The Australian Government's goal to develop Australia as a regional financial services hub has received a major fillip with the release of the World Economic Forum's Financial Development Report 2009 which ranks Australia second among the world's financial centres, ahead of the US, Singapore and Hong Kong.
In the WEF's Financial Development Index, Australia ranked 1st in terms of financial access and performed very well in both banking (5th) and non-banking (3rd) financial services.
The report also confirms the strength of Australia's financial services sector in the face of the global economic recession:
'The efficiency of its banks, where it earns 1st place in the rankings, is a key strength; the stability of its banking system (10th) and a low risk of sovereign debt crisis (1st) underpins its relatively high degree of financial stability through the current crisis.' (p. 18)
"This report highlights what has been a remarkable performance for Australia's financial services sector and gives the nation well-deserved global recognition," Financial Services Minister, Chris Bowen said.
"This is testament to the strength of our financial system; our solid financial skills base and well-run financial institutions; our system of prudential regulation, and proactive regulators.
"The Rudd Government's goal of developing Australia as a regional financial services hub is just as much about creating more highly skilled and well-paid jobs for the next generation of Australians as it is about ensuring our financial system is able to continue to respond to future external shocks.
Mr Bowen said the report provided a timely indicator of Australia's improving performance, but noted that much remains to be done.
"Australia cannot rest on its laurels and the upcoming report from the Australian Financial Centre Forum will provide another opportunity for the Government to examine options to remove any remaining obstacles to Australia becoming a financial services hub for the Asia Pacific."
The Rudd Government has already moved to enhance Australia's competitive position by:
- Cutting the withholding tax on certain foreign distributions from managed investment trusts from 30 per cent to a final rate of 7.5 per cent;
- Establishing the Australian Financial Centre Forum, which later this year will report on further ways to improve the competitiveness of our financial system and the clarity of taxation rules;
- Changing the attribution rules and the deemed capital account treatment of the sale of shares, units and property from Managed Investment Trusts - based on advice of the Board of Taxation;
- Repealing and replacing the Foreign Investment Fund provisions with a narrowly-defined anti-avoidance rule and modernising the Controlled Foreign Company rules; and
- Announcing the transfer of supervision of financial markets from the ASX to ASIC, the corporate regulator.
9 October 2009