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Markets, not meddling, are key to economic growth

Australia’s next treasurer must prioritise efficient markets over heavy-handed regulation to drive growth, resilience and long-term prosperity.

Diane Tate Diane is the CEO of the Australian Finance Industry Association.
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Whoever is treasurer after tomorrow's election should remember access to capital and efficient markets are what fuel economic dynamism, writes AFIA CEO Diane Tate. AAP Image / Christian Gilles.

Regardless of the outcome of tomorrow's election, one of the first items on the incoming treasurer’s agenda will be the review into small and medium-sized banking.

Overseen by the Council of Financial Regulators, the review was announced in mid-2024 and is due to report in July.

Much will depend on its findings — particularly what they reveal about the government and regulators’ disposition towards regulation and whether efficient financial markets will play a central role in supporting investment and growth.

We are already seeing early signs of this shift during the campaign.

The Coalition, for example, has proposed directing APRA to reduce its mortgage interest rate buffer. Labor, meanwhile, has announced a plan to guarantee housing borrowing up to 95% loan-to-value (LVR) in certain cases.

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