Today’s release of the Murray Financial System Inquiry Interim Report reinforces the need for a competitive, stable and well-regulated financial system for Australia’s future prosperity, Business Council of Australia Chief Executive Jennifer Westacott said.
Importantly, the report finds that Australia’s financial system is working well and is broadly competitive, but that we will need to renew policy settings to prepare for future financial crises, international integration, population ageing and technology change, Ms Westacott said.
Included in the nine priority areas identified are the importance of competition and contestability, regulation and regulatory structure, technology and international integration. These are all areas the BCA has highlighted in its reform agenda and are fundamental to Australia’s growth prospects.
“The interim report is well balanced and has identified the right opportunities, challenges and priorities to emphasise as it looks towards policy to improve the system into the future,” Ms Westacott said.
“The report has an important message to government to get the budget under control, recognising its importance for financial stability in Australia given our reliance on foreign capital.”
Ms Westacott said the BCA will be looking for the report’s final recommendations to:
• place the highest priority on maintaining Australia’s AAA sovereign credit rating
• broaden and deepen Australia’s domestic debt market
• address disincentives that arise from the tax treatment of deposits relative to other investments
• maintain and facilitate movement of capital into and out of Australia and minimising market distortions
• create opportunities for superannuation funds to invest in productive infrastructure, including through public asset sales
• clarify the importance of Australia’s application of international rules to our financial system such as Basel III liquidity reforms
• implement robust regulatory gate-keeping, through rigorous application of Regulation Impact Statements for all significant new regulations in the financial system
• ensuring that oversight and accountability arrangements for regulators are proportionate to their powers.
The BCA looks forward to participating further in the consultation and submission process that will now follow the release of the interim report.