Parliamentary Secretary to the Treasurer
26 October 2004 - 3 December 2007
BETTER CO-OPERATION IN BANKING SUPERVISION WITH NEW ZEALAND
Chris Pearce announced that the Financial Sector Legislation Amendment (Trans-Tasman Banking Supervision) Bill 2006 has been introduced into Parliament today. This Bill represents a significant step towards fulfilling the Australian Government’s commitment to develop a single economic market between Australia and New Zealand. It delivers on the agreement, between the Treasurer and the New Zealand Minister of Finance, to develop a seamless regulatory environment for banking services by implementing the legislative changes that were announced by the Ministers on 22 February this year.
New Zealand is currently progressing its own reciprocal legislation through its Parliament.
Given the high level of commercial integration between the Australian and New Zealand banking markets, there are key benefits in moving towards seamless regulation of banks on both sides of the Tasman, including minimising compliance costs and promoting efficiency.
“This Government has a direct, substantial and ongoing interest in reducing compliance and administration costs for consumers and business in Australia”, said Mr Pearce.
The legislative amendments are expected to improve the ability of the Australian Prudential Regulation Authority to cooperate with the Reserve Bank of New Zealand, which should reduce impediments to banks in choosing the location of their systems and functions within the trans-Tasman market. This is expected to bring compliance cost and efficiency benefits for banks with operations in both Australia and New Zealand and have flow‑on benefits for consumers of banking services.
“In developing these proposals, the Government recognises that Australian banks operate across borders and need to be competitive in an increasingly global financial system. Allowing banks greater flexibility in how they structure their operations should also assist Australian banks compete with large international banks that are able to centralise systems and functions to secure cost savings.
“The implementation of legislative changes reinforces Australia’s commitment to the trans‑Tasman single economic market objective and will provide a path for further progress in the area of banking supervision”, Mr Pearce said.
Mr Pearce thanked stakeholders in Australia and New Zealand who were involved in the development of this proposal and provided comments on the draft Bill.
14 September 2006, CANBERRA
Media contact: Gillian Harvey 03 9887 3890 or 0411 567 060