Public policy: The first line of defence

Abstract

The lack of effective competition and systemic misconduct in the Australian financial system has been the subject of recent examination and recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and the Productivity Commission’s two inquiries into the efficiency and competitiveness of the superannuation system and competition in the Australian financial system. This is at a time when the Australian financial and superannuation systems represent $7.6 trillion in assets and account for over 9 per cent of the Australian economy, whilst their services and products impact the wellbeing of all Australians. In this paper three public policy areas are examined: why Australia’s financial system is today characterised by ineffective competition and unfair consumer outcomes, reflections on the institutional failures and system wide shortcomings revealed by the respective Commissions of inquiry, and considerations for how to arrive at the right future policy settings.