Self-confessed economic policy nerd Conrad Liveris watched Joe Hockey discuss the Financial Services Inquiry on Sunday but wonders whether the government has the economic balls to follow through…
On Sunday morning, along with all the economic policy nerds around the country, I tuned in to watch Joe Hockey and David Murray release the Financial Services Inquiry.
Rightly, the Treasurer and Murray highlighted that the Financial Services Inquiry was not about a looming banking crisis. The inquiry has come at a time to learn from the outcomes of the GFC and how Australia can be better prepared.
The bad news is that Australian banks are not being held to the highest of international standards on the amount of capital they hold. This does not mean that the banks are under-prepared. Rather, Murray, a former CEO of the Commonwealth Bank, just wants the banking system to be the best it can be.
The report also called for a restriction on superannuation funds borrowing money. This is one of the big inter-generational issues that faces the financial services industry-at-large. Superannuation is a growing part of the sector that fuses our individual financial contributions with government investment and a business model – it is imperative that we get this right.
So, why are we paying any attention to this Financial Services Inquiry and its report?
Well, for a start, the star power of some of Australia’s biggest corporate names leading the project helps. When Murray and fellow committee member Carolyn Hewson talk, the market listens. But also, this is the sort of report that can transform Australia and put us ahead. We balance this fine-line between liberal-capitalism and the strident security of the Scandinavians, something achieved because we take these reports seriously.
Hockey said today that next year there will be rolling announcements on the implementation of the recommendations in one form or another. This is an opportunity for the Liberal Party to flex its economic prowess.
I wonder, however, are the Treasurer and Finance Minister up to the challenge?