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Is it time to change how banks work? In Australia they are thinking about it. KV Break up the banks, tax banks more than other firms, and lay siege to them with low-cost competition from public financial institutions such as the Reserve Bank of Australia and the Future Fund. These are some of the ways to bring the banks to heel after the royal commission's disclosures of conflicts of interest, alleged criminal conduct and customer rip-offs to be discussed at the Melbourne Economic Forum on Tuesday. The Productivity Commission also found banking highly concentrated in favour of big banks. Allan Fels, a former dean of the Australian School of Government and chairman of the Australian Competition and Consumer Commission, will tell the forum that the Australian Competition Law should be
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Is it time to change how banks work? In Australia they are thinking about it. KVIs it time to change how banks work? In Australia they are thinking about it. KV Break up the banks, tax banks more than other firms, and lay siege to them with low-cost competition from public financial institutions such as the Reserve Bank of Australia and the Future Fund. These are some of the ways to bring the banks to heel after the royal commission's disclosures of conflicts of interest, alleged criminal conduct and customer rip-offs to be discussed at the Melbourne Economic Forum on Tuesday. The Productivity Commission also found banking highly concentrated in favour of big banks. Allan Fels, a former dean of the Australian School of Government and chairman of the Australian Competition and Consumer Commission, will tell the forum that the Australian Competition Law should be
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Mike Norman considers the following as important:
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Break up the banks, tax banks more than other firms, and lay siege to them with low-cost competition from public financial institutions such as the Reserve Bank of Australia and the Future Fund.
These are some of the ways to bring the banks to heel after the royal commission's disclosures of conflicts of interest, alleged criminal conduct and customer rip-offs to be discussed at the Melbourne Economic Forum on Tuesday. The Productivity Commission also found banking highly concentrated in favour of big banks.
Allan Fels, a former dean of the Australian School of Government and chairman of the Australian Competition and Consumer Commission, will tell the forum that the Australian Competition Law should be rewritten to include a general power of divestiture, administered by the courts, for extreme cases of abuse of market power.
Professor Fels will say this would be preferable to the ad hoc, opportunistic threats to break up banks and energy companies favoured by the Turnbull and Morrison governments and it would have the added benefit of strengthening the prohibition on abuses of market power.
Although such a provision has been rejected by inquiries dating back to the 1990s, Professor Fels will say that the depth and breadth of the misconduct uncovered by the royal commission means new solutions must be considered.
Tax 'economic rents'
"Shifting the relative incidence of taxation from competitive sectors of the economy to rent-heavy sectors would lead to higher investment and economic growth, without imprudently denuding the public revenues at a time when higher public debt could increase vulnerability in risky international and domestic economic environments."
Financial Review