The Minister for Financial Services, Superannuation, and Corporate Law, Chris Bowen MP, has this evening met with the Malaysian Prime Minister, Dato' Sri Mohd Najib bin Tun Abdul Razak in Kuala Lumpur.
The meeting focused on issues of mutual interest between Australia and Malaysia, including financial services and greater economic cross-border flows in the Asia-Pacific region.
Minister Bowen also represented the Australia Government at the 6th World Islamic Economic Forum (WIEF) that is being held in Kuala Lumpur.
The Minister participated in a leadership panel at the Forum around the forward-looking theme of this year's program, 'Gearing for Economic Resurgence'. The WIEF is a public-private sector dialogue addressing the economic issues facing Muslims and non-Muslims; and plays an increasingly important role in enhancing understanding and goodwill among nations.
The Minister also had a bilateral meeting with the Governor of Bank Negara Malaysia (central bank), Tan Sri Dr. Zeti Akhtar Aziz, to discuss the collaborative partnership between Australia and Malaysia, and the further strengthening of the inter-linkages and commercial opportunities between the two countries.
Australia, as an open, well regulated and stable economy in the region, is uniquely placed to capitalise on its comparative advantages and to benefit from opportunities to grow Australia's financial services sector.
The visit has provided an important opportunity for the Government to highlight the strength of the Australian economy and advance the Government's commitment to establishing Australia as a leading financial services centre in the Asia-Pacific region.
Islamic finance has an important part to play in the Government's efforts to grow the contribution of the financial services sector to our economy. The Islamic finance, banking and insurance market is worth almost $1 trillion and is estimated to reach as much as $5 trillion in coming years, according to Moody's Investor Services.
The Financial Services Centre Forum's report on Australia as a Financial Centre (the Johnson Report), made a number of recommendations aimed at reviewing the tax and regulatory environment to ensure a level-playing field for Islamic and non-Islamic financial products and services.
Board of Tax Review
The Minister and the Assistant Treasurer announced that the Board of Taxation would undertake a comprehensive review of Australia's tax laws to ensure that, wherever possible, they do not inhibit the expansion of Islamic finance, banking and insurance products. The Assistant Treasurer has since released the Terms of Reference of this review, to report to Government by June 2011.
Johnson Report - Rec 4.8 - Removing regulatory barriers to Islamic finance
The Government has established an Interdepartmental Committee (IDC) for examining barriers to Islamic finance. The IDC will provide advice on any regulatory barriers identified to the Minister for Financial Services, Superannuation and Corporate Law.
Memorandum of Understanding between Australia and Malaysia
The Minister officially witnessed a Memorandum of Understanding (MoU) signed between the Australian Treasury and Bank Negara, Malaysia's central bank, to facilitate development in the area of Islamic finance.
The MoU aims to enhance mutual co-operation on capacity building and development in the financial services industry, the facilitation and promotion of appropriate financial market infrastructure, and the dialogue on Islamic finance products and services.
The signing of the MoU follows agreement by trade ministers, the Hon. Dato' Sri Mustapa Mohamed and the Hon. Simon Crean MP, to explore cooperation on Islamic finance during the August 2009 Malaysia-Australia bilateral trade talks.
19 May 2010