AVCAL welcomes scope of financial system inquiry
21 November 2013
AVCAL today welcomed the Federal Government’s announcement of an inquiry into Australia’s financial system. The Association said it was appropriate that the terms of reference allowed for a thorough examination of how the financial services industry can best support the continued growth and expansion of the Australian economy.
Mr. Yasser El-Ansary, AVCAL’s CEO, said the private equity and venture capital industries will be pressing the need for a focus on policy and regulatory settings that promote greater involvement by the Australian financial services industry in medium and longer-term domestic investment opportunities.
“One of the weaknesses of the current system is that insufficient capital is allocated to innovative technologies and growth and expansion phase businesses. No-one disputes the vital importance of innovation in replacing those traditional domestic industries that can no longer compete given the highly competitive global marketplace we operate in, so it is vital that our financial system addresses this issue.
“AVCAL supports the broad direction of the draft terms of reference, particularly the inclusion of our superannuation system, which currently struggles to play the role it should in matching our longer-term capital needs. The system’s settings do not currently strike the right balance and consequently too much of our superannuation investments have a short-term focus and that’s to the detriment of both superannuants and the broader economy,” said Mr. El-Ansary.
AVCAL intends to consult its member base in the coming weeks and provide specific recommendations to the inquiry.
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Author: Adrian O’Shannessy, Director, Greenwoods & Herbert Smith Freehills
Author: Dr Kar Mei Tang, Head of Policy and Research, AVCAL