Murray has banks, super funds worried

David Murray gave everyone an indicative look at his inquiry into Australia’s financial system this week and it would be fair to say it’s captured everyone’s attention for the broad sweep of ‘observations’ it contains.

For something that was supposedly only looking at the competitive environment of the Australian banking system, it’s gone a lot further than expected, covering investment advice, superannuation performance and cost, plus taxation issues that affect investment decisions etc

Murray will now consult widely before delivering his final recommendations to the Government. Expect to see a lot more blowback from the big banks and super funds as they strive to dissuade Murray on a number of fronts that would increase their costs and allow more competition into their markets

The cost equation comes from an observation that the big four banks will have to lift their capital ratios to protect themselves from another financial disaster, either externally or internally, while at the same time they could be facing increased competition from smaller financial institutions if the regional banks and credit unions are freed up from various restrictions and regulations.

Murray has been particularly critical of the superannuation industry and its fee structure, suggesting big savings could be made by simplifying the system, tendering for government default funds, and making tax changes to self-managed super funds.

In financial advice, Murray’s observation that the balance of power should be shifted back towards consumers looks to have already been overtaken by the Federal government’s amendments to the FOFA reforms put into law by the previous Labor government.

Go Back