Mark Johnson is the architect of the plan to develop Australia into a regional financial hub in the 'Australia As A Financial Centre' report for the Australian Government. He believes the export of financial services can double in the next five to seven years. Exports account for only 3 per cent of the sector's contribution to the economy at present, compared with 50 per cent in Britain, 25 per cent in Singapore and 8 per cent in Canada and the US, he has pointed out. 'However, it was a reasonable ambition for financial service exports to increase their "value-add" to the economy from 3 per cent to 6 per cent' he said in an interview with The Australian.
"We are not trying to build a financial system on steroids, with artificial inducements," he said."What we are talking about is making sure our financial services sector is in accord with open competitiveness and efficiency."
Mr Johnson is the former deputy chairman of Macquarie Group.
Among numerous recommendations, the Australian Financial Centre Forum study said the local market would be more internationally competitive if the withholding tax on the interest income that foreign banks earn from their Australian branches was removed. Mr Johnson believes the report's recommendations would increase competition in the local banking market by encouraging major Asian banks to open branches in Australia.
He said while the Australian banking market was in better shape than other parts of the world, there were still opportunities to increase competition in the sector. "It's very important that we have as much competition as possible in this market," he said.
"Our recommendation on withholding tax on foreign banks goes directly to that point. "We think some of the regional shifts will see some changes in Australia. I think some of the big Japanese banks have limited growth opportunities in Japan, and as their customers increase outside of Japan, they will come back to Australia".
"We are seeing at the moment more activity from the big Chinese banks. They will come to Australia on the traditional routine of financing their customers, but they will move to financing trade and financial investments and then local operations."
"We are not trying to build a financial system on steroids, with artificial inducements," he said."What we are talking about is making sure our financial services sector is in accord with open competitiveness and efficiency."
Mr Johnson is the former deputy chairman of Macquarie Group.
Among numerous recommendations, the Australian Financial Centre Forum study said the local market would be more internationally competitive if the withholding tax on the interest income that foreign banks earn from their Australian branches was removed. Mr Johnson believes the report's recommendations would increase competition in the local banking market by encouraging major Asian banks to open branches in Australia.
He said while the Australian banking market was in better shape than other parts of the world, there were still opportunities to increase competition in the sector. "It's very important that we have as much competition as possible in this market," he said.
"Our recommendation on withholding tax on foreign banks goes directly to that point. "We think some of the regional shifts will see some changes in Australia. I think some of the big Japanese banks have limited growth opportunities in Japan, and as their customers increase outside of Japan, they will come back to Australia".
"We are seeing at the moment more activity from the big Chinese banks. They will come to Australia on the traditional routine of financing their customers, but they will move to financing trade and financial investments and then local operations."