Clear Signals Needed as to What Is in the National Interest

Federal Treasurer Wayne Swan needs to be clear and open about why the merger between the ASX and the Singapore Stock Exchange is not in the national interest, should the government decide to reject the proposal, the BCA says.

“At a time when increasing ties with fast-growing emerging Asian countries is supporting our growth potential, the integration of Australia’s capital markets into the region will offer significant opportunities,” Graham Bradley, BCA President, said.

“These include lower costs for businesses, greater choice and more skilled jobs. It is essential that Australia seeks to maximise these benefits through policies that signal openness to investment and that are clear and predictable in their application.

“The merger of the Australian and Singapore exchanges has the potential to help Australia’s efforts to become a financial centre.

“What is important is that the government, in promoting Australia as a financial centre, is clear about the principles and policies it intends to pursue in achieving this objective.

“If the Treasurer decides that the potential benefits are outweighed by the merger not passing the national interest test then he needs to be open and clear about the reasons for it failing this test,” Mr Bradley said.

In commissioning the Johnson report on Australia as a Financial Centre, the government stressed the aim was to ensure Australia’s policy settings allowed the financial sector to take full advantage of business opportunities in the region. 

It also noted that successful expansion into global markets requires an ongoing dialogue between government and the financial sector. 

Such a dialogue must occur on a clear and transparent basis. It also needs to be underpinned by policies which support flexibility and provide the right incentives.

“We must recognise and continue to embrace the central importance of foreign investment to Australia’s growth prospects,” Mr Bradley said. 

“Australia’s approach has always been to welcome foreign investment recognising that it has helped build our economy and enhanced the wellbeing of Australians. 

“At this time, we should not underestimate the importance of sending consistent signals to international investors about Australia being open for business.

“A challenge for all governments and members of parliament is to build public support for policies and policy settings that welcome foreign investment from a diverse range of investors,” he said.