The Prime Minister, Mr John Howard, today wrote to the Premiers and Chief Ministers seeking their support by year's end for a draft agreement to transfer regulatory responsibility for building societies, credit unions and friendly societies from the States and Territories to the Commonwealth.
The draft agreement was prepared by a Commonwealth, State and Territory working party.
The regulatory transfer will complete the second stage of the Financial System Reforms the Government's response to the Financial System (Wallis) Inquiry.
The Government's reforms have resulted in an overhaul of the Commonwealth's financial sector regulation, including the set-up of the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC).
Subject to the support of the Premiers and Chief Ministers and passage of legislation, the transfer will take place on 1 July 1999.
To meet this timetable, the Commonwealth in the autumn sittings wants to introduce legislation to give effect to the transfer after consultation with industry groups. However, the legislation's timing and its effective operation depends on the agreement of the State and territory governments.
The inclusion of building societies, credit unions and friendly societies in the Commonwealth's regulatory framework is supported by industry, and will not only improve international perception of Australia's financial system, but will result in new opportunities for the entities involved as well as their customers.