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Keating and Willis at odds



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Peter Costello D eputy L eader of th e O pposition Shadow T re a su re r

K E A T IN G AND W IL L IS A T ODDS

Paul Keating has repudiated his Treasurer, Ralph Willis.

A spokesman for the Treasurer stated this morning that a re-elected Labor government would hold a major review o f the Australian financial system.

The spokesman is quoted as saying that the Treasurer has already asked the Treasury to develop proposals for a review.

Today M r Keating said it was not on. "It has not come past me," he said.

M r Keating and M r Willis are at odds on this issue.

M r Willis w ants to follow Coalition policy. M r Keating doesn't. M r Willis is right.

There should be an inquiiy for the very reasons that the Federal Coalition stated three months ago in a major policy speech delivered by me to the Association o f Superannuation Funds o f Australia (2 November 1995), and re-affirmed in our policy

release o f 30 January 1996 (attached).

Such a review will improve investor protection and address duplication that has led to costs and confiision in the market-place.

End Release: 2 February 1996

Contact: Anthony Smith (03) 9650 5075

or AH (018) 324 009

COMMONWEALTH PARLIAMENTARY LIBRARY

P arliam ent H ouse, C an b erra, A.C.T. 2600

MEETING THE CMUEMGE.

• releasing regular, detailed statements on monetary policy and the role it is playing in the achievement of the Reserve Bank's objectives; and • releasing independent economic forecasts prepared by the Reserve Bank.

IM IA T IO N POLICY.

A Federal Coalition government will support the Reserve Bank's inflation target.

In its 1 9 9 4 /9 5 annual report, the Reserve Bank expressed its objective as being to "hold the underlying rate of inflation to around 2-3 per cent overtime".

A Federal Coalition government will not change the Reserve Bank's charter. We believe that maintaining a strong anti-inflationary policy is central to the achievement of the Bank's charter, including economic and employment growth.

FINANCIAL REGULATION REVIEW .

A Federal Coalition government will undertake a review of the Australian financial system.

The aim of the review is not to increase regulation. Rather it will:

• stocktake financial deregulation including an audit of the successes and failures of the last thirteen years; • investigate methods of modernising existing structures; • seek to establish a common regulatory framework for overlapping financial

products by rationalising and harmonising existing regulation; and • establish procedures for addressing further financial innovation in a timely fashion.

Such a review is timely in an era of increasing convergence between the products offered by different types of financial institutions. At present, there are separate regulators for different types of financial institutions. But as convergence occurs

the same or virtually the same products can be regulated differently by different regulators. This can also lead to duplication and increased costs and confusion in the market-place.

The aim of such a review would be to streamline and rationalise financial regulators so that they are organised by function, such as prudential control and consumer protection. Similar financial products should be subject to the same regulatory framework. This would maximise protection for Australian investors.

The review will also advise the government on mechanisms forthe development of a domestic corporate bond market. The development of such a market will provide new avenues for Australian business to raise funds, consequently encouraging greater reliance on domestic sources of finance.

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The Reserve Bank and Australian Competition and Consumer Commission will retain responsibility for monetary and competition policy respectively.

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