The financial sector is at the core of the economic system, providing a range of services to households, businesses and governments. Economic research demonstrates a well-established causal link from financial sector development to economic growth. Having an open, efficient, well regulated and competitive financial sector is thus in the interests of all Australians.
• Countries with high quality financial sectors like Australia should be reaping the full benefits by exporting their financial services skills and experience to other countries.
• Australia is situated close to the fastest growing region in the world, where the need for ongoing development and liberalisation of financial markets in many countries is opening up enormous opportunities. Australia has arguably the most efficient and competitive ‘full service’ financial sector in the Asia-Pacific region. Our financial sector ranks highly in international surveys on many of the key requirements for a successful financial centre. These include a highly skilled workforce and a first class regulatory framework that has served us well through the global financial crisis. Yet our exports and imports of financial services are low by international standards. Our funds management sector, one of the largest and most sophisticated in the world, manages only a small volume of funds sourced from offshore.
• There are many reasons for this ‘inward focus’ of our financial sector. Central amongst them are some policy settings which inhibit a greater volume of cross-border financial transactions occurring through Australia — a distinguishing feature of successful financial centres.
• This Report sets out a small number of policy recommendations which, if implemented, can substantially boost our trade in financial services and further improve the competitiveness and efficiency of our financial sector. This will reduce costs and widen choices for consumers and businesses and increase skilled job opportunities in the financial sector and in a wide range of supporting industries and services. Greater financial integration with the region is also consistent with our broader national interests.