This report responds to the objective in the Inquiry’s Terms of Reference to best position Australia’s financial system to meet Australia’s evolving needs and support economic growth. It offers a blueprint for an efficient and resilient financial system over the next 10 to 20 years, characterised by the fair treatment of users.
The Inquiry has made 44 recommendations relating to the Australian financial system. These recommendations reflect the Inquiry’s judgement and are based on evidence received by the Inquiry. The Inquiry’s test has been one of public interest: the interests of individuals, businesses, the economy, taxpayers and Government.
Australia’s financial system has performed well since the Wallis Inquiry and has many strong characteristics. It also has a number of weaknesses: taxation and regulatory settings distort the flow of funding to the real economy; it remains susceptible to financial shocks; superannuation is not delivering retirement incomes efficiently; unfair consumer outcomes remain prevalent; and policy settings do not focus on the benefits of competition and innovation. As a result, the system is prone to calls for more regulation.
To put these issues in context, the Overview first deals with the characteristics of Australia’s economy. It then describes the characteristics of and prerequisites for a well-functioning financial system and the Inquiry’s philosophy of financial regulation.
The Inquiry focuses on seven themes in this report (summarised in Guide to the Financial System Inquiry Final Report).
The Overview deals with the general themes of funding the Australian economy and competition.
The Inquiry has also made recommendations on five specific themes, which comprise the next chapters of this report:
- Strengthen the economy by making the financial system more resilient.
- Lift the value of the superannuation system and retirement incomes.
- Drive economic growth and productivity through settings that promote innovation.
- Enhance confidence and trust by creating an environment in which financial firms treat customers fairly.
- Enhance regulator independence and accountability and minimise the need for future regulation.
These recommendations seek to improve efficiency, resilience and fair treatment in the Australian financial system, allowing it to achieve its potential in supporting economic growth and enhancing standards of living for current and future generations.
Financial system inquiry committee
Mr David Murray AO (Chair)
Mr David Murray AO (Sydney) was most recently the inaugural Chairman of the Australian Government’s Future Fund Board of Guardians between 2006 and 2012. Mr Murray was previously the Chief Executive Officer of the Commonwealth Bank of Australia between 1992 and 2005. In this time, Mr. Murray oversaw the transformation of the Commonwealth Bank from a partly privatised bank to an integrated financial services company. In 2001, he was awarded the Centenary Medal for service to Australian society in banking and corporate governance, and in 2007 he was made an Officer of the Order of Australia for his service to the finance sector, both domestically and globally, and service to the community.
Professor Kevin Davis
Professor Kevin Davis (Melbourne) is currently a Professor of Finance at the University of Melbourne, Research Director at the Australian Centre for Financial Studies and a Professor of Finance at Monash University. Professor Davis is also a part-time member of the Australian Competition Tribunal and Co-Chair of the Australia–New Zealand Shadow Financial Regulatory Committee.
Mr Craig Dunn
Mr Craig Dunn (Sydney) was most recently Chief Executive Officer and Managing Director of AMP. Mr Dunn led AMP through the global financial crisis and has extensive experience in the financial sector. He was a member of the Australian Government's Financial Sector Advisory Council and the Australian Financial Centre Forum, and an executive member of the Australia Japan Business Co-operation Committee. Mr Dunn is a director of the Australian Government’s Financial Literacy Board.
Ms Carolyn Hewson AO
Ms Carolyn Hewson AO (Adelaide) served as an investment banker at Schroders Australia for 15 years. Ms Hewson has over 30 years’ experience in the finance sector and currently serves on the boards of BHP Billiton Ltd and Stockland. Ms Hewson was made an Officer of the Order of Australia for her services to the YWCA and to business. Ms Hewson has served on both the boards of Westpac and AMP and retired from the board of BT Investment Management Ltd and as the Chair of the Westpac Foundation upon her appointment to the Financial System Inquiry Committee.
Dr Brian McNamee AO
Dr Brian McNamee AO (Melbourne) served as the Chief Executive Officer and Managing Director of CSL Limited from 1990 to 30 June 2013. During that time, CSL transitioned from a Government-owned enterprise to a global company with a market capitalisation of approximately $30 billion. He has extensive experience in the biotech and global healthcare industries. Dr McNamee was made an Officer of the Order of Australia for his service to business and commerce.