Consumer Action welcomes the opportunity to comment on the draft terms of reference for the Financial System Inquiry.
In summary, we recommend that:
- the overall objective for the Inquiry could be enhanced by clarifying that it will examine whether the financial system meets consumers’ needs and contributes to Australia’s wellbeing;
- the terms of reference should ask the Inquiry to consider how and when consumer protection and effective regulation encourages competition and efficient market outcomes;
- the Inquiry should consider ways innovation can be encouraged that contributes to fulfilling a social or economy-wide need;
- in assessing the consequences of financial regulation, the Inquiry should consider whether that regulation is meeting its stated aim efficiently, and not only the costs and negative impacts of the regulation;
- in recommending policy options, the Inquiry should consider the adequacy of consumer protections in promoting consumer confidence, as well as the behaviour of consumers in facilitating competition; and
- the Government consider including an expert in consumer policy on the Inquiry panel.
A full copy of our submission is available by clicking: Financial System Inquiry—Draft Terms of Reference.