The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

8 August 2008

NO.028

Financial Services and the Modern Economy

Address to the
Investment and Financial Services Association Conference

Gold Coast

7 August 2008

Thanks so much for inviting me tonight. What an absolute honour to join you here on the Gold Coast for your Innovate 08 Conference.

I do want to thank IFSA for providing a forum, over the past few years, to talk about financial services and the more modern economy I want us to build together, for the future.

Tonight's not the night for a really detailed speech but I do want to spend a little bit of time talking briefly about the Government's approach to the big challenges and opportunities we are confronting, nationally and internationally.

Many of you would already be very familiar with what the Government is doing in the financial services sphere and I don't need to address those things in detail.

You'd already be aware, for example, of:

  • What we're doing to strengthen the financial system by implementing the Financial Stability Forum recommendations in full and encouraging their implementation internationally;
  • The steps we're taking to support liquidity in the Government Bond market to ensure our markets operate more effectively;
  • What we're doing to strengthen protections for deposit holders in the unlikely event that an institution gets into trouble;
  • What we're doing to improve transparency around covered short selling and reviewing the disclosure requirements around equity derivatives;
  • How we're cutting the interest withholding tax on certain distributions to just 7.5 per cent — down from the current rate of 30 per cent;
  • How we're opening doors internationally for our financial services industry, through a range of bilateral agreements with China, the US, Hong Kong, New Zealand; and
  • How we're introducing a single, national regulatory regime for consumer credit.

These reforms make an important broader point about the approach of our Government. They're all about doing the hard yards to make our economy more modern, more resilient, and stronger for the long term.

That really encapsulates what we're doing right across all of the components of national economic policy, at a time of some pretty significant global economic turbulence.

I'm on my way back home from chairing a conference of APEC Ministers in Melbourne, dedicated to structural reform.

It really underscored for me how important it is that get our substantial economic agenda right, for the long term.

  • By getting COAG right, so we have a seamless, more competitive national economy;
  • By getting the Tax Review right, so we have the 21st Century tax system we need for the future; and
  • By getting the Carbon Pollution Reduction Scheme right, so it's implemented in the most responsible, low-cost way and so we give our kids a head start on the jobs of the future.

I hope you are as fired up about these challenges, and these opportunities, as I am.

Because the APEC meeting also served up another important reminder – it's this message I want to leave you with tonight.

The most difficult global conditions in a quarter century are not an excuse to squib the economic reforms the nation needs. On the contrary, the difficult conditions we face today, spur us on as we undertake this massive modernisation program, to make the economy stronger and more resilient. In other words, as I told the APEC ministers, we need to modernise our economy because of the global economic difficulties, not despite them.

This is certainly true of what the Government's doing in the financial services space that you're familiar with – but it applies equally to our broader agenda.

In a job like mine you welcome the big challenges because governments are judged by what they do when things are difficult, not what they do when things are easy.

To borrow a great phrase of John F. Kennedy's: reformist work in government is worthwhile not because it is easy, but because it is hard. That quote's been ringing in my ears these past eight months.

When governments in this country have introduced the most important reforms – the ones that have made the greatest difference – they have been hard, not easy.

We see real value in the long, hard slog of stable, enduring reforms – reforms that pass the test of time. Reforms like superannuation which, as a former Treasurer and PM has been very subtly reminding people these last few days, is so vital to today's economy. Superannuation is a reform that we, on the Labor side, take great pride in.

But today we have a whole new set of challenges and a whole new agenda for the long term:

  • Modernising the tax system will be hard;
  • Implementing an Emissions Trading Scheme will be hard; and
  • Creating a seamless national economy, through COAG, will be hard.

But we're going to work day and night to get them right.

I look forward to talking with you more about all these things, and about the ongoing process of making the financial services sector even stronger, into the future.

Thank you and enjoy your night.