IFSA to become the Financial Services Council
The Investment & Financial Services Association (IFSA), the national peak body representing the $1.4 trillion retail and wholesale funds management, superannuation and life insurance industries, today announced it would take on an expanded mandate and more actively engage in economic policy in Australia.
John Brogden, CEO of IFSA, said today that Financial Services is now the largest sector in the Australian economy and the nation’s pool of managed funds will grow to $5 trillion by 2030.
“As the largest sector in the Australian economy – responsible for managing the savings of all working Australians and facilitating investment throughout all industries – we have an obligation to speak on broader economic policy issues.
“Financial Services played a pivotal role in Australia as we negotiated the recent financial crisis. With $1.4 trillion under management today – the fourth largest pool of funds in the world – our industry was critical in recapitalising the Australian stock market allowing Australia to evade the worst aspects of the crisis.
“Next month, IFSA will become the Financial Services Council. As the custodians of the investments and retirement savings of Australians, we will exert a stronger influence on the economic environment in which we invest on their behalf.
“The Financial Services Council will contribute to policy development on a broader range of issues than IFSA has done in the past and we will continue to advocate on behalf of our members on core issues.
“The size and significance of the Financial Services sector in the Australian economy will continue to grow. This growth demands that we ensure Australia has the best investment, regulatory and business environment for the $1.4 trillion we invest now, and the $5 trillion we will invest in twenty years time, for all Australians,” Mr Brogden said.
Mr Brogden highlighted a number of issues on which the Financial Services Council would focus. These included:
- Advocating a ‘Big Australia’. Our population must be capable of driving future economic growth, keeping a cap on wages and inflationary pressures; and reducing the pressures of an ageing population;
- Championing real tax reform. The GST is unfinished business and inefficient state taxes must be removed;
- Increasing participation rates – particularly for older workers. We must make greater use of the existing population; and
- Advocating improvements to our regulatory environment whilst resisting the adoption of unnecessary and reactionary US and European regulation that will harm the Australian economy.
“The Financial Services Council will put the GST back on the tax reform agenda in Australia – it should be increased and, or broadened. It is an economic imperative to replace distortionary and inefficient state taxes.
“Abolishing inefficient state taxes will remove distortions which affect investment decisions – such as how assets are purchased, how long they are held and how they are structured,” Mr Brogden said.
“Many state taxes have high economic costs. In contrast the GST has a low economic cost. By virtue of its broad base, the GST does not distort consumer decisions away from one product to another. Such a move may also create the opportunity to reduce personal and business tax rates in order to further boost the economy.
“Finally, the Financial Services Council calls on the Government to be vigilant in resisting regulation being considered by other countries designed to solve problems that do not exist in our market.
“The Australian Government, unlike many other governments, was not required to take ownership of any financial institution and our institutions have arguably emerged stronger than when they entered the crisis.
“Australia is in a position to resist much of the new regulation being proposed by international bodies such as the G20, and by governments in the United States, United Kingdom and European Union. Instead, we should be looking to be a net exporter of financial regulation.
“The new Financial Services Council takes seriously the responsibility for managing the savings of all Australians and facilitating capital flows. We will continue to work on the issues that enhance the domestic investment environment and assist in building the retirement savings, wealth and ultimately the lifestyles of all Australians,” Mr Brogden concluded.
