request, as well as the Pacific Response Group.

We're building a proud track record of assisting one another after natural disasters. Most recently we worked to support Vanuatu after its earthquake, getting rescue and humanitarian teams on the ground within 24 hours of Vanuatu's request. But we also 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 response, and I acknowledged the bipartisan response there. We're working hard to support every Pacific country to have an undersea telecommunications cable by the end of 2025 to bolster economic growth and connectivity, 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 for rugby league in PNG, rugby union in Fiji, netball across the Pacific or soccer in Vanuatu and the Solomon Islands.

We're increasing the number of Pacific workers in Australia under our labour mobility scheme. This is resulting in higher remittance flows to the region and fills vital worker shortages in regional Australia while, at the same time, increasing protection and welfare measures for those Pacific workers—a very solemn responsibility we take seriously. We're also creating the first ever Pacific permanent migration pathway through the Pacific engagement visa, responding to a longstanding request from our Pacific partners.

Our engagement with the Pacific is underpinned by the government's recognition that climate change is the top concern of the Pacific, and our commitment to climate change action has enabled us to build transformational relationships in the region. For example, our landmark Falepili Union treaty with Tuvalu responds to Tuvalu's position at the front line of the climate crisis. Recognising this has enabled us to unlock greater security cooperation.

This bill 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 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 disproportionately 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. At a national level, banking services mean governments and businesses can engage in international trade, can progress projects for infrastructure and essential services and maintain and grow their economies. At a local level, banking services allow people to start up new businesses and 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 now how transformative remittances can be.

Under the Pacific Australia Labour Mobility, or PALM, 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 scheme workers are, on average, sending $1,500 per month home to their families and communities. I've visited many communities throughout Timor-Leste and the Pacific 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.

Banking services are essential in supporting remittances and fund transfers between people, organisations, businesses and nations. Australia and our Pacific partners want to avoid a 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 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—and we're committed to doing our part to contribute to this vision.

For over 140 years, Australian banks have been partners to the Pacific region. Today, three Pacific nations use the Australian dollar as their national currency, underscoring our economic interdependence. But banks are not just financial intermediaries; they're symbols of our commitment to the region and they're a key to stronger trading and investment relationships between us and our Pacific neighbours.

Our presence in the Pacific ensures that our neighbours can stay connected to their global financial system and experience secure, reliable and higher quality services. I've engaged directly with Pacific leaders and Australian banking executives to find ways to ensure 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 the Pacific is a robust financial system mitigates financial crime risks and supports economic resilience. A financially stable Pacific benefits Australia too.

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

I also acknowledge ANZ's commitment to remaining in eight Pacific markets in Timor-Leste. ANZ has been in the Pacific for 140 years. The guarantee 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. ANZ 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.

I also acknowledge and thank Westpac for their continued presence in the Pacific. Having three banks active in the Pacific, committed to those markets, improves services in the Pacific and improves our relationship with the Pacific.

Supporting the Pacific Banking Guarantee Bill 2025 is how members here today can also 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 to banks exiting the Pacific. This includes helping to build digital identity infrastructure in seven Pacific jurisdictions; building the capacity of financial intelligence units so that 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—and we're doing this in partnership with the World Bank and the Asian Development Bank; and supporting secure and affordable channels for Pacific workers to remit money—and we're doing this with the New Zealand government and the IMF. This is important in itself.

I'm pleased to be a part of a government progressing this important piece of legislation. We must ensure that Australia remains the partner of choice for Pacific nations. Let us be clear that safeguarding banking services in the financial system is also about underpinning greater economic resilience and security in our region. We're committed to listening and working together with our Pacific neighbours on this issue that matters to us both. That is the principle that underpins all our actions in the Pacific: we turn up, we listen, and we act on the priorities of the Pacific. That leads to greater relationships with the Pacific, and it stands in stark contrast to actions of the last government, particularly of people like the Leader of the Opposition.

This bill is a clear demonstration of our commitment to building stronger Pacific relationships, and I commend the bill to the House.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I thank the member for Shortland, the Minister for International Development and the Pacific, for his kind words about me. I thank him for his actions and involvement with the Pacific. Let's not be partisan about the Pacific. We need statesmen and stateswomen, we need diplomacy, and we need team Australia when it comes to the Pacific. It's too important to allow any other foreign interests or any other incursions into the Pacific. That is why the minister and I have been very firm about what's important to Australia and very firm about what's important to the Pacific island nations we call family and we call friends. He and I would agree that, when it comes to faith, family and football, the Pacific and Australia are as one, and we need to continue, irrespective of who forms the next government. You and I, Deputy Speaker Georganas, have been on overseas trips together before in various delegations. Hopefully we'll get to do that again. When Australian politicians and members of parliament, senators et cetera travel overseas, foreign countries need to see us at our best, and they need to see us speaking as one. When it comes to the Pacific, we need to do just that.

The Pacific Banking Guarantee Bill 2025 is an important piece of legislation. I know just how important the Pacific Australia Labour Mobility scheme is because my electorate benefits from it. The remittances that go back to the Pacific Islands nations—for some of those tiny countries, they are more than half of their gross domestic product. It is something those families back home rely on very much, and it's earned in various capacities. It's horticulture and it's agriculture, but it's more than that. It's so many areas of endeavour. Australia relies on Pacific workers, and those from other international countries besides, to ensure that we can get the jobs done that cannot be filled by Australians—by our own citizens. We very much thank, admire and value the efforts made, particularly by those PALM workers.

It really came home to me when I attended a very sad farewell on Sunday 16 March at the North Wagga Hall. The previous week, a young woman—just 41—passed away. Her name was Tuota Kirition, and she inexplicably passed away at the Teys Meatworks. Teys were very much in there offering support and whatever they could to her family and to her many friends. I was in the front row at that particular memorial service. Sometimes, when you're sitting in the front row, you don't get an appreciation for just how many people are in that hall, but, when I glanced around, the hall—and it's only a small hall—was filled to overflowing. There were more than 400 mourners that turned up. So I want to pay tribute.

It is very much relevant to the topic of debate because she had a 15-year-old daughter back home. She was in Australia, in about her third year working here, and sending the money back to Kiribati. She was sending the money back so that her daughter could have a better life. She was sending the money by banks to ensure that her daughter, her village, her community and her island could have better outcomes. All too sadly, she's passed away in Wagga Wagga. It struck me so vividly that, at the end of the service, her female friends and all the women there were virtually moved to one side of the hall, and the men—big, robust men as they were—had prepared the food. They moved the chairs. They put the tables out. They laid on the feast that followed and allowed the women to mourn. You could see the love and support and family. They weren't all related, but they were all family.

It was a very moving service, and I want to pay tribute to Pastor Jerry Rokosuka and all of the island nations that turned up to farewell Tuota, because it was a moving service. I know her loss will be felt keenly in Kiribati, no more so than by her teenage daughter. Australia is better for having her work on that PALM scheme, for her coming to our city and for contributing what she did. I know XXXX will continue to work with her family, her community and, indeed, all her island friends to make sure that she is remembered and that she is supported, and that is a good thing.

On this Pacific banking guarantee bill, we heard the minister outline the fact that there has been an arrangement struck between the Commonwealth Bank and Nauru when Bendigo withdrew, and we acknowledge that. We acknowledge all the banks which have for many decades operated in the Pacific, because it is important. I know the minister would be interested to hear this, and I know he probably made representations as well when financial institutions—and not necessarily Australian ones—were taking too much of the remittances and it was actually difficult for the people in the island nations to withdraw their money or to have access to that money. I know that he and I would both be as one when it comes to ensuring that the money that was sent back home went straight into the bank accounts and that—but for some minor adjustments—they received full recompense for their labours. That's critically important.

The guarantee covered by this particular legislation supports Australian-authorised deposit-taking institutions—ADIs—operating in the Pacific region to maintain vital banking services there. I know the Minister for Foreign Affairs, Senator Penny Wong, and the former foreign affairs minister Senator Simon Birmingham from South Australia—he and I have travelled to the Pacific together, though we didn't come home in the same state! We went there as team Australia. We went there as one.

Pat Conroy (Shortland, Australian Labor Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

Doing your country proud.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

We were enthusiastic—thank you, minister, we were. I look forward to working closely with the member for Banks in what will, hopefully, be a future coalition government to build upon the work that is being done in this term, to build upon the work—and the minister and I might diverge here—done in the previous coalition government. We did do some good things, and every Australian government, going right back to Howard and, no doubt, even before that, have done good things in the Pacific, because it's too important not to.

While I do respect Minister Wong—and she knows that—I pay acknowledgement to former foreign affairs minister Senator Marise Payne for the work that she did in the step-up campaign. It might not have been to the minister opposite's taste or liking, but she certainly did have her heart in the right place when it came to the Pacific. We all need to—it's not just those who sit in shadow ministry or ministry; every single one of us has an obligation to the Pacific. At every opportunity that we have, we need to bed down those relationships and make sure the Pacific knows—as Prime Minister Anthony Albanese has often said—that we should be their first partner of choice. As the minister noted in his remarks, when disaster strikes, we are there with HMAS vessels, we're there with our men and women in khaki, providing fresh water, providing logistics and providing support. It's very important.

Several Western banks have scaled back or closed Pacific operations in recent years, leaving some nations without reliable access to global financial systems. I know how important our banking relationships are—I met with ANZ Bank representatives in Port Vila on my very first trip to Vanuatu, and I thank them on behalf of the nation for the work that they did. I know that what we need to do is ensure that, with legislation such as this and any other Pacific legislation, the Pacific knows that we are their best friends. We don't want to create opportunities for other nations who have less-than-ideal endeavours or vision for the Pacific than we do as Australia. We need to make sure the Pacific know that we're there for them in finance, infrastructure, funding, aid—and football! Good luck to the Kumuls, and good luck with the future Pacifica team in the National Rugby League.

The ANZ has, as the minister said, been a firm friend of the Pacific. I know NAB has been there. I know Westpac has been there. What we don't want to see is any other nation having an in there that we would otherwise not want them to have. The government has announced partnerships with ANZ, Westpac and Commonwealth Bank of Australia to support their operations in the Pacific. Thank you; that's good. Well done. In exchange for the guarantee, the banks will need to pay a fee to the Commonwealth. That's fair enough. It would guarantee that they would be called on if the banks or their subsidiaries suffered a default for the Pacific operations. It's too important to be suffering defaults. We need to have successful financial operations because it's not only good for the government and Pacific relations; it should be good for the banks. Banks have a responsibility—let's call it a social licence—to do the right thing in the Pacific, because banks make good money. Let's not beat around the bush. When you see the bottom lines that banks produce, they do very nicely, thank you very much, and they do very nicely because of the goodwill of Australian customers. They also do very nicely out in the Pacific, but, if they have to take a bit of a haircut on the Pacific, well, that's just a social licence that they have to continue to operate in Australia when they make the sorts of profit margins that they do. Let me tell you: if the Pacific doesn't go as well as what we would all like, then their profit margins in Australia might well be trimmed. People can read into that whatever they like, but I think our banking sector is smart enough to know exactly what I'm talking about.

By establishing a special appropriation in the Consolidated Revenue Fund, the legislation provides a framework for ensuring an Australian-bank-specific business or guaranteeing it. Its primary objectives—its main purposes—are to uphold banking services, particularly those crucial for trade and remittances, like that PALM money that goes back to Pacific Island nations, and to maintain economic connectivity for Pacific nations. The minister and I both know that this is of vital importance. While officials consider the likelihood of calling on the guarantee to be low, its main purpose is to keep the banks operating in Pacific Island countries where profitability can be challenging. Refer back to what I said before about the social licence to operate. Profitability can be challenging, but we call on those banks. We don't then need them to get all nervous if the profits aren't what they expect—if, indeed, they might have to suffer a little loss. Ultimately, in the long run, we all know that everything will be okay. Everything will be fine. They will make the money, and our PALM scheme will continue to operate. I know the minister and I have had differences of opinions over the number of hours worked and all that, but I think he and I also are as one that PALM needs to operate and needs to continue. It was an invention of the Gillard government, in fact, and we enhanced it and improved it. We certainly know how important those Pacific Australian Labour Mobility workers are to our nation. I say vale to the Wagga Wagga civic worker who died recently. But this is legislation which needs to be passed, and I thank the minister for bringing it to the House.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the Pacific Banking Guarantee Bill 2025 brought to the house by the Treasurer and so nobly spoken about by the Minister for International Development and the Pacific. I do acknowledge the words of the member for Riverina, who I know is a great champion of the Pacific. He mentioned team Australia. I've been on touring delegations with the member for Riverina, and I remember how he took the kava for team Australia and his kind words about the minister, who I know is passionate about the Pacific. He has some dubious rugby league teams that he supports, but nevertheless I recognise his great commitment to the Pacific.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

Good on you, Graham.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I'll take that interjection. At the heart of this bill is Labor's commitment to strengthening our regional ties and to our Pacific family. I use the term 'Pacific family' not in a patriarchal sense but rather as a sibling. I think the Treasurer has the most significant Pasifika community in the country, but, as the member for Riverina touched on, the Pasifika diaspora and Pasifika migrants are scattered right throughout Australia. They are particularly noticeable in our rugby league teams, rugby union teams and netball teams, in fact. But the Treasurer, Jim Chalmers, is particularly engaged with the need for this guarantee. Obviously, coming from the electorate of Rankin, it is personal.

Since coming to office, the Albanese government has been committed to strengthening partnerships in the Pacific, which, sadly, have been trashed by the coalition for nine long years—that wasted decade, in fact. Who could forget the coalition leader joking about our Pacific family members losing their homes due to climate change? Contrast that with the fine words the member for Riverina just delivered. The Minister for Foreign Affairs and the Minister for International Development and the Pacific have travelled extensively, amending the relationships that have become strained during that disastrous decade of coalition government. In fact, Albanese government ministers visited every Pacific Islands Forum nation in our first 12 months in office—something that reflects our commitment to the region.

In August 2023, the government released the milestone International Development Policy. This policy focuses on high-quality support for our neighbours in economic growth, infrastructure development, health care, climate change, gender equality and addressing poverty—all of which contribute to a stable and prosperous region. The International Development Policy operates alongside the Official Development Assistance budget. That shortsighted former coalition government slashed this budget by $11.9 billion. That's right—$11.9 billion. I know that speakers from the coalition have spoken about team Australia and bipartisan support, but you just can't get away with the damage that you do to relationships when you slash $11.9 billion. That is something that the former foreign minister, Julie Bishop, has never publicly apologised for, nor has she been held accountable for the damaging slap in the face delivered to our Pacific neighbours and others.

Labor however recognises the vital and ongoing importance of supporting our neighbours. It makes Australians safer. That's why we've increased the ODA budget by $10.4 billion. The Albanese government has also added $500 million to the ODA budget over the forward estimates for climate change finance for developing countries and for the development of better infrastructure. Labor's responsible economic management will also ensure long-term sustainable growth to the ODA budget via annual indexation of 2.5 per cent.

As mentioned by the Treasurer on Tuesday night, we'll redirect $119 million to the Indo-Pacific region, after the United States cut, effectively, 40 per cent of the world's global aid overnight. I know it's not quite that. They've cut back a little bit on the cutting, but it is incredible to think of the hundreds and thousands of people who lost their jobs and, even more than that, as we know, the lives that have been lost since that decision. Something as simple as keeping people alive with HIV treatment—what would have been 600,000 deaths per year is probably going to be 10 times that over the next five years. People are dying right now because of that decision. Obviously, we can't take up 40 per cent of the world's foreign aid. We can't fill that gap. All the world's other economies can't fill that gap. It's quite significant. But we will support the Pacific in terms of economic health, humanitarian and climate responses wherever we can to try and make up for that and do what we can to look after our patch.

All of these measures indicate Labor's strong commitment to international development but especially to the development in our region. They also highlight this government's focus on reinforcing crucial regional relationships. In times of increasing global insecurity and uncertainty, the relationships we have with our regional partners are vital. We are collectively facing complex geopolitical challenges as we emerge from a global pandemic. We are faced with conflicts, with wars, with humanitarian and economic crises and with that ever-growing grim reality of climate change that everyday Australians see every time they—basically, we see it on our television screens every couple of weeks.

The challenges of climate change are no laughing matter for our Indo-Pacific neighbours, despite the Leader of the Opposition's cruel performance. His flippant comments about the effects of climate change on the Pacific islands laid bare his contempt and lack of understanding of the modern world. What's that saying from Maya Angelou? 'When someone shows you what they are, believe them.' It has been 10 years since that infamous boom mic incident, but the Leader of the Opposition continues to be steadfast in his climate change denial, and he will not come clean about his plans for the 2030 emissions target or the Paris Agreement.

In contrast to the coalition's approach to our regional neighbours, the Albanese government is drawing on all the tools of statecraft, including rugby league, rugby union, netball, football, cricket, and others, I'm sure—I'm seeing some nods from someone who would know—to deepen and strengthen our vital relationships with regional partners. And, just as an aside, I know I'm speaking to a Western Australian deputy speaker, but the rugby league diplomacy that the Prime Minister exhibited on the State of Origin a few years back was a masterstroke—perhaps it something that would never be written by a DFAT official but by a South Sydney Rabbitohs tragic like the Prime Minister—and it was incredibly effective. The Pacific Banking Guarantee Bill is obviously a part of this expanded relationship.

Simply put, this bill will help to provide ongoing access to banking facilities across the Pacific. In recent years, Australian banks have scaled down operations in Pacific countries, and the decrease of correspondent banking services has been faster in this region than anywhere else in the world. Correspondent banking services occur when a financial institution provides banking services to another financial institution in a foreign country. The services provided include cash management, international funds transfer, cheque clearing, trade finance arrangements and foreign exchange services—all crucial to stay connected to the international finance system, particularly when you have the PALM worker scheme, which is, I would suggest, one of our greatest diplomatic engagements with the Pacific.

Connection is necessary for economic growth, financial inclusion and regional stability. The Albanese government's Pacific banking guarantee will ensure the entire region stays connected. The need for this guarantee was discussed when the Treasurer attended the Pacific Islands Forum Economic Ministers Meeting in August last year. In fact, it was the first time in nearly 20 years that an Australian Treasurer had attended such a meeting. The Pacific banking guarantee is not a loan or a subsidy. Instead, the Commonwealth will back eligible Australian banks to continue their operations in the Pacific by providing a guarantee. It places the risk of default on low-risk exposures on the Commonwealth rather than the financial institutions, who, I have noticed, are not exactly struggling.

The participating banks will pay a fee for the arrangement. The bill will implement a special appropriation on the Consolidated Revenue Fund and enable the Commonwealth to pay for the full amount of the guarantee if there is a default. It's unlikely that the guarantee will ever be needed, but it provides additional security and confidence for Australian banks to continue to operate in the Pacific.

The Pacific banking guarantee is a regionwide approach. It is not about any one nation, and it's all about strengthening our Pacific family, as a good sibling should do. The importance of finance to this regional relationship is reflected in the work this government has already undertaken in the sector. I'm talking about progress such as the Commonwealth bank opening in Nauru this year and the development of digital identity infrastructure with the World Bank and Asian Development Bank. We've also supported ANZ and Westpac to continue operations in the Pacific.

It's not just about the banks, though. The Attorney-General's Department has been working with capacity building in Pacific countries in the areas of financial crime protection. This reflects the core tenets of the international development policy, which focuses on genuine partnerships that value consultation, listening, collaboration and respect. Those four terms, again, are consultation, listening, collaboration and respect. Throw in a little bit of culture and food, the occasional shared meal, maybe even a bit of kava—not as much as the member for Riverina consumes—and some sporting links and you have a recipe for a happier Pacific family.

We know what the Pacific is. You can't just go to Noosa and have a swim and say you are involved with the Pacific. That's not diplomacy. You need to do a lot more, as our ministers have shown. The Albanese Labor government's put partnership at the centre of international development, and we respect the different strengths that all our different partners bring to the table.

The Pacific banking guarantee is a necessary, useful and forward-thinking component of our relationship with our Pacific family. It sets the region up for ongoing growth, prosperity and stability. For the last time I say, I commend the bill to the House.

Tim Watts (Gellibrand, Australian Labor Party, Assistant Minister for Foreign Affairs) Share this | Link to this | Hansard source

Let me say what a serendipitous privilege it is for me to be able to follow the member for Moreton in this debate for his last contribution in this chamber. Let me put on the record my deep affection and admiration for GP. This is a man who has made a contribution across so many different aspects of our nation. Importantly to me, he has been a consistent voice for Australia's relations with Africa, a cause that I have spoken about a lot in my time and a cause that needs more voices in this chamber speaking up for it. GP and I have been able to travel all the way to north-western Kenya to the Kakuma refugee camp, which so many members of the Australian community have travelled through on their way to Australia, to really see the impact that our work through both ODA and other arrangements has had there. Travelling with someone in an environment like that you get a sense of the kind of person they are. I won't share with the chamber everything that happened on that trip, GP! But I have to say it is a genuine tribute to the calibre of GP and the regard in which he's held in this chamber that he can inflict so much pain on so many members of this chamber on the sporting fields of Parliament House and still be so beloved. The member for Fremantle and I have both been personally affected by GP's enthusiasm on the sporting field! Good luck, mate. I know you owe it to your family. Let me put on the record our thanks to them for sharing you with us during this time. Good luck in retirement from this place, mate.

I am pleased to be able to speak on the Pacific Banking Guarantee Bill 2025 today. Since the election of the Albanese government, we have committed to a new era of Australian engagement in the Pacific. We have worked hard to deepen the social, cultural and economic connections between Australia and our Pacific family. We have really worked to enmesh our nation with the Pacific family. The foreign minister visited the Pacific on just her fourth day in the role, travelling to Fiji to discuss how we could best secure our region and help to build a stronger Pacific family. The foreign minister visited every member of the Pacific Island Forum in the first year of this government. It was a clear demonstration of the new energy and focus that our government would bring to Australia's Pacific relationships. This was replicated across our government, with visits to the Pacific by the Prime Minister, the Deputy Prime Minister, the Minister for International Development and the Pacific, the Treasurer, the Attorney-General, the Minister for Home Affairs and other ministerial colleagues. When we say we are part of the Pacific family, we mean it. We share an ocean and we share a future.

The connections that Australia shares with our Pacific family—our mutual understanding, common purpose and cooperation—have never been more important. We face the most challenging strategic circumstances of the postwar period. There are major changes reshaping our region and the world—climate change, technological innovation and disruption, geostrategic competition and demographic change. These circumstances demand that Australia work more closely with our international partners to shape the kind of region that we want—a region that's peaceful, stable and prosperous, a region that operates according to agreed rules, norms and international law, where sovereignty is respected and where individual countries are free to make their own choices, and a region where no country dominates and no country is dominated. We can't achieve a region like this on our own. We have to work with others, and it is only becoming more challenging. How we work together with our international partners, with our neighbours, with our Pacific family to meet our shared challenges today will have a great effect on future generations.

The Pacific is at the front line of many of the environmental, geopolitical and economic challenges we confront. Our Pacific neighbours are highly vulnerable to the impacts of climate change, increasing their need to work with us. They also need to look to us first to support their development and economic needs, which can be acute. Responding and providing support is what good partners do.

As the Foreign Minister has said, we are now in a state of permanent contest in the region. We need to work harder to be the partner of choice in the Pacific. Our opportunity to be the only partner of choice was lost to us over the previous decade, when those opposite were in government. The former coalition government cut Australia's overseas development assistance program to the Pacific. They cut official development assistance by $11.8 billion in their time in office—and perhaps later tonight we will see further commitments to cuts in the budget reply speech. This was a drastic drop that made our region less safe, and it left a vacuum in the Pacific for others to fill. Australian security continues to pay a price for the coalition's neglect in government. We now have to compete to become a partner of choice. We have to work at it. That's why the Albanese government has been hard at work implementing our vision for stronger engagement with the Pacific, with our nearest neighbours, with our family.

On that note, I will cede the floor to my colleague the member for Fremantle, in anticipation of this evening's budget reply speech.

Debate adjourned.