(Last updated: 17 Feb 2009)

Overview

The fourth largest sector in Australia’s economy, the finance and insurance industry generated A$81 billion to the Australian economy or 8.1 per cent in 2007-08 (Source: Australian Bureau of Statistics, Cat. No. 5206.0, National Income, Expenditure and Product).

The industry is divided into three sectors – insurance, accounting for around 68 per cent currently; finance at around 28.7 per cent; and services to finance and insurance at about six per cent. Our funds management industry is the world’s fourth largest and is now worth over $1 trillion (as at 31 October 2008).

Insurance has grown significantly, largely thanks to the compulsory superannuation payments system brought in several years ago, and the resulting investment returns and tax rulings. Consequently, superannuation now makes up more than half the insurance sector’s total revenue. The next biggest subdivisions are Life, General and Health insurance, in that order.

In finance, the size and sophistication of the Australian financial market and the assets pool managed, combined with the industry’s world-class skills base, has helped make it a major centre of capital markets activity in the Asia Pacific. Indeed, after Japan, Australia has the largest and most liquid stock market in the region and the seventh largest in the world. This, in combination with the prospects for substantial growth is behind Australia’s attractiveness to global firms seeking to establish and expand operations in Australia. Today, they include such internationally recognised names as HSBC, Citibank, People’s Bank of China, Bank of Scotland, Bank of Tokyo, Rabobank, and so on. Seventeen of the top 20 US global funds managers also have a presence in Australia.

Australia’s banking system is highly regarded as transparent, competitive and sophisticated and was named both the fourth soundest system in the world and number three for regulation of securities exchanges (out of 134 countries) by the World Economic Forum in 2008 (Source: World Economic Forum The Global Competitiveness Report 2008-2009).
Recognising that Australia’s reputation as world’s most resilient economy (Source: IMD World Competitiveness Year Book 2008) combined with our rapidly expanding and highly respected finance industry could be the makings of a regional financial services hub, the Australian Government established the Australian Financial Centre Forum, in late 2008.

Key opportunities

Global trade in financial services is the fastest growing area of the international services sector. The US, China and India are seen as key international markets to pursue for Australian financial services exports, which already have a global footprint on every continent, but especially in North America and Asia Pacific. This is a direct reflection of Australia’s recognised strengths in investment banking, funds management and property and infrastructure funds.

How can we help you?

With a worldwide network of highly experienced and qualified staff, Austrade provides a number of dedicated and tailored services to Australian exporters.

Austrade also works closely with the International Legal Services Advisory Council (ILSAC) and has helped organise offshore legal missions with ILSAC. Countries visited to date include China, India, Thailand and Malaysia.

For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au.