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AUSTRALIAN BANKERS' ASSOCIATION WELCOMES
THE FEDERAL GOVERNMENT'S RETHINKING ABOUT REGULATION
Sydney, 13 April, 2006: The Australian Bankers’ Association (ABA) welcomes the public release of the report of the Regulation Taskforce, which was established jointly by the Prime Minister and Treasurer in October last year, and chaired by the Chairman of the Productivity Commission, Gary Banks.
The ABA views the Taskforce’s report ‘Rethinking Regulation’ as a potential watershed in the direction of regulation in Australia as it recommends the adoption of sound regulatory processes as the basis of decision-making going forward. The industry congratulates the Federal Government on this initiative.
In particular, the ABA fully supports the Taskforce’s list of six principles of sound process:
- Government should not act to address ‘problems’ through regulation unless a case for action has been clearly established. This should include evaluating and explaining why existing measures are not sufficient to deal with the issue.
- A range of feasible policy options – including self-regulatory and co-regulatory approaches – need to be assessed within a cost-benefit framework (including analysis of compliance costs and, where relevant, risk).
- Only the option that generates the greatest net benefit for the community, taking into account all the impacts, should be adopted.
- Effective guidance should be provided to regulators and regulated parties to ensure that the policy intent of the regulation is clear, as well as what is needed to be compliant.
- Mechanisms such as the sunset clauses or periodic reviews need to be built in to legislation to ensure that regulation remains relevant and effective over time.
- There needs to be effective consultation with regulated parties at the key stages or regulation-making and administration.
The ABA strongly supports the proposed independent public review of Australia's consumer protection policy framework and its administration. This will help to ensure that consumer regulation is based on sound research into market failures, is proportionate and subjected to robust cost and benefits assessment so that consumers' interests are best served.
David Bell, Chief Executive of the ABA, said: “The Taskforce report sets out a large regulatory reform agenda with 178 recommendations, including recommendations for reviews in financial services. We will now consult with Government, regulatory agencies and our member banks on implementing the report’s recommendations.”
The ABA also welcomes the Federal Government’s two separate responses to the Regulation Taskforce report.
- The Prime Minister and Treasurer jointly released the Australian Government’s Interim Response on the Taskforce report on 7 April.
Mr Bell said: “The Government’s Interim Response announces a number of measures aimed at simplifying the regulatory system, streamlining processes for investors and customers, and reducing the compliance burden for the financial services industry.”
“We are pleased that our comments on promoting national consistency and harmonising regulation across States and Territories are reflected in the Government’s Interim Response. Reducing regulatory complexity and burden on companies that operate nationally will deliver efficiency benefits for their customers, their business and the economy generally.”
“We also note and support the Government’s view that there needs to be greater consultation by regulators with industry. The ABA also supports the Taskforce recommendation that regulators should develop a wider range of performance indicators for annual reporting,” Mr Bell said.
The ABA will be working closely with the Federal and State Governments to promote greater national consistency and reduce the unnecessary regulatory burden.
In particular:
- - Productivity Commission’s inquiry into the consumer policy framework;
- - Council of Australian Governments’ (COAG) development of nationally consistent standards for Occupational Health and Safety.
The Parliamentary Secretary to the Treasurer, Chris Pearce, launched on 7 April a consultation paper which outlines 56 proposals aimed at improving corporations and financial services legislation. Mr Pearce has asked that industry consider whether the proposed changes are required and how they can be achieved.
Mr Bell said: “We are also pleased that our comments on further refinements to Financial Services Regulation (FSR) have been acknowledged by the Federal Government. The Government is clearly making an effort to reduce paperwork and improve disclosure of financial products and services for consumers without compromising the intent of the regulations.”The ABA will be submitting a formal response to Treasury on the consultation paper.
For further information:
Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
ENDS
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