I am delighted to welcome you today to this important summit.
I thank the New South Wales Government for their support in assembling the peak leadership of Australia's financial institutions, regulators and representatives.
Before we discuss the substantive agenda for today, I want to make some specific remarks about current financial market conditions.
As we know, the past 12 months have brought volatility and continuing uncertainty on global capital markets.
Australia is an open economy, and since the 1980s we have actively pursued deeper integration with the global economy.
No sector of our economy is more globally integrated than the financial services sector.
As a result, we cannot be immune from global developments.
Australia is strongly placed to see our way through these difficult global financial challenges.
Firstly, we have a strong, well regulated banking sector.
Secondly, our banks' balance sheets are still strong compared against their relevant global counterparts and our banking sector is taking sensible steps by putting in place provisions to respond to difficulties.
From day one, the Government has encouraged banks to disclose their positions and address any problems - this is part of the proper, transparent functioning of the financial system.
Thirdly, in general, our corporate balance sheets are strong.
Fourth, in addition to a well-regulated financial sector, we have built a strong surplus - one of the largest surpluses in almost a decade by reducing spending as a per cent of GDP to its lowest level in 20 years - as a buffer to help withstand the challenges now unfolding.
Fifth, we have a comprehensive program of long term economic reform - to build a seamless national economy, a highly skilled workforce, advanced infrastructure, competitive markets and efficient regulation - all of which will underpin the competitiveness of the financial services sector.
Sixth, we have taken steps to strength Australia's financial markets. We have moved to expand the issuance of Commonwealth Government Securities by up to $25 billion, to support an efficient bond market and reduce its vulnerability to adverse shocks.
We have also introduced a Financial Claims Scheme, to provide certainty and protection, and we are reviewing the appropriate disclosure requirements for equity derivatives.
Lastly, the Treasurer, the Governor of the Reserve Bank and I have all been working through international forums - such as the Financial Stability Forum and the IMF - on the crucial issues of liquidity and transparency in the global financial system.
We are working to make sure Australia comes out the other side of these challenges in a strong position compared with other economies.
Before moving back onto the day's agenda I would like to express my disappointment at the recent failure of WTO members to secure a breakthrough in the Doha Round.
At a time of great global economic difficulty, this comes as a body blow to the global economy, and it is a loss of valuable opportunities for Australia.
What we have to do now is get on with the task of where to next - and I'll be engaging in discussions with various international leaders in the days ahead about finding a path forward.
* The Government recognises the enormous export potential of the financial services industry, and is committed to developing policies to establish Australia as a regional financial services hub.
* Globally, financial services exports are worth more than $150 billion per year. [OECD 2005]
* Global trade in financial services has been growing faster than in any other services sector, at an average annual rate of 17 per cent this decade [OECD 2007].
* Australia has a sophisticated financial sector with a track record of innovation and significant recent successes in global markets.
* Assets under management in Australia exceed $1.1 trillion US dollars, making it the largest funds management industry in Asia and the fourth largest in the world.
Within our neighbouring economies of the Asia-Pacific region, despite the recent volatility, we are seeing the strong underlying trends that will continue to drive growth and provide opportunities for Australia's financial services sector:
* an increase in the volume and frequency of the movement of capital;
* a growing middle class, and
* ageing populations and savings growth, including growth in assets under management.
The Government's overall economic agenda is founded on:
* responsible economic management;
* a comprehensive program of economic reform;
* and intelligently investing in the industries of the future.
And the Government is convinced of the very substantial future potential for Australia's financial services sector - both domestically and in regional and global markets.
This is something that I addressed two years ago as Shadow Trade Minister, when I spoke to the Investment and Financial Services Association conference in Brisbane.
And since taking office, we have advanced an agenda across the full spectrum of policies that affect your industry.
* Tax: we have cut withholding tax rates for established real estate investment trusts to a final rate of 7.5 per cent by 2010-11 (from 30 per cent) - to make it one of the most competitive in the world.
* Deregulation: We are making progress towards consistent, national regulation of credit products. We are advancing this work through the COAG Business Deregulation and Competition Working Group, as part of our wider reform agenda to build a seamless national economy.
* Education: We recognise the sector's need for highly skilled and multilingual graduates, and we look forward to continuing discussions with industry on how we build the workforce skills that we need for the future. Already, we have invested $62 million to help give Australian school students the language skills needed to engage with our Asian neighbours.
* In addition, we are conducting the Bradley Review of Higher Education to examine the responsiveness of the higher education sector in altering the course mix to meet student and employer demands.
Successful expansion into global markets requires a partnership between government and the financial services sector.
One of the most critical ways in which the Government can act is to enable greater access to overseas markets for financial services, which are often subject to significant barriers to entry.
That is why I have hosted financial services industry lunches each of my overseas visits - in the United States, in China and in Japan.
I am pleased that we have already achieved some results.
Just over a month ago, Australia secured approval as an investment destination under the Chinese Qualified Domestic Institutional Investor Scheme.
This will open opportunities for Chinese banks to offer investment opportunities in Australia - providing access to one of fastest growing markets for funds management in the world.
Chinese funds under management stood at US$451 billion at the end of 2007.
By the end of this year could be as much as US$720 billion.
The Government is also actively pursuing improved access to the Hong Kong market (and indirectly to the mainland Chinese market), by pursuing mutual recognition agreements to help lower barriers for Australian funds managers in the Hong Kong market.
In the US in March earlier this year, I announced with the Chair of the US Securities and Exchange Commission (SEC) Chris Cox that we would work together to develop mutual recognition of securities regulation - and we hope to be in a position to make an announcement on this in the near future.
And just last month, we brought into force an agreement for mutual recognition of securities offerings between Australia and New Zealand.
Across this range of key initiatives in tax, deregulation, education, infrastructure and overseas market access - we're sending the message that Australia is serious about competing as a global financial services provider.
We recognise that there is more work to do.
This Summit is an important next step to chart the path forward.
This is the time to plan ahead for the future of the industry beyond the current global difficulties.
I know that several further important ideas will emerge from today's discussions.
It's important that these ideas don't simply get lost in the bureaucracy.
That's why the Government will also be establishing a dedicated team within the Treasury to take charge of the financial services agenda for the Government.
This team will coordinate the Government's policy actions in this area and be a single point of contact for the sector.
This team will also build on the ongoing work we have been doing across the Government in with industry organisations such as IFSA, the ABA and the Insurance Council, as well as with individual businesses.
This team's first task will be reporting on the outcomes from today's Summit and establishing priority areas for action before the end of the year.
The Government's Financial Sector Advisory Council will be charged with oversight of this team and advising on the Summit's recommendations.
On one other matter, the Government understands the importance of taxation for the international competitiveness of the financial services sector - as with other parts of the Australian economy.
That is why the Government has initiated a root-and-branch review of Australia's tax and transfer system, led by Ken Henry. The taxation issues raised in today's summit will be referred for consideration as part of the Henry Review.
Finally, I want to raise one further matter for your thought and feedback.
We would appreciate your efforts to identify those barriers to overseas market access that most restrict Australia's capacity to expand our financial services exports.
The Government is committed to working with the sector to help overcome those constraints.
And if it will assist our efforts to expand the sector's global opportunities, I would like to prepare to lead a delegation of senior industry leaders to key Asian economies to showcase the strengths and sophistication of Australia's financial services sector.
We want to work to ensure that the financial services sector is an important part of Australia's global branding.
Thank you again for your attendance at today's Summit.
Today's discussions will be an important input into Government policy making.
I look forward to today's outcomes and to your continued input as we work together in building an industry that has an important role to play in building and sustaining Australia's prosperity.