Financial Services Council
A move by the Reserve Bank to reform credit card regulations is likely to open up new competition by shifting oversight for credit card issuers away from banking regulator Australian Prudential Regulation Authority. The reforms will likely mean companies will no longer need to register as a bank in order to issue credit cards, with analysts saying the move is likely to open up competition in the sector. “The issue with the access arrangements currently is that they're quite restrictive. Companies essentially need to be an authorised deposit taking institution, a bank,” BIS World senior analyst Caroline Finch told the ABC. “Banks are under a lot of regulation so this has been a significant barrier to entry, particularly to foreign players, and for anybody who's not already a bank it's quite hard to get yourself registered as a bank.” Alan Joyce defends Qantas job cuts Qantas chief executive Alan Joyce has defending plans to slash jobs at the airline during a Senate hearing late last week. “I absolutely believe that the Qantas staff are in the need for the company to change and know that the best way to secure as many jobs in the Qantas group is to have a successful, profitable business going forward,” Joyce told the Senate inquiry. “We have to make, I will say again, some tough decisions. It is not easy having to make 5000 people redundant.” Super pressure grows on small funds The pressure on superannuation funds is growing, with smaller funds overseeing less than $5 billion in assets increasingly being pushed to merge or be swallowed up by their larger competitors. According to Financial Services Council chief executive John Brogden, the federal government’s introduction of the MySuper scheme and reforms to SuperStream were pushing compliance costs beyond the reach of many smaller funds. “Most of the pressure is coming from government changes, whether they be the cost of changing internal processes or adopting new IT systems,” Brogden says. “The smaller funds will have a lot of pressure on them to prove that they're viable beyond the next two or three years. The smaller you are, the more pressure is going to be on you.” Overnight The Dow Jones Industrial Average closed down to 16065.7 points. The Aussie dollar is down to US90.04 cents.
Treasurer Wayne Swan has admitted proposed reforms to the superannuation system will not make a “significant contribution” to budget savings, as criticism of the proposed changes mounts. “The fact is that we have a substantial savings task in this budget and whatever changes are made in super will not be making a significant contribution to that savings task,” Swan said. However, while industry groups acknowledge the challenges posed by a rapidly ageing population, they remain concerned about the lack of detail around the government’s proposed reforms. “At the moment every Australian thinks their super is at risk because there's no clarity from the government. The government needs to outline what their changes are and end the games,” Financial Services Council chief executive John Brogden said. Glenn Stevens appointed as Reserve Bank governor for another three-year term Reserve Bank governor Glenn Stevens has been appointed for another three-year term as head of Australia’s central bank. The extension, announced on Wednesday by Treasurer Wayne Swan, will see Stevens serve until 2016, when deputy governor Philip Lowe is tipped to take over the role. “I congratulate governor Stevens on his reappointment, which acknowledges his enormous contribution to Australia's economic resilience through his conduct of monetary policy, as well as his enduring focus on financial stability working together with our other key regulators,” Swan said. Cyprus accepts €10 billion bailout conditions Cyprus has formally accepted a set of conditions that will see the troubled island nation eligible for a €10 billion ($A12.27bn) bailout. Under the deal, the Cypriot government will close the bankrupt Laiki Bank, with all deposits under €100,000 transferred to the Bank of Cyprus, while deposits over €100,000 could be taxed at rates of up to 60%. “The Cypriot authorities have put forward an ambitious, multi-year reform program to address the economic challenges they face,” said International Monetary Fund managing director Christine Lagarde. “The overarching goals are to stabilise the financial system, achieve fiscal sustainability and support the recovery of economic activity to preserve the welfare of the population.” Overnight The Dow Jones Industrial Average is down 0.8% to 14550.4. The Aussie dollar is down slightly to US104.57 cents.
A surge of baby boomers reaching retirement age won’t affect the labour market as much as previously thought but businesses still need to plan in advance, according to a new report.
The Federal Government’s highly-anticipated financial planning package has been met with a mixed response, with planners concerned the changes could increase costs for consumers.
The disability sector is tipped to become a multi-billion dollar market with the proposal of a $12 billion insurance scheme, which seeks to treat disabled people as consumers rather than patients.