Islamic finance products are not just limited to a Muslim audience, but could attract the same client base as socially responsible investment (SRI) products, according to assistant treasurer Nick Sherry.
"There are an increasing amount of people in our community interested in socially responsible investments and Islamic Shariah finance is in one sense a form of socially responsible investment," Sherry said.
He said both wholesale and retail investors were likely to be interested in these products.
"There are investors, large and small scale, who do want to invest in these forms of financial instruments," Sherry said.
"There are people in the broader community that don't like to invest in alcohol or gambling and in that sense Shariah finance is another option that is available to people," he said.
His comments were supported by the experience of international banks, including French bank BNP Paribas, whose Islamic finance products globally have already attract funds from non-Muslim clients for its ethical characteristics.
Sherry made the comments at the launch of a booklet on Islamic finance, called 'Demystifying Islamic Finance', which aims to take away misconceptions about this form of financing.
The booklet was published by Malaysian law firm Zaid Ibrahim and Co, which opened an Australian office last year.
"I have been confronted by a number of emails with very negative comments on Islamic finance, saying it is used to finance terrorism," Sherry said.
"We need to continue the community dialogue to increase awareness of the facts about the benefits of Islamic finance to Australia's economy," he said.
Globally the Islamic finance industry is worth almost $1 trillion, Sherry said.
"Australia is in an excellent position to capitalise on that growth and fulfil its potential as a financial services hub."
The government asked the Board of Taxation in April to review the treatment of Islamic finance under Australian tax laws in order to creating an equal treatment to other financial products.
Sherry expect to see an outcome of this review by June next year.
