Business Spectator’s Alan Kohler has produced an interesting article today, arguing that the Murray Financial System Inquiry (FSI) has “gone rogue” on the Abbott Government:
The conventional wisdom in politics is that you don’t appoint a commission of inquiry unless you know the answer first. Well, that definitely hasn’t happened with David Murray’s Financial System Inquiry.
It is an absolute shocker for the government and the banks it’s been trying to please. If accepted it would undermine both of their two pillars of profitability: property lending and superannuation.
Presumably everyone felt that appointing an ex-banker to run it would work out nicely, but David Murray and the FSI panel have gone rogue.
Kohler’s article goes on to explain how the FSI supports the Future of Financial Advice (FoFA) reforms implemented by the former Labor Government, and has even recommended reforms that would go even further. In turn, it has directly undermined the Government’s attempted unwinding of FoFA.
Further, these recommendations come on top of the FSI’s attempt to unwind superannuation and property-related tax concessions, disallow leverage by superannuation funds, and raise capital requirements (and reduce leverage) on the big banks’ mortgage exposures – all of which would reduce the profitability of the FIRE sector.
When the FSI was first announced, and the panel was loaded with former bankers and super industry players, we at MacroBusiness did not hold much hope for serious reform. To us, it seemed like a “loaded” inquiry that would seek to justify and maintain the status quo.
That the FSI has gone “rogue”, as claimed by Kohler, is a credit to the panel members, and is also perhaps an acknowledgement that the system they have been part of (and helped to create) has failed.
