Pacific Banking Guarantee Bill 2025; Second Reading

Continued the debate

Mulino argued that the bill would assist in obtaining banking services throughout the Pacific and ensure the region stays linked to the global financial system. Mulino stated that the legislation allows the Commonwealth to guarantee Australian banks' Pacific operations against the unlikely possibility of default, with eligible banks paying a fee rather than receiving a subsidy. Mulino highlighted that this measure complements other efforts, including working with major banks to maintain their presence and developing digital identity infrastructure. Mulino emphasised that the bill is part of a broader strategy to restore trust and rebuild relationships with Pacific partners.

Government response

Mulino noted that the Pacific had seen correspondent banking services pulled back more quickly than in any other part of the world, risking isolation from the global financial system. Mulino explained that the guarantee is a necessary change to ensure Pacific communities can bank with confidence, although it is highly unlikely to be needed. The minister also referenced progress in securing banking operations in Nauru and agreements with ANZ and Westpac to maintain their regional presence. Mulino linked these efforts to domestic initiatives, such as the moratorium on branch closures in regional Australia.