04 Aug Key challenges and opportunities for the financial services market in Australia and beyond
The TAS executive team recently attended an Australia-Israel Chamber of Commerce (AICC) business lunch at Shangri La Sydney with a keynote address from Nicholas Moore, CEO, Macquarie Group.
Mr Moore discussed the continued growth of Macquarie Group’s global operations and the implications of the company’s recent developments in the world’s major economies. Mr Moore is paving the way for change by leading the growth of Macquarie Group’s global platform.
The key insights we took away from the keynote address and networking session include:
1. Growth continues globally across financial services. Growth is continuing in financial services across the globe, with lead indicators improving significantly. World economies are in a positive territory, from China to the US, to the EU zone and Australia. Currently, the US has a healthy labour market. Their wage growth is up, and the lowest paid workers are experiencing the highest growth in wages. Their housing market and energy investment are on the rise.
2. Is China experiencing ‘real reform’? China’s transition story is now on track. The nation is experiencing substantial growth, but some key concerns remain. Two-thirds of China’s debt is held by the public sector, and state-owned enterprises are seeing the investment increase less ‘productive’ overall. The burning question remains for China: is ‘real reform’ coming?
3. Potential opportunities for Australia to work more strategically with China. There are potential opportunities for Australia to learn from and partner more strategically with China. With their exports, tourism, education and property markets on the rise, China is the regional market we must watch closely.
There are strategic levers that can be pulled. Australia can implement lower currency and increase services exports. We can also tighten monetary policy. We have flexibility in our currency, monetary policy and fiscal policy, so it’s time to start building up the government and private sector
4. Key challenges for the Australian market. Key challenges for the Australian market include lower disposable income, housing affordability and higher energy prices. Businesses can take a stand by selling ‘good news’, illustrating where growth comes from, offering customer-led solutions and seeking broader community endorsement.
Overall, we have plenty of capital availability in Australia: more savings and less borrowing and investment than ever. There is capacity for the government to respond (i.e. debt to GDP), and they are already answering the call.