This bill became law on Sep 5th, 2025.
Budget, tax & economy
The bill lets Commonwealth money be used to meet liabilities if the government gives a Pacific banking guaranteeA Commonwealth guarantee for an Australian-headquartered ADI’s banking business in the Pacific region, granted under section 60 of the PGPA Act. to an eligible Australian-headquartered bank.
The government introduced the bill because Pacific countries were losing cross-border banking links that connect people, businesses and governments to foreign currency, international payments, trade, aid and remittancesMoney sent across borders, often by workers in Australia to family or communities in Pacific countries.. The bill gives the Commonwealth a standing appropriation so it can honour guarantees offered to Australian-headquartered banks that keep operating in the Pacific, with the government arguing this lowers the risk of those banks withdrawing from the region.
The bill sits at the intersection of Pacific development policy, regional security and banking regulation. The immediate problem was the decline of correspondent banking in the Pacific; the policy response was to use Commonwealth guarantees to help Australian banks stay in the region while broader work continues on digital identity, compliance systems and payment infrastructure.
No party represented in the collected debate opposed passage of the bill, but several speakers argued that the guarantee power needed stronger transparency, oversight and safeguards against unintended effects in Pacific banking markets.
Daniel Mulino MP introduced this bill. It passed on the voices.
Did it become law?
Yes
Became law 05 Sept 2025
Final passage
Passed without a counted vote
Members called out ‘aye’ or ‘no’ — no individual votes were recorded.
Passage speed
43 days
From introduction to the latest recorded parliamentary step
Meaning
The bill lets Commonwealth money be used to meet liabilities if the government gives a Pacific banking guaranteeA Commonwealth guarantee for an Australian-headquartered ADI’s banking business in the Pacific region, granted under section 60 of the PGPA Act. to an eligible Australian-headquartered bank.
A guarantee only counts under the Act if it is granted under section 60 of the Public Governance, Performance and Accountability Act 2013The Commonwealth financial management law. The guarantee must be granted under section 60 of this Act to qualify as a Pacific banking guarantee., relates to the bank’s Pacific banking business, and the bank is headquartered in Australia.
The Pacific regionFor this Act, the islands of the Pacific, Papua New Guinea and Timor-Leste. is defined broadly for this Act, covering the islands of the Pacific, Papua New Guinea and Timor-Leste.
The government’s stated aim is to keep Pacific countries connected to cross-border banking, international payments, trade, aid flows and remittancesMoney sent across borders, often by workers in Australia to family or communities in Pacific countries. as correspondent banking services withdraw from the region.
The special appropriationA standing legal authority to spend Commonwealth money for a defined purpose, instead of waiting for a yearly appropriations bill each time a payment may be needed. has no direct dollar limit or fixed end date in the Act, but the explanatory memorandum says each guarantee would have its own dollar limit and most are expected to run for 10 years.
Ministers described the guarantee as a paid guarantee rather than a subsidy, saying eligible Australian banks would pay a fee and that a default claim was unlikely.
The Bill provides that the Consolidated Revenue Fund is appropriated for the purpose of meeting any liabilities that the Commonwealth may incur under a Pacific banking guarantee entered into with an Australian-headquartered ADI operating in the Pacific region.Pacific Banking Guarantee Bill 2025 explanatory memorandum
A guarantee with an ADI is a Pacific banking guarantee if: (a) the guarantee is granted to the ADI on behalf of the Commonwealth under section 60 of the Public Governance, Performance and Accountability Act 2013; and (b) the guarantee relates to the ADI’s banking business ... in the Pacific region; and (c) the ADI’s headquarters are located in Australia.Pacific Banking Guarantee Bill 2025 introduced text
Pacific region includes: (a) the islands of the Pacific; and (b) Papua New Guinea; and (c) Timor-Leste.Pacific Banking Guarantee Bill 2025 introduced text
The Pacific region has experienced some of the fastest declines in cross-border banking services globally, reducing the ability to conduct trade and receive aid financial flows. Remaining connected to the global financial system is one of the highest priorities for Pacific nations.Pacific Banking Guarantee Bill 2025 explanatory memorandum
The special appropriation does not have a direct dollar-figure limit ... any guarantee provided by the Commonwealth would be subject to a specified dollar-limit ... The appropriation is not time-limited ... It is expected that in most cases this will be for a 10-year period.Pacific Banking Guarantee Bill 2025 explanatory memorandum
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.Minister’s second reading speech
Context
The bill sits at the intersection of Pacific development policy, regional security and banking regulation. The immediate problem was the decline of correspondent banking in the Pacific; the policy response was to use Commonwealth guarantees to help Australian banks stay in the region while broader work continues on digital identity, compliance systems and payment infrastructure.
Pacific banking links keep shrinking
Coalition speakers cited a sharp fall in South Pacific correspondent banking relationships since 2011, while the explanatory memorandum said the Pacific had experienced some of the fastest global declines in cross-border banking services.
Explanatory memorandum and House debate ↗Pacific finance ministers raise banking access
The minister’s second reading speech said the withdrawal of banking services was discussed with counterparts at the Pacific Islands Forum Economic Ministers Meeting in the previous year.
Minister’s second reading speech ↗ANZ guarantee becomes the first test case
Speakers in debate said ANZ had been announced as the first expected recipient of a Pacific banking guaranteeA Commonwealth guarantee for an Australian-headquartered ADI’s banking business in the Pacific region, granted under section 60 of the PGPA Act., with a maximum value of $2 billion over 10 years, subject to passage of the legislation.
House and Senate Hansard debate ↗Government reintroduces Pacific banking guaranteeA Commonwealth guarantee for an Australian-headquartered ADI’s banking business in the Pacific region, granted under section 60 of the PGPA Act.
The bill was introduced in the House of Representatives to create the appropriation needed for Pacific banking guarantees after the previous Parliament had ended.
APH bill page ↗Senate sends bill to economics inquiry
The Senate referred the bill to the Senate Economics Legislation Committee, with a report due on 21 August 2025.
APH bill page notes ↗Debate focuses on transparency and local banks
Senators supporting passage still raised concerns about the uncapped appropriation, confidential guarantee terms, and whether guarantees for Australian-headquartered banks could disadvantage Bank South PacificA major Pacific bank mentioned in debate by speakers concerned that Australian-backed guarantees could affect local Pacific banking competition. or other local Pacific banks.
Senate Hansard debate ↗Pacific banking guaranteeA Commonwealth guarantee for an Australian-headquartered ADI’s banking business in the Pacific region, granted under section 60 of the PGPA Act. becomes law
Royal Assent turned the bill into the Pacific Banking GuaranteeA Commonwealth guarantee for an Australian-headquartered ADI’s banking business in the Pacific region, granted under section 60 of the PGPA Act. Act 2025, and the Act commenced the next day.
APH bill page and Federal Register of Legislation ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step. For this bill, the Federation Chamber reported back later the same day and the House then completed its remaining formal steps that day.
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
Second reading debate
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The bill reached this recorded parliamentary step. The official House record shows the referral out and return both happened on the same day, before the House moved to its final formal votes.
Reported from Federation Chamber
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The Senate referred the bill to the Senate Economics Legislation Committee, with a report date recorded as 21 August 2025.
Referred to committee
APH bill page notesThe bill reached this recorded parliamentary step.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
The Governor-General gave Royal Assent, turning the bill into an Act.
Key criticism
No party represented in the collected debate opposed passage of the bill, but several speakers argued that the guarantee power needed stronger transparency, oversight and safeguards against unintended effects in Pacific banking markets.
The criticism was mainly about risk control and disclosure, not about abandoning the goal of keeping Pacific banking services available.
Uncapped appropriation and taxpayer risk
Coalition and Greens speakers supported passage but objected that the Act creates a special appropriationA standing legal authority to spend Commonwealth money for a defined purpose, instead of waiting for a yearly appropriations bill each time a payment may be needed. without a direct dollar cap or end date, leaving future guarantees dependent on executive decisions and individual guarantee terms.
Limited transparency about guarantee terms
Greens and Coalition speakers argued that more details should be public, including guarantee values, coverage, fees and compliance with obligations, rather than relying heavily on commercial confidentiality.
Possible disadvantage for Pacific-owned banks
Several speakers warned that guarantees available only to Australian-headquartered banks could give those banks an advantage over Bank South PacificA major Pacific bank mentioned in debate by speakers concerned that Australian-backed guarantees could affect local Pacific banking competition. and other Pacific institutions unless the government consults and monitors competitive effects.
Further sources
Votes
The bill passed both chambers on the voices, so there is no list of individual Aye and No votes for final passage.
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Senate agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Parliamentary debate
Start here — lead voices
Daniel Mulino reintroduced the bill, saying it would help prevent the loss of banking services in the Pacific by allowing the Commonwealth to guarantee eligible Australian banks’ Pacific operations.
Read in Hansard ↗Michael McCormack supported bipartisan engagement with the Pacific and linked the bill to remittancesMoney sent across borders, often by workers in Australia to family or communities in Pacific countries., labour mobility and the practical need for Pacific workers and families to access reliable banking.
Read in Hansard ↗Pat Conroy supported the bill as part of the government’s Pacific policy, arguing that banking access, remittancesMoney sent across borders, often by workers in Australia to family or communities in Pacific countries. and financial links are important to Pacific stability and Australia’s regional relationships.
Read in Hansard ↗Nick McKim said the Greens would support the bill but criticised its limits to Australian-headquartered banks, the uncapped guarantee exposure and the lack of statutory transparency for guarantee terms.
Read in Hansard ↗All speeches by bloc
12 speakers · 13 contributions · 12 support
Hansard records 2 separate contributions by Pat Conroy on this bill. They are grouped here so the speaker is listed once.
Second reading speech
Pat Conroy supported the bill as part of the government’s Pacific policy, arguing that banking access, remittancesMoney sent across borders, often by workers in Australia to family or communities in Pacific countries. and financial links are important to Pacific stability and Australia’s regional relationships.
“This bill is part of our commitment to our Pacific neighbours.”Read this contribution in Hansard ↗
Second reading speech
Pat Conroy supported the bill as a practical part of Australia’s Pacific partnership, arguing that banking, aviation and infrastructure services underpin regional growth and prosperity.
“The Pacific is our home. It is in our interest to foster a resilient, connected region”Read this contribution in Hansard ↗
“I rise in support of the Pacific Banking Guarantee Bill 2025.”Read the full speech in Hansard ↗
“I rise today in firm support of the Pacific Banking Guarantee Bill 2025.”Read the full speech in Hansard ↗
“The continuing decline in access to cross-border banking services in the Pacific region and the reduction of Pacific operations by Australian banks are concerns shared by our government and by governments of our regional neighbours.”Read the full speech in Hansard ↗
“Nauru, like many other nations in the Pacific, faces the possibility of being left without a bank and, with that, losing access to the global economy.”Read the full speech in Hansard ↗
“this bill may look like a simple technical banking measure, really it’s about something much larger. It’s about keeping the Pacific connected to the world”Read the full speech in Hansard ↗
“I am pleased to be able to speak on the Pacific Banking Guarantee Bill 2025 today.”Read the full speech in Hansard ↗
“This bill will help secure access to banking services across the Pacific.”Read the full speech in Hansard ↗
“This bill will assist eligible Australian banks to maintain their Pacific operations by providing a guarantee”Read the full speech in Hansard ↗
“Today I am proud to re-introduce the Pacific Banking Guarantee Bill 2025.”Read the full speech in Hansard ↗
“Today I am proud to reintroduce the Pacific Banking Guarantee Bill 2025.”Read the full speech in Hansard ↗
“Australia is responding to the concerns of Pacific and Timor-Leste governments by introducing the ability for the Commonwealth to provide guarantees to eligible Australian banks”Read the full speech in Hansard ↗
7 speakers · 8 contributions · 7 mixed
Hansard records 2 separate contributions by Michael McCormack on this bill. They are grouped here so the speaker is listed once.
Second reading speech
Michael McCormack supported bipartisan engagement with the Pacific and linked the bill to remittancesMoney sent across borders, often by workers in Australia to family or communities in Pacific countries., labour mobility and the practical need for Pacific workers and families to access reliable banking.
“The Pacific Banking Guarantee Bill 2025 is an important piece of legislation.”Read this contribution in Hansard ↗
Second reading speech
Michael McCormack supported the bill’s purpose but said questions remained about taxpayer exposure, the lack of a clear cap or end date, and how the guarantee would interact with remittancesMoney sent across borders, often by workers in Australia to family or communities in Pacific countries. and Pacific workers.
“There are, however, some questions that need to be answered.”Read this contribution in Hansard ↗
“I do so in support of its broad objectives, but also with some concerns about its transparency and the adequacy of its guarantees.”Read the full speech in Hansard ↗
“we definitely support the bill in principle. We support the intentions of the bill. However, we believe it needs to go to the Senate Economics Legislation Committee”Read the full speech in Hansard ↗
“we do have some concerns about the risk to Australian taxpayers from an uncapped liability with no maximum dollar amount and no end date”Read the full speech in Hansard ↗
“While the coalition will not oppose this bill, referring the legislation to the Senate Economics Legislation Committee is crucial.”Read the full speech in Hansard ↗
“while we will not oppose the bill, it should go to the Senate Economics Legislation Committee”Read the full speech in Hansard ↗
“the coalition will be providing bipartisan support for the passage of this bill”Read the full speech in Hansard ↗
1 speaker · 1 mixed
“The Greens will be supporting the Pacific Banking Guarantee Bill 2025.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Referred to Federation Chamber
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
House · Reported from Federation Chamber
Reported from Federation Chamber
The bill reached this recorded parliamentary step.
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Senate · Committee of the Whole debate
Committee of the Whole debate
The bill reached this recorded parliamentary step.
Senate · Committee of the Whole debate
Committee of the Whole debate
The bill reached this recorded parliamentary step.
Senate · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
Assent · Assent
Assent
The Governor-General gave Royal Assent, turning the bill into an Act.
Senate Economics Legislation Committee
Referred to committee
The Senate referred the bill to the Senate Economics Legislation Committee, with a report date recorded as 21 August 2025.
Referred to Committee (31 July 2025): Senate Economics Legislation Committee; Committee report (21 Aug 2025)
APH bill page notes
