More than $6 million in Commonwealth funds will be used to bolster financial security in the Pacific to ensure banking services don’t close down.
Treasurer Jim Chalmers used an address to the Pacific Banking Forum to announce $6.3 million would address banking closures and urge Australian lenders to stay open abroad.
“The message we are sending today to the entire Pacific family is clear: you can bank on us,” he said in Brisbane on Tuesday.
“Australian banks like Westpac and ANZ provide vital … services to the region and have been in the Pacific for more than a century.”
The extra funding will go toward developing digital identity infrastructure among Australia’s neighbours and enhancing compliance with anti-money laundering and counter-terrorism financing requirements.
The forum was a key outcome of last year’s meeting between US President Joe Biden and Prime Minister Anthony Albanese.
Co-hosted by Canberra and Washington, 300 people – Pacific leaders as well as representatives from commercial banks and international organisations, such as the International Monetary Fund – are taking part.
Of the federal funds being spent, $2.9 million would go to the World Bank to help develop digital infrastructure in Pacific nations, while $1.7 million would help boost compliance with anti-money laundering requirements.
It comes as the head of Australia’s anti-money laundering regulator said work was ongoing in the Pacific on financial intelligence.
AUSTRAC’s chief executive Brendan Thomas told the National Press Club boosting capacity was critical in the region.
We are doing everything we possibly can to strengthen their arm, increasing capability, give them technology if they need the technology and provide professional development for the Pacific financial intelligence units,” he said.
“It is a good thing for us to do to help our neighbours become stronger and a good thing for us today because we can stop the flows of money coming to Australia if we have a stronger Pacific.”
The treasurer said Australia would do all it could to help Pacific countries connect with global financial systems.
“The key to any lasting solution to the decline of services is rebuilding robust financial markets infrastructure across all Pacific nations, and so that’s what we’re targeting,” he said.
“We know how critical these services are for local communities, which is why we have been actively talking to all the major Australian banks, to let them know how important a continued Australian banking presence in the region is to the government.”
Security concerns have also been linked to the decline in bank services, with China’s moves in the region ever-present in the background.
Last April, Nauru, which uses Australian dollars as its currency, signed a memorandum of understanding with the state-owned Bank of China, after Bendigo & Adelaide Bank announced it was pulling out by December – but the bank has since extended that to June 2025.
Opposition foreign spokesman Simon Birmingham said the talks at the forum were crucial to developing ties across the Pacific.
“I want to see Australia working with international partners and particularly the Pacific Island nations, to come up with Pacific-led solutions that give them strong, credible banking systems,” he told Sky News.
“Having local, available, accessible banking services that can be depended upon and are of high quality, it’s also very essential to the operation of your economy, your country, your household at all different levels.”
– AAP
