Coalition Senators' additional comments

1.1The Coalition strongly supports the intention of this Bill, due to the importance of maintaining Australian banking in the Pacific, but we would like to place the following matters on record.

1.2The Coalition notes the concerns of Bank South Pacific that they were unable to assess the likely impacts on competition given the confidential nature of the guarantee agreements.

1.3Coalition Senators encourage Treasury to reconsider whether there is more information from the guarantee agreement that could be made publicly available.

1.4It seems that there are parts of the agreement considered confidential that do not necessarily need to be and could alleviate the concerns of Bank South Pacific if it was made available.

1.5Additionally, Coalition Senators are not convinced by Treasury’s justification for why the appropriation needs to be uncapped.

1.6We note the evidence from Treasury that 173 uncapped special appropriations exist, usually covering narrow spending programs, though some extend to very large contingent liabilities such as the bank deposit guarantee.

1.7While there are many, it is still appropriate to ask whether an uncapped appropriation is appropriate for the Pacific Banking Guarantee.

1.8It was argued that flexibility is needed for future guarantees negotiations, however an uncapped appropriation inevitably reduces parliamentary oversight of future spending and increases potential liabilities from future guarantees.

1.9It is not obvious why a reasonable threshold would undermine the ability of the government to enter future guarantees - especially given ANZ is the largest operator in the region and has received a $2 billion 10-year guarantee.

1.10However, we accept the evidence from Treasury that the risk to Australian taxpayers from these guarantees is ‘very low’.

Senator the Hon Jane Hume

Deputy Chair

Liberal Senator for Victoria