The cost and complexity of regulation is holding back productivity growth in financial services, according to the latest report from the Financial Services Council (FSC) and DST Global Solutions.
The FSC-DST Global Solutions CEO report brought to light concerns within the industry that regulations do not pass a cost-benefit test and instead are hampering productivity improvement in the financial services sector.
"The financial services sector invests across the Australian economy. Poor productivity affects the returns on our investments on behalf of Australian superannuation fund members," FSC chief executive John Brogden said.
"Policies that impact the productivity of the financial services sector deliver few positive outcomes for consumers."
DST Global Solutions' regional head of business development in Australia and New Zealand, Rhys Octigan, said an investment in the technology required to meet regulatory change can be turned into a driver of productivity.
"But [there is] also concern that excessive regulation and controls would inhibit innovation," Octigan said.
Moves to broaden the tax base, by moving away from a reliance on income and company tax to a broader-based consumption tax, are also viewed as obstructive to productivity.
"Effective tax policy is a key future driver of Australia's productivity growth," Brogden said.
"To return to the level productivity growth we had in the 1990s, Australia must reduce the stranglehold of regulation, introduce more flexibility into workplace relations and make our tax system more competitive."
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