Some views on deregulation in the financial industry: still more to do
''There is no reason the financial industry should be any more controlled than the clothing industry, or the shoe industry, or the motorcar industry,'' says R. B. Cameron of the Australian Bankers Association.
Australia's financial industry has long been highly regulated, but strong winds of change are blowing. Much of the deregulation has already been carried out over the past year.
The float of the dollar, for instance,, is hailed by John MacLeod, economist at CRA Ltd., as a way to control the huge service charges on the country's private external debt. ''Debt service is now costing us as much as we earn from our largest single export item, namely coal.''
Market forces acting on the exchange rates will force Australia either to control its imports or step up its exports, or both.
Ian Matheson of Westpac Banking Corporation calls the decision to float the dollar ''one of the most significant decisions made since the war.''
Richard Blandy of Flinders University would like to see things go further. He blasts interest ceilings, particularly on housing loans, as a distortion of the marketplace that will have to go. Controlled interest rates are ''terrific,'' he says, for those who can find mortgage money. ''But the effective rate if you're 'out' is infinite.''
He also blasts the tax breaks and web of government regulations that make it easier to invest in established, status quo businesses, rather than start-up enterprises, ''whose only assets are ideas.'' This works against the industrial restructuring process Australia must undergo.
Stockbrokers' commissions have also been deregulated, as of April 1. Says Maurice Newman, senior partner for equities at Bain & Co., ''It's nice to live in a cartel. But an industry that's cartelized gets weaker. We welcome the change.''