Homepage
PR Newswire
29-10-2014, 11:00 PM
Reform for low-growth future, says Suncorp chief
THE AUSTRALIAN OCTOBER 30, 2014 12:00AM
Suncorp Boss
Suncorp chief executive Patrick Snowball says the public must accept the need for structural reforms. Photographer: Liam Kidston Source: News Corp Australia
SUNCORP chief Patrick Snowball has urged regulators not to dwell on recommendations from the Murray financial system inquiry and questioned the government’s policy to tackle insurance affordability for North Queensland.
Speaking at an American Chamber of Commerce event yesterday, Mr Snowball also backed recent comments by business that political leaders and the public must accept the need for long-term structural reforms to ensure the nation’s future prosperity.
Mr Snowball, who is British, said when he arrived in Australia five years ago the “brutal” political discourse “robbed” the nation of the same opportunity as other Western economies after the global financial crisis to embark on “long-term structural reforms that would serve it well when inevitable challenges would emerge”.
It follows comments by Rupert Murdoch, the executive chairman of News Corp, publisher of The Australian, this month that leaders had mistakenly responded too much to domestic “political outcry” after the crisis rather than reform.
“Now, for the first time in at least a couple of generations, Australia does find itself confronting many of those challenges,” said Mr Snowball.
“The China tailwinds are moderating, the fiscal position needs to be adjusted, businesses need to transform and globalisation is unavoidable. Collectively, we need to acknowledge that we are now entering a period of lower economic growth and front up to the challenges of a mature first world economy.
“Business will need to adapt to this low growth environment by driving efficiencies across their cost bases; just as the electorate will need to adapt to lower government outlays as a means of addressing the budget.”
Ahead of the Murray inquiry’s final report next month, Mr Snowball reiterated it should back changing the banking rules that force smaller banks to hold more capital against mortgages, and end the big four’s advantage from the implied government guarantee.
Analysts, however, believe the inquiry will not yield to the regional banks’ lobbying for lower “risk weights”, and instead focus on higher tier one capital levels for the major banks.
“I am also a little anxious about the impetus that will be placed on achieving competitively neutral capital, funding and regulatory settings and the timing in which that will happen,” said Mr Snowball.
After the government last week released a range of initiatives to tackle insurance affordability in North Queensland, including a comparison website, Mr Snowball said efforts to increase natural disaster mitigation would be more effective.
“While the intent is right, I’m not convinced that these initiatives will drive the right outcomes,” he said.
“In my experience, aggregator sites are too sharply focused on price and do not place enough emphasis on product features and inclusions, a major issue after the Brisbane floods.”
According to KPMG, a proposed $250 million annual disaster mitigation program could produce a $6.2 billion increase in GDP over 10 years.
THE AUSTRALIAN OCTOBER 30, 2014 12:00AM
Suncorp Boss
Suncorp chief executive Patrick Snowball says the public must accept the need for structural reforms. Photographer: Liam Kidston Source: News Corp Australia
SUNCORP chief Patrick Snowball has urged regulators not to dwell on recommendations from the Murray financial system inquiry and questioned the government’s policy to tackle insurance affordability for North Queensland.
Speaking at an American Chamber of Commerce event yesterday, Mr Snowball also backed recent comments by business that political leaders and the public must accept the need for long-term structural reforms to ensure the nation’s future prosperity.
Mr Snowball, who is British, said when he arrived in Australia five years ago the “brutal” political discourse “robbed” the nation of the same opportunity as other Western economies after the global financial crisis to embark on “long-term structural reforms that would serve it well when inevitable challenges would emerge”.
It follows comments by Rupert Murdoch, the executive chairman of News Corp, publisher of The Australian, this month that leaders had mistakenly responded too much to domestic “political outcry” after the crisis rather than reform.
“Now, for the first time in at least a couple of generations, Australia does find itself confronting many of those challenges,” said Mr Snowball.
“The China tailwinds are moderating, the fiscal position needs to be adjusted, businesses need to transform and globalisation is unavoidable. Collectively, we need to acknowledge that we are now entering a period of lower economic growth and front up to the challenges of a mature first world economy.
“Business will need to adapt to this low growth environment by driving efficiencies across their cost bases; just as the electorate will need to adapt to lower government outlays as a means of addressing the budget.”
Ahead of the Murray inquiry’s final report next month, Mr Snowball reiterated it should back changing the banking rules that force smaller banks to hold more capital against mortgages, and end the big four’s advantage from the implied government guarantee.
Analysts, however, believe the inquiry will not yield to the regional banks’ lobbying for lower “risk weights”, and instead focus on higher tier one capital levels for the major banks.
“I am also a little anxious about the impetus that will be placed on achieving competitively neutral capital, funding and regulatory settings and the timing in which that will happen,” said Mr Snowball.
After the government last week released a range of initiatives to tackle insurance affordability in North Queensland, including a comparison website, Mr Snowball said efforts to increase natural disaster mitigation would be more effective.
“While the intent is right, I’m not convinced that these initiatives will drive the right outcomes,” he said.
“In my experience, aggregator sites are too sharply focused on price and do not place enough emphasis on product features and inclusions, a major issue after the Brisbane floods.”
According to KPMG, a proposed $250 million annual disaster mitigation program could produce a $6.2 billion increase in GDP over 10 years.