Prime Minister Julia Gillard says the marathon election campaign which will dominate public life this year is all about delivering certainty, but the length of the campaign risks leaving the financial industry hanging on several key issues.
There is no doubt the Labor government has delivered some significant financial reform: there has been Future of Financial Advice, MySuper and Stronger Super, and transition of equity market regulation to the Australian Securities and Investments Commission.
These are all positive changes, and while the opposition has quibbled at various points about each of them, the reality is that they are likely to stay more or less intact regardless of who wins the election.
The consultation process on these issues was lengthy. Ultimately, a form of consensus was reached that the Coalition is unlikely to undo, unless it reveals itself to be much more ideologically driven than it is making out to be right now.
What won’t happen before the election
With these reforms the issue is whether either government – at the ministerial and administrative levels – will have their eyes on the ball closely enough to implement them effectively in an election environment.
Reform is not just a concept, it is also about execution, and anyone who has been close to the process of government knows full well that during election campaigns the whole machinery grinds to a halt.
At a departmental level decisions are deferred until the election victor is known, in case the incoming administration wants to undo things or at least do things differently. Public servants throw their hands up and cry “neutrality” as an excuse to do nothing.
So as we endure seven months of campaigning, we have to ask if the reforms the government has fought so hard so are actually going to be implemented with the energy and rigour they need to be effective.
Will things drift on, in a kind of limbo, until the election result is known. They probably will. Then there are other, minor reforms, that are now unlikely to receive much attention at all.
What should happen after the election
The government has cogitated for most of its two terms on issues such as reforming the bond market and creating the conditions to foster Australia as a regional funds management centre, the so-called Johnson Report recommendations.
Inevitably, these issues will sink to the bottom of the pile and will take some time get back on the agenda, of either Labor or Coalition governments, after September.
And the timing of the elections means that if there is a change of government, the rest of 2013 will be occupied with the transition, which will then bump up against Christmas and New Year. So in reality we can’t expect any serious hand on the government tiller until February 2014 – a full year away.
The big question for the both parties is a new bank enquiry, an updated Campbell or Wallis Report.
Labor has indicated it doesn’t feel one is necessary, while Tony Abbott has sounded as if he is in favour, although the scuttlebutt is that he might just use that as a way to go after the union-linked industry superannuation fund sector.
One thing people approaching retirement do not like is uncertainty. They’ve had the global financial crisis and the slump in account balances, which led many to set up self-managed funds.
Now there are rumours of different taxation approaches from either party, and the spectre of a major bank enquiry which, if the Coalition go that way, could recast the whole financial industry yet again.
Julia Gillard might have reasoned that a nine-month campaign gives her the time to get her message through, and hope that Tony Abbott slips up.
As it continues to evolve after the turmoil of the global financial crisis, the financial industry, however, does not need a nine-month campaign.