Bowen’s rhetoric ignores Rudd Government risk to future investment and financial services growth

June 2, 2010

The Minister for Financial Services, Chris Bowen, has once again confirmed to be all spin and little substance on making Australia a Financial Services Centre, said the Shadow Minister for Financial Services, Luke Hartsuyker today.

:The Minister talks up how opening a one-stop-shop and introducing an Investment Manager Regime is going to bring new business to Australia, but he chooses to ignore the basic economics on attracting investment and selling the benefits of using Australian financial services," Mr Hartsuyker said.  "The Rudd Government has successfully undermined international investor confidence and made Australia a sovereign risk, through the release of their new mining tax.

"Their huge tax grab has alarm bells ringing and will reverberate through all sectors of the Australian economy – including financial services and superannuation. The Minister also chooses to ignore the importance of strong economic management. The existing strength of our financial services sector is the result of the reforms and stability delivered by the Coalition Government.

"The Rudd Government, with the Minister for Financial Services as a trusted lieutenant, is now trashing our reputation and prompting overseas investors to question the confidence of doing business in Australia. Any Labor commitment to growing Australia’s financial services industry is not backed up by statistics on the industry’s performance during the term of the Rudd Labor Government.

"In the 2.5 years prior to the 2007 election, employment in the financial services sector in Australia grew by 18 per cent, or 62,000 workers, as a result of Coalition government reforms.  In the 2.5 years after the 2007 election, employment in the financial services sector has only grown by .01 per cent, or 4,000 workers as a result of Rudd Government failures.

"The Rudd Government’s track record tells the story. This is a government that helped ruin securitisation markets through its Bank Guarantee and this is a Minister that showed absolutely no understanding of markets through his failed FuelWatch and GroceryChoice policies.

"This is a government that has wasted so much money that it cannot introduce new policies, without taxation. If Minister Bowen was serious about cutting interest withholding tax, he would commit to following through with the policy without introducing the Rudd Government great big new tax on mining.  This new tax will destroy investment returns on one of the largest sectors of investment in the Australian economy.

"The Coalition has reaffirmed its commitment to growing Australia as a financial services hub, but we will do so without destroying an industry underpinning the performance of Australia’s financial markets."

 

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