A “once-in-a-generation” opportunity to make Australia a financial services hub is winning widespread support, but the government will have to change the game if it wants to woo Asia’s money men.
A number of organisations and politicians have thrown their support behind a proposal to turn Australia into a new financial services hub as China imposes draconian national security laws on Hong Kong.
“I'm surprised to see Hong Kong collapse before our eyes as a credible financial centre,” said senator Andrew Bragg. “But there is a great opportunity for us to move ahead of Singapore, and to try and capture some of that business.”
That opportunity is a “very small window” and highly dependent on providing certainty around licensing processes and taxation to provide peace of mind to funds and executives that want to relocate. Mr Bragg also warned that in order to get “the lion’s share of growth”, Australia would have to beat out “Singapore Inc.”, which is better prepared to absorb Hong Kong’s business.
“I understand that we have a louder, messy democracy, which we love and that is magnificent,” Mr Bragg said. “But we have got to be really smart and quick on this. I'm surprised that Hong Kong is finished. But why would you invest a cent there?”
The Financial Services Council echoed those points, warning that Australia would have to remove “excessive taxes that penalise investors” and develop corporate collective investment vehicles that are familiar to Asian investors.
“These reforms would build on Australia’s existing strengths including our high-quality education and training sector, the rule of law, our political stability, and our well-established funds management industry servicing Australia’s superannuation sector,” said FSC CEO Sally Loane. “However, [government] rules are holding us back… Reductions in Australian taxes and red tape would make our market much more attractive to overseas investors and improve our global standing.”
The Morrison government has already ended its extradition treaty with Hong Kong and will loosen visa restrictions in order to attract companies and skilled workers in a move that China has blasted as “hypocrisy” and a “double standard”.
“China strongly deplores and opposes the groundless accusations and measures announced by the Australian government with regard to Hong Kong, which is a serious violation of international law and basic norms governing international relations, and a gross interference in China’s internal affairs,” the Chinese embassy said in a statement.
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