Pacific Banking Guarantee Bill 2025

High-Level Summary
The bill proposes to establish a Pacific banking guarantee, allowing the Australian government to back liabilities incurred by Australian banks operating in the Pacific region, thereby ensuring their continued presence and stability in these markets.

Summary
The Pacific Banking Guarantee Bill 2025 appropriates funds from the Consolidated Revenue Fund to meet liabilities the Commonwealth may incur under a Pacific banking guarantee. This guarantee aims to support Australian Authorised Deposit-taking Institutions (ADIs) in the Pacific, ensuring they remain connected to the global financial system. The bill provides an unlimited special appropriation, granting the Commonwealth flexibility to negotiate guarantees with ADIs. These guarantees will be legally binding agreements, covering low-risk exposures to encourage banks to reinvest in their Pacific operations. The bill includes no human rights implications and has a nil compliance cost impact. It is set to commence on 1 July 2025, with each guarantee expected to last up to 10 years.

Argument For
Normative Bases
  1. Pro-Democracy
  2. Utilitarian Ground Truth
  3. National Prestige/Patriotism

The bill strengthens economic stability and development in the Pacific region, which is crucial for maintaining democratic governance and social order. Supporting Australian banks ensures they can continue providing essential financial services, thereby fostering economic growth and prosperity, which aligns with utilitarian principles of maximizing well-being [Judgment]. Additionally, the bill enhances Australia's reputation and influence in the region, reinforcing national prestige and fostering stronger diplomatic ties.


Argument Against
Normative Bases
  1. Propertarianism
  2. Egalitarianism

There is a concern that the bill may prioritize the interests of Australian banks over the broader needs of Pacific communities, potentially leading to unequal economic benefits. By focusing on protecting banks, there is a risk that the bill could neglect more equitable solutions that address the root causes of financial instability in the region. Additionally, the unlimited appropriation of funds for guarantees may divert resources from other critical areas of need, such as healthcare or education, thereby challenging egalitarian principles [Judgment].


Date:

2025-07-24

Chamber:

House of Representatives

Status:

Before Senate

Sponsor:

Unspecified

Portfolio:

Treasury

Categories:

Trade Policy, Financial Regulation, Foreign Policy

Timeline:
24/07/2025
28/08/2025

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