Announced by Treasurer, Joe Hockey, in December 2013, the Financial System Inquiry is charged with examining how our financial system could be positioned to best meet Australia’s evolving needs and support Australia’s economic growth.
The Inquiry has broad terms of reference that include a focus on the role of government and that of market discipline in development of a well functioning financial system. Visit: http://fsi.gov.au/terms-of-reference/
In its Interim Report, the Inquiry declared that:
“Wherever possible, the financial system should be subject and responsive to market forces. It should not be politicised to the extent that the Government sets prices, or mandates non-commercial financial decisions to resolve Government fiscal problems such as requiring banks to hold Government debt. Market discipline, through competition or self-regulation, is generally preferred to Government intervention.
“Where there is compelling evidence for Government intervention, the Inquiry considers the intervention should seek to best balance efficiency, stability and fairness. Inevitably, policy decisions facing the Government require some trade-offs.”
The development of both the National Disability Insurance Scheme (NDIS) and the National Injury Insurance Scheme (NIIS) involve key long term responsibilities for government. Both schemes have also attracted the interest of the private insurance industry and, as such, have relevance to the Inquiry’s focus.
