The recommendations include:
- Increase bank capital levels
- Restoring the general prohibition direct leverage by superannuation funds
- “Enshrine in legislation” the purpose of the superannuation system
- Require superannuation fund trustees to “pre-select a comprehensive income product for members’ retirement”
- Extend Super Choice to all employees for Superannuation Guarantee contributions
- Mandate a majority of independent directors for the boards of public offer superannuation funds
- Rename ‘general advice’
- An “industry funding model” for ASIC
Treasurer Joe Hockey said the final report “delivers on our election commitment and lays out a blueprint for the financial system over the next decade.”
Taxation recommendations in the final report will be “referred to the Tax White Paper for consideration.” Recommendations relating to bank capital and payment systems will be considered by APRA and the RBA.
“The Government intends to consult with industry and consumers before making any decisions on the recommendations,” said Joe Hockey. This consultation period will be open until the 31st of March 2015, more details are available on the Treasury website. The Government will respond to the final report in 2015.
David Murray is scheduled to speak to the Committee for Economic Development of Australia (CEDA) about the Financial System Inquiry final report on Monday.
The Financial System Inquiry follows from earlier reports which reshaped the Australian financial system, the Campbell Inquiry of 1981 resulted in the floating of the Australian dollar and deregulation and the Wallis Inquiry of 1997 led to the current forms of APRA and ASIC.
Announced in December 2013 by Treasurer Joe Hockey the Financial System Inquiry had the purpose of
Examining how the financial system could be positioned to best meet Australia’s evolving needs and support Australia’s economic growth.
The Financial System Inquiry conducted an extensive consultation process, receiving over 280 submissions in the first round prior to the release of the interim report. More than 6,500 submissions were received in the second round, largely due to a campaign against credit card surcharges. The Financial System Inquiry also ran several public forums.
The Financial System Inquiry panel comprised:
- Mr David Murray AO, previously CEO of the Commonwealth Bank
- Professor Kevin Davis, Professor of Finance at the University of Melbourne
- Mr Craig Dunn, formerly CEO and Managing Director of AMP
- Ms Carolyn Hewson AO, who retired from the board of BT Investment Management Ltd when appointed to the Financial System Inquiry
- Dr Brian McNamee AO, CEO and Managing Director of CSL until June 2013
The final report is available on the Financial System Inquiry website.
Related Financial System Inquiry posts:
- Ban SMSF borrowing: Financial System Inquiry final report
- Financial System Inquiry to reshape superannuation system
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