The Financial System Inquiry report I release today delivers on our election commitment and lays out a blueprint for the financial system over the next decade.
The security and stability of Australia’s financial system is a fundamental building block to a strong, prosperous economy.
When there is confidence and stability in the financial system, we create conditions where investment can thrive and Australians have confidence that their future is secure. That, in turn, creates opportunities and growth.
Australia has some of the best banks and financial institutions in the world and equally good regulation, but the landscape has changed since the last serious look at our financial system through the Wallis Report in 1997.
The financial and insurance services sector’s output has increased from $41 billion in 1996 to $133 billion in 2013-14.
The superannuation system has grown from $300 billion of assets to over $1.8 trillion today.
The domestic assets of our banking institutions have increased from $560 billion to $3.5 trillion in 2014.
A major focus is consumer protection. The inquiry received over 6,500 submissions in response to its interim report. More than 5,000 of those were on the issue of credit card surcharges alone. More than a quarter of the recommendations have a positive impact on competition.
Several of the Inquiry’s recommendations, including those on bank capital and the payment system, are for APRA and the RBA to consider as independent regulators. The regulators will consider recommendations relevant to their mandates.
The Inquiry also makes a number of observations on taxation issues. These will be referred to the Tax White Paper for consideration.
The Government intends to consult with industry and consumers before making any decisions on the recommendations. This consultation will occur up until 31st March 2015.
I look forward to hearing stakeholders’ views on the recommendations over the coming months.
The full report is available on the Financial System Inquiry website.