Pacific banks to be boosted with federal funding

Poppy Johnston and Andrew Brown |

Treasurer Jim Chalmers has announced funding to help shore up Pacific banking.
Treasurer Jim Chalmers has announced funding to help shore up Pacific banking.

Australia will help bolster Pacific banking services to ensure financial infrastructure does not shut down throughout the region.

Treasurer Jim Chalmers has unveiled $6.3 million in federal funds to 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.

“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.

Dr Chalmers outlined the plan while giving an address at the Pacific Banking Forum in Brisbane on Tuesday.

The two-day event 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.

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 state-owned Bank of China, after Bendigo & Adelaide Bank announced it was pulling out by December this year.

Opposition foreign spokesman Simon Birmingham said the 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