Government introduces legislation to ‘modernise’ financial system

The Treasury Laws Amendment (Financial Market Infrastructure and other measures) Bill was introduced to Parliament on 27 March, Treasurer Jim Chalmers MP announced.

The bill seeks to implement two reforms for the purpose of maximising the “economic opportunities of cleaner, cheaper and more reliable energy and strengthen Australia’s financial system”.

The reforms look to introduce a new regime to protect Australia’s financial market infrastructure in the event of a crisis and new mandatory climate reporting requirements for big companies, the Treasurer confirmed.

“After a decade of delay and denial under the Coalition, we’re taking action on climate reporting to support more investment in cheaper and cleaner energy and help companies and investors manage climate risks,” Chalmers said.

“This legislation will introduce standardised, internationally aligned reporting requirements for businesses, to ensure they are making high-quality climate‑related financial disclosures.”

In terms of enhancing Australia’s financial market infrastructure, the reforms “address a gap” in financial system regulatory arrangements and seek to implement an “important and longstanding recommendation” from the Council of Financial Regulators (CFR).

According to the Treasurer, the legislation will give the Reserve Bank of Australia (RBA) power to quickly resolve crises that may impact the critical financial market infrastructure while strengthening the regulatory powers of the RBA and the Australian Securities and Investments Commission (ASIC).

“It will also ensure continuity of clearing and settlement services in the face of a crisis,” Chalmers continued.

“Whether it’s climate disclosures, financial markets, or many of our other important changes, the Albanese Government has a broad and ambitious economic reform agenda.

“Our economic reform agenda is all about modernising our economy and providing more certainty for more investment in Australia, and that’s what this legislation will deliver.”

Standing committee releases mortgage industry recommendations

On the same day as the Treasury’s announcement, the House standing committee on economics released its Better Competition, Better Prices report.

The report included recommendations aimed at improving competition and transparency in mortgage lending.

The committee stated that there has been an increase in pricing discrimination from banks that are charging new customers lower interest rates than customers who have been with the bank for a longer period of time.

Part of the recommendations was that the government should consider a pilot program for tracker mortgages, with co-operation with the banking sector.

[RELATED: Mortgage changes recommended by economics committee]