Let's talk up Sydney, says leading banker - Brief Article

Business Asia, Oct 25, 1999

Australia has the credentials to become the region's leading financial hub, but the Federal Government's promotional efforts need a stronger Sydney focus, according to a leading banker.

Macquarie Bank director Mark Johnson, who is also cochairman of the bank's corporate finance group, said the government's efforts to promote Australia as a world financial centre were to be applauded. However, he said federal Finance Minister Joe Hockey was disadvantaged by not being able to talk specifically about Sydney's finance-centre credentials.

"Joe Hockey's been very energetic and focused. But he's got one political problem -- he has to say Australia as a financial centre, but really it's Sydney," Johnson said.

Speaking at an AMCHAM (American Chamber of Commerce) business briefing recently, Johnson said Australia's financial system and recent reforms gave it several advantages over other cities in the Asian region.

"When you look at the competition, you see Singapore, which has done very well but is still a centrally planned economy," he said.

"As for Hong Kong, you've got a number of question marks, legal and political. Is it really a place where you can rely on a contract you've just written or is it possibly something that's going to be subject to other influences?

"And then you've got Tokyo, which is still a highly rigid financial system, demonstrated by the fact that there's been some sort of financial crisis lurking in Japan since 1991-1992, which they have so far been unable to deal with."

India was another country which could compete in the area of financial services in the future, according to Johnson.

"India is obviously a closed economy with a very inefficient finance sector, but what they have got is an emerging technology base, particularly in software, and a large highly educated workforce," he said.

"Somewhere, sometime that may prove to be highly significant."

Johnson said Australia had the most advanced financial sector in the region, a fact which would not be lost on large financial institutions wanting to set up Asia-Pacific bases.

"We've got a strong economy, a strong commercial background, we've got secure institutions and we have an educated and diverse work force," he said. "If you wanted to start a full-service bank or investment bank, this is the only country in the whole region where you can hire staff to do it. In any of the other countries in the region, you would have to send in a bunch of your own people.

"The only handicap is that Australia is a small market so it doesn't have the broad base the United States or Europe enjoys."