Aussie banks want a slice of the Pacific pie
As the latest indication of its commitment to financial deregulation - in a hitherto highly regulated fiscal system - the Australian government wants to establish an offshore banking center.
Allowing greater freedom for existing Australian banks, proceeding with plans to allow some foreign banks into the country, and now preparing for offshore banking - with moves such as these, the Labor Party government of Prime Minister Bob Hawke has stunned and alienated the party's leftist socialists. These socialist purists have, however, been unable to do more than make muted protests because of Mr. Hawke's immense personal popularity.
Hawke's chief aide, his boyish treasurer, Paul Keating, has been closely associated with financial deregulation. He has announced that officials are developing a ''legislative framework'' for offshore banking. With strong pressure from the left against tax avoidance, he carefully emphasized that the tax concessions necessary to woo foreign businesses would not let them avoid legitimate tax obligations. Stringent monitoring is expected in Canberra.
Officials hope Australia will grab a share of growing Pacific Basin business that would otherwise go to Singapore or Hong Kong. There is widespread uncertainty over Hong Kong's long-term future after 1997, when Britain's 99-year lease over most of the territory of the colony expires.
The Pacific mini-nation of Vanuatu depends on offshore business and heavily promotes itself as a tax haven. But officials in Port Vila, the capital, say they are unconcerned by the initiative taken by their large neighbor to the south, believing they will always attract the smaller, secrecy-oriented client who may shy away from the more regulated Australian system - described by a Port Vila accountant as ''highly regulated deregulation.''
Australia believes it will be more attractive to large clients, particularly, with its stable political system, excellent global communications, and sophisticated and readily available legal, accounting, and banking services.
A decision to go ahead, expected late this year, will inevitably lead to a competitive scramble for business by four Australian states. New South Wales, the most developed and prosperous, with its capital in Sydney - the nation's biggest city - has, under Labor Party state Premier Neville Wran, been a prime mover in favor of offshore banking.
Melbourne, capital of Victoria, still claims to be the country's most important banking center. In Perth, Western Australia, the proximity to major oil and mineral developments is cited. And in Brisbane, Queensland, the national party state government's pro-business stance is contrasted with the ''socialist'' policies of Labor Party state administrations elsewhere. But present-day Labor administrations, for the moment out of the grasp of their leftist ideologues, are making it more difficult for antibusiness charges to be leveled at them.
From the federal government's point of view, if business is attracted, the benefit to the country as a whole could be considerable.
Details of just how the government sees the system operating have not yet been revealed. But Treasurer Keating declares, ''In principle, the government is favorably disposed toward the facilitation of offshore banking in Australia, subject to the satisfactory resolution of potential difficulties in the areas of supervision and taxation.''