Date/TimeDate(s) - 21/10/15
8:30am - 1:00pm
Barossa Room Level 1, Darling Harbour, 100 Murray Street
The Australian Centre for Financial Studies (ACFS) initiated Funding Australia’s Future in 2012 to better understand the changing dynamics of the financial system and its impact on role in future economic growth. The first stage of the project, completed in 2013, analysed the interaction between suppliers of funds, financial sector participants, and end users throughout the economy. The four papers from Stage 2 explored these issues further and provided valuable input to the Financial System Inquiry on how well Australia’s financial sector serves the economy (especially households and business), and how effectively it links the sources and uses of finance for the benefit of Australian society.
This third and final stage of the project, launched in January 2015, explores three specific challenges to the financial sector highlighted by the Financial System Inquiry, Tax System Review and Intergenerational Report. While quite diverse, each of the topics in stage 3 has a bearing on important issues for the future of the financial system and its role in serving the economy. They are:
Dividend imputation and the Australian Financial System: What do we know? – author Prof Kevin Davis
Dividend Imputation was introduced in Australia in 1987. Despite many theoretical and empirical studies, there is little consensus on its effects on the cost of equity capital, share prices, or investment. In contrast, there is general agreement on the effects on corporate leverage and dividend policy, and asset allocation strategies of investors. The objective of this paper is to outline these effects, drawing on and critically reviewing the existing literature to assess what conclusions can be drawn, and sources of disagreement on imputation’s effects.
Big and better data, innovation and the financial sector – author Dr Ian Oppermann
Due to their scale, corporations and governments have traditionally had greater access to data than individuals, creating “Information asymmetry” or “knowledge gaps” between institutions and individuals. Today, the democratisation of data and advanced analytics have allowed smaller players to generate insight, create value and compete with new business models. This paper explores the implications of greater access to data and advanced analytics on the Australian financial sector.
Financial issues in retirement – author Prof Deborah Ralston
Older Australians face three critical financial issues that are intertwined with lifestyle circumstances: achieving adequate financial resources for maintenance of a reasonable standard of living over the retirement phase; the potential need to transition to a different form of accommodation consistent with lifestyle needs and preferences; and the need to provide for an increase in expenditure on medical services in the later stages of life. These three aspects of financing retirement needs raise difficult risk management issues for individuals, government and the private sector. To what extent can the private sector play a role in assisting individuals and reducing the public costs of providing such services?