The Prime Minister today addressed leadership of Australia’s financial institutions and regulators at the Financial Services Hub Summit in Sydney.
The purpose of the summit is to discuss new opportunities for the Australian financial services sector and to chart a path forward for government and industry to ensure that Australia’s financial services sector is amongst the most competitive in the world.
The Rudd Labor Government wants to secure Australia’s reputation as a ‘financial services hub’ and is committed to doing so by consulting widely with industry and ensuring that the diverse range of ideas canvassed are considered and implemented promptly.
The Prime Minister emphasised that although the financial services sector is globally integrated and therefore not immune to volatility and uncertainty, Australia is well equipped to endure such developments. He outlined strengths of the Australian financial services sector including:
- A strong, well-regulated banking sector
- Australian banks’ strong balance sheets compared with their global counterparts
- Strong corporate balance sheets in general
- A strong budget surplus to act as a buffer to forthcoming challenges
- A comprehensive program of long-term economic reform
- Government steps to strengthen Australia’s financial markets
- Presence at international forums such as the Financial Stability Forum and the IMF to address liquidity and transparency in the global financial system
The Prime Minister expressed his disappointment at the failure of members to reach an agreement in the Doha Round of WTO negotiations.
The Prime Minister acknowledged the export potential of Australia’s financial services sector. Globally it is worth more than $150 billion per year with trade growing at an average annual rate of 17 per cent.
Regionally, Australia is well positioned to take advantage of the increase in volume and frequency of the movement of capital, the growing middle-classes and ageing populations of neighbouring Asia-Pacific countries.
Nationally, the Federal Government is implementing a range of key initiatives in tax, deregulation, education, infrastructure and overseas market access including:
- Cutting withholding tax rates for established real estate investment trusts to 7.5 per cent by 2012-11 (from 30 per cent).
- Implementing the reform agenda to build a seamless national economy through consistent, national regulation of credit products through the COAG Business Deregulation and Competition Working Group.
- Investing $62 million in educating students with Asian language skills to address the need for these skills in the sector.
- Conducting the Bradley Review of Higher Education to examine the responsiveness of the higher education sector to meet student and employer demands.
- Facilitating greater access to overseas markets by negotiating agreements to reduce market barriers with other countries such as the USA, China and Japan.
- Securing approval as an investment destination under the Chinese Qualified Domestic Institutional Investor Scheme
- Pursuing mutual recognition agreements to secure improved access to the Hong Kong market
- Working with the Chair of the US Secretaries and Exchange Commission to develop mutual recognition of securities regulation in the near future
- Signing an agreement of mutual recognition of securities offerings with New Zealand
The Federal Government will also establish a dedicated team within the Treasury to be a single point of contact for the sector and to take charge of the financial services agenda for the Government. The team will coordinate policy initiatives including ongoing work with industry organisations such as IFSA, the ABA and the Insurance Council as well as individual businesses. The team will report to the Financial Sector Advisory Council.
The Prime Minister further announced that:
- taxation issues raised by industry will be considered by the Henry Review and the Board of Taxation’s review of tax arrangements applying to managed investment trusts; and
- the Government will actively promote Australia’s financial services sector by leading a ‘roadshow’ to key Asian economies.
New Secretary of the Attorney General’s Department
The Prime Minister also announced the appointment of Mr Roger Wilkins AO as the new Secretary of the Attorney General’s Department taking over from Mr Robert Cornall AO. Mr Wilkins has recently completed a Strategic Review of Climate Change Programs for the Government and currently heads the Government and Public Sector Group, Australia and New Zealand, at Citi. He was Director-General of the New South Wales Cabinet Office from 1992 until 2006.
The media release on the Summit is available here.
The Prime Minister’s speech at the Summit is available here.
The media release on the new Secretary of the Attorney General’s Department is available here.