An Australian covered bond bill passed in the House of Representatives today (Wednesday) after gaining support from government and opposition politicians.

Joe Hockey

The Banking Amendment (Covered Bonds) Bill 2011 was introduced by Treasurer Wayne Swan last month.

On Tuesday Joe Hockey, treasury spokesperson for the Liberal Party that leads the opposition coalition, said that it had raised the issue last year.

“The coalition will support the initiative because we are the ones that suggested the policy,” he said in a debate on a controversial carbon tax that was also passed today. “If it needs to be done quickly we will help to expedite that.”

However, the Greens’ banking spokesperson, Adam Bandt, opposed it, saying that the covered bond bill will shift risks to depositors and taxpayers, and benefit the country’s big four banks at the expense of smaller financial institutions.

“Australian depositors are currently at the top of the list if a bank goes under and claims are made on bank assets,” said Bandt. “This bill will knock depositors off the top.”

The bill will now have to pass in Australia’s Senate.