THE newest federal cabinet minister, Chris Bowen, has set out an ambitious plan for Sydney to lure Islamic finance in a quest to beat the global recession and attract wealth and jobs.
In an interview with the Herald, the big winner from Kevin Rudd’s ministerial reshuffle at the weekend also expressed concern about the conflicts of interest surrounding commission-based superannuation advice. He said that in an ideal world the compulsory employer super levy should rise from 9 to 15 per cent.
NSW MPs were the big winners from the shake-up caused by the forced resignation of Joel Fitzgibbon as defence minister and the snap retirement of Bob Debus as minister for home affairs.
Mr Bowen, 36, becomes the youngest member of the 20-strong cabinet, winning the dual post of Minister for Financial Services, Superannuation and Corporate Law, and Minister for Human Services.
After less than a year in Parliament, the NSW Senator Mark Arbib becomes the Minister for Employment Participation and Minister Assisting the Prime Minister on Government Service Delivery, while Greg Combet becomes a minister with the odd combination of junior defence and climate change.
The new ministry will be sworn in tomorrow and the new Defence Minister, NSW Senator John Faulkner, will immediately head overseas for three days of NATO talks in Brussels about Australia’s role in Afghanistan.
Mr Bowen said Sydney was under-selling itself as a financial services hub for Asia. “I think there’s great opportunities such as Islamic finance,” he said. “The majority of the world’s Islamic population lives in Asia, and Singapore and Kuala Lumpur are trying to corner this market for themselves and I think Australia can play a role. Even if we only take a small percentage of the market it could generate a lot of wealth and a lot of jobs in Australia.”
Mr Bowen said Islamic finance investors were not allowed to earn interest but could make a profit. They also did not invest in alcohol, gambling or weapons.
“You couldn’t put your money into a normal interest-bearing account but there are plenty of products designed in such a way to make those investments.
“This is just one example of the untapped opportunities out there for Australia. We are very good at managing money, and in superannuation we have the fourth-largest pool of funds under management in the world. We’ve developed really good skills but we don’t export those skills.”
Mr Bowen, who was formerly the assistant treasurer, said he had concerns about the commission-based system where financial advisers earn their money from the products they recommend to customers.
“Where you have the issue of commissions you are always going to bring into question the genuineness of the advice. There’s always going to be a perceived conflict, if not a real conflict,” he said. “I think either way it’s better to avoid that conflict. I do think commissions are problematic.”
Asked whether the 9 per cent compulsory superannuation payment by employers should rise to 15 per cent, Mr Bowen said it might not be enough to give people an adequate retirement income.
“In an ideal world, yes, of course, 15 would be more attractive than nine but it is a very difficult environment to raise it to 15 now,” he said.
source : smh