Rudd, Iemma unveil plans for financial centre

THE federal and NSW governments have announced separate plans to advance Australia's position as a regional financial hub.

Prime Minister Kevin Rudd said a unit would be established in the Treasury Department dedicated to securing Australia's future as a financial centre.

NSW Premier Morris Iemma announced plans to develop Sydney's Barangaroo site, near Darling Harbour, into a major financial hub in the Asia-Pacific.

Treasury officials would report back to the Government by the end of the year with a plan that would ensure Australia's financial sector was "among the most competitive in the world and that Australian financial services businesses can succeed in global markets", Mr Rudd said.

The Government would launch an "Olympic bid-style approach" to claim a bigger chunk of the global financial services market, Assistant Treasurer Chris Bowen said.

The approach would include a "permanent bid team" backed by the newly formed Treasury unit. Mr Bowen plans to deliver progress reports to parliament.

The initiatives continue a long-running campaign by the previous Liberal-National coalition government to make Australia a regional hub for financial services in the face of strong competition from Tokyo, Singapore and Hong Kong.

Politicians want to take advantage of global capital markets, ageing populations and a growing middle class in Asia, to make Australia's commercial capital, Sydney, a key financial centre for the region.

"Within our neighbouring economies of the Asia-Pacific region, despite the recent volatility, we are seeing the strong underlying trends that will continue to drive growth and provide opportunities for Australia's financial sector," Mr Rudd said in Sydney yesterday.

A roadshow is being planned to promote Australian financial services to key markets in Asia.

New tax incentives were likely be a feature of the Government's approach, Mr Bowen said, and would be examined under the current review of the taxation system conducted by Treasury Secretary Ken Henry.

In NSW, Premier Iemma hopes to take advantage of the global credit crunch and the thousands of job losses expected in the New York and London financial centres. "Government in partnership with the successful proponent of Barangaroo will focus on attracting financial services firms to Sydney and Barangaroo," Mr Iemma said.

"This means targeting institutions around the globe that may be wanting to reduce costs in expensive centres such as London, New York or Hong Kong."

He said the time was ripe to begin marketing Sydney as a relocation option for offshore banks and corporates as the fallout of the financial market turmoil took hold.

Additional reporting: Dow Jones Newswires

 Note: already incoming ceo of UBS to be from ozland. See source here.