14 May 2007  

JOINT MEDIA RELEASE

IMPROVING THE REGULATION-MAKING AND REVIEW PROCESS
– BANKING AND FINANCE SECTOR
SUPPORTS BUSINESS CHECKLIST FOR NEW FEDERAL LAWS

Sydney, Australia: The Finance Industry Council of Australia (FICA), which represents the combined interests of Australia's foremost financial sector associations, has joined a business alliance to support the ‘Business Checklist for Commonwealth Regulatory Proposals’.

FICA joins the business alliance which includes the Business Council of Australia, Australian Institute of Company Directors, Chartered Secretaries Australia, Law Council, Australian Employee Ownership Association, Australasian Investor Relations Association and Financial Services Institute of Australasia.

The checklist flows from the Federal Government’s response to the report of the Taskforce on Reducing the Regulatory Burden on Business (the “Banks Taskforce”) and is consistent with the findings of the Productivity Commission’s study ‘Performance Benchmarking of Australian Business Regulation’.

“The checklist is an important tool that will enhance the ability of financial service providers to assess whether new regulatory proposals are being, or have been, developed in accordance with the Government’s endorsement of the six principles of good regulatory process as identified by the ‘Banks Taskforce’”, said Richard Gilbert, FICA Chair.

“This more consistent and targeted focus on the regulation making and review process will hopefully result in less unnecessary regulation being introduced as well as a more effective monitoring of existing regulations”

“FICA is also giving further consideration to the practical application of the Federal Government’s ‘Business Cost Calculator’ for the financial services industry. By identifying and developing relevant cost measures, FICA hopes to assist Government and regulators in better assessing the impact of regulation on business as well as benchmarking the performance of regulation.

“Conducting rigorous cost benefit analysis as part of the regulation making process is a difficult, but fundamental task.

“Financial services regulation often imposes a substantial up-front cost on the industry, requiring among other things – changes to systems, documentation, policies and procedures; training of staff; education of customers; licence authorisations/amendments.  Once a regulation has been implemented, it inevitably brings with it ongoing compliance costs that can be considerable. 

“It is therefore essential that any existing or new regulation take into consideration the upfront and ongoing impacts that the regulation will generate and balance these against the benefits that are intended to flow from the regulation. 

“It is important that this process be undertaken in a transparent manner with industry input to ensure both the benefits and costs are correctly identified and quantified.

“It is with this common goal in mind that FICA is working with both the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) on a number of projects aimed at delivering better regulatory outcomes for industry and consumers. 

“FICA also welcomes the recent announcement made by the Treasurer that the Productivity Commission has been commissioned to commence an annual review process to identify regulation that is unnecessarily burdensome, complex or redundant, or duplicates regulation in other jurisdictions. 

“FICA welcomes this initiative as a further body of work that is critical to removing unnecessary regulation that imposes an undue cost on business. 

“It is generally accepted that in the face of the demographic challenges facing the nation, our long-term competitiveness and prosperity is tied to our level of productivity. 

“Regulatory impositions often provide a significant barrier to further productivity gains and as a result we should all be equally vigilant in ensuring that regulation does not impose an unreasonable burden on business and consequently on productivity in the economy”, concluded Mr Gilbert.

Notes for editors:

FICA is compromised of the Australian Bankers’ Association (ABA), Australian Finance Conference (AFC), Australian Financial Markets Association (AFMA), Financial Planning Association (FPA), Investment and Financial Services Association (IFSA), and the Insurance Council. FICA provides a focus for the discussion of the overarching international and domestic issues affecting providers of financial services in Australia. FICA was formed in June 2004.

FICA's members have financial assets under management, including banks and other depositories and both the general and life insurance industries, which generate around 8% of Australia’s GDP.

FICA will allow higher level responses to regulatory and market developments affecting the overall sector, building upon the work done by the FICA constituents.

The Board Members of FICA are:

Mr David Bell, CEO, Australian Bankers’ Association
Ms Jo-Anne Bloch, CEO, Financial Planning Association
Mr Duncan Fairweather, Executive Director, Australian Financial Markets Association
Mr Richard Gilbert, CEO, Investment and Financial Services Association & Chairman, FICA
Mr Ron Hardaker, Executive Director, Australian Finance Conference
Ms Kerrie Kelly, Executive Director, Insurance Council

For a copy of the Business Checklist, please visit the Business Council of Australia.

Media Contacts:

FICA General Inquiries:   (02) 8235 2539
E-mail: info@fica.com.au

ENDS