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Government responds to Murray Inquiry

Janine Perrett
Wednesday, October 21, 2015

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Plenty of news around today but let's start wtih the biggie and the belated Government response to the Murray Financial System Inquiry.

Better late than never they say; so it is almost a year after it was first delivered. At least it was released by the Turnbull government with a PM who actually understands the financial system and is more open to adopting most of the recommendations.

So naturally they received lots of plaudits for the move to crack down on interchange fees and a move to do something about companies that gouge customers with exorbitant credit card charges.

Yes I particularly mean you Cabcharge and Qantas. 

But there are plenty of other offenders and excuse me if I recall that when the decision first came to allow merchants to charge the fees, some did not apply any, still don't, while others went beserk. The problem will be policing this.

Still it's a good start and the decision to open up the whole issue of superannuation being used as a tax break for the wealthy is a great move even if it will involve another inquiry into this inqury.

Not many negatives from their response except one big one.

The one key recommendation they didn't adopt was to limit self-managed super funds borrowing for property.

This was against the Murray recommendation and was the right decision. However the fact the Government said they would leave the door open to revisit the issue again should it warrant it is heartening.

At least they are not as dogmatic as the Abbott-Hockey argument about ruling things in and out with little economic rationale except political expediency or ideology.

Speaking of which, Joe Hockey is definitely going.

In other news headlines of varying interest, "Russia is going broke" according to an AFR story. I guess it beats beating them militarily but a wounded bear could be dangerous methinks.

"Investment banker wrongly gives away $8.3 billion"; well that's a change from yesterday's headline about banks wrongly taking money from clients. And Deutsche got their funds back pretty swiftly which is more than happens when the shoe is on the other foot.

In another little aside, another consumer confidence survey released yesterday bucked the trend and dipped two points... if all that other news wasn't around it would presumably have prompted comment about whether the Turnbull sugar hit was waning but it is was mainly a reaction to Westpac lifting interest rates last week.

Still, it's a sign on just how sensitive is consumer confidence, or these interminable surveys at least.

And of course the Westpac rise was based on new capital requirements recommended by the Murray Inquiry which were the first and only things actually implemented thus far so here's hoping the ones of benefit to the customers are next.

Which brings us full circle to the start of the column and the ideal place to stop.

Published: Wednesday, October 21, 2015

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