A new report on foreign banking and investment has made recommendations about how Australia can boost competition in the financial services sector and encourage overseas investment.
The Australian Financial Centre Forum's 166 page report on Australia as a Financial Centre (the Johnson Report), was released last Friday and contained 19 recommendations that aim to reduce impediments to foreign banking and investment in Australia.
Included among the recommendations were changes to taxation, regulation and regulatory supervision, human capital, and generally promoting the nation as a financial centre.
The report concluded that while Australia has arguably the most efficient and competitive financial sector in the Asia-Pacific region, there were opportunities to further expand its exports and imports of financial services.
Minister for financial services Chris Bowen welcomed the report last week saying that the government plans to maximise the benefits flowing to the Australian workforce and Australian consumers of financial products.
"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," Mr Bowen said.
Prime Minister Kevin Rudd told The Australian Financial Review yesterday that he supports the report’s recommendations as a way to “promote the intrinsic strengths of the Australian financial services sector and export more of those services to the region at large”.
Mark Johnson, the former deputy chairman of the Macquarie Group and member of the Australian Financial Centre Forum said he believes the recommendations contained in his report would encourage Asian banks to open branches in Australia, and thereby increase competition.
“It’s very important that we have as much competition as possible in the market,” Mr Johnson said.
“Our recommendation on withholding tax on foreign banks goes directly to that point.”
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