The federal government has received suggestions from the Financial Services Council to extend their terms to 4 or even 5 years in order to decrease pressures that were getting in the way of very important reforms in the financial industry area.

The current problems with the financial industry

Sally Loane, chief executive of FSC, says that the 3-year terms that are currently in place is tacitly supporting a ministry overhaul that wastes valuable time better spent on legislation on superannuation and taxes, which is desperately needed. The reforms and reviews and going back and forth on them cost $2.75 billion so far, only in the last 5 years. That translates to about $105 for every superannuation account. Anyone can see that doesn’t help the financial industry.

New ideas on change

The chief executive held a speech at the Financial Services Council Leaders Summit, where she spoke about how the financial industry review and the political change and reform came at a too large cost for this sector. It is a sector that is vitally important not only to the growth of the economy, but also to the growth for consumers.

She went on to say that in order to make Australia into the financial industry centre it has the potential of becoming, and in order to create and offer the best possible services and products to Aussie consumers, then the legislation has to be finalised and implemented as soon as possible, and benefit from bipartisan support. Tax reform and the Life Insurance Reform Bill are both in need of urgent addressing and they should be priorities for the re-elected officials, according to Ms Loane.

The futility of the current system

Since 2009, there have been no less than 14 big reviews (the 2014 Financial Systems Inquiry of David Murray included). The biggest problem is that these reviews ultimately amount to nothing, given that the recent governments ask for support from smaller parties and the political scene that is constantly changing.

The recommendations that are made based on the findings of these reviews do not enjoy the greatest success of implementation. As Ms Loane points out, that hurts not only the consumers, but also the Australian financial industry’s potential of being one of the major financial services centres in the world.

In conclusion, it is apparent that the electoral system could benefit from a more permanent change, instead of the constant reviews and re-reviews. That will grant some stability to the consumers and to the financial industry as a whole, increasing its chances of becoming a major financial services centre.

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