Honner recently attended the Financial Services Council (FSC) political series breakfast to hear Assistant Treasurer and Minister for Small Business, the Hon. Kelly O’Dwyer MP, outline her vision for Australia’s financial services sector.
Having delivered the government’s response to the Financial Systems Inquiry (FSI) and starting the dialogue around the Life Insurance Framework (LIF), it’s fair to say that Ms O’Dwyer has had a busy eight weeks since officially starting in office.
FSC CEO Sally Loane never tires of reminding the financial services community, “Kelly O’Dwyer does the job of two men” since being promoted under the Turnbull government into the positions of Assistant Treasurer and Minister for Small Business. To top it all off, Ms O’Dwyer is also mother to six month old baby Olivia. As a full time working mother to a 10 month old myself, I am tempted to use the phrase “I don’t know how she does it!”
Much of Ms O ‘Dwyer’s address, which, according to the FSC was the new Minister’s first major speech on financial services, focused on the FSI. Ms O’Dwyer stressed the government’s commitment to “providing a financial services framework that encourages economic growth, innovation and investment, and one that is fair to both consumers and businesses.”
Overall, the government accepted the overwhelming majority of recommendations made in the FSI final report and, on the whole, Australia’s financial services sector is performing well. But, as is often the case, there is room for improvement.
Future success rests heavily on our $2 trillion super system, which is set to grow to $9 trillion in assets by 2040. Ms O’Dwyer said the government will first enshrine the objective of the super system in legislation to help “align policy settings, industry initiative and community expectations. “
At the same time the Productivity Commission will review the efficiency and competitiveness of the system as well as exploring alternative default option models. In the retirement income space, the government will enable super fund trustees to pre-select comprehensive income products for retirement (CIPRs) for their members.
Ms O’Dwyer also mentioned that all super funds excluding SMSFs will be required to have a minimum of one-third independent directors on their trustee board, including an independent chair – with the aim of providing “increased scrutiny and transparency.”
In other areas, Australia’s flourishing small business community also received a nod with government plans to introduce new legislation to allow start-ups and small companies, with a turnover of less than $5 million, to raise annually up to $5 million in equity through crowdfunding. Ms O’Dwyer said the changes would “allow mum and dad investors to make investments in start-ups and small business.” It will also bring Australia up to speed with global peers in Canada, the UK, US and New Zealand who already have similar models.
Ms O’Dwyer concluded that the government was committed to making Australia’s financial system s the best in the world and that the government’s financial system program “will enable the system to meet its fundamental role in funding a more competitive and productive economy that is able to embrace uncertainty and encourage innovative activity.”