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Four pillars policy shaky

A recent treaty signing has opened the doors to complete foreign ownership of Australia’s four largest banks.

This could have a ripple down effect on WA’s small businesses.

National Civic Council state president Richard Egan said the May signing of the Fifth Protocol to the General Agreement on Trade in Services drove another nail into the coffin of the Four Pillars bank policy.

The treaty puts in place the results of the World Trade Organisation’s financial services negotiations which concluded in December.

These entail significant liberalisation across 90 per cent of the world’s financial services trade.

The protocol is also in tune with government commitments outlined in the Trade Outcomes and Objectives Statement, released early this year.

Trade Minister Tim Fischer said the protocol represented a great opportunity for Australian exporters of financial services and required no new commitments beyond those already deemed to be in Australia’s economic interests.

“Our commitments have been made in areas where we concluded action should be taken anyway to improve the efficiency and competitiveness of the financial sector, particularly as identified by the Wallis Inquiry,” Mr Fischer said.

But Mr Egan believes the protocol removes the blanket prohibition on foreign takeovers of the four major banks as it specifically excludes any requirement that the proposed foreign takeover “demonstrates economic benefits or provides for Australian equity participation”.

“The signing of the Fifth Protocol, coupled with recent calls from the CEOs of major banks for the end of the four pillars policy, suggests the Government may be nearer to giving the banks what they want,” he said.

Combined Small Business Assoc-iations of WA president Oliver Moon said one had to wonder why the negotiations leading up to the treaty signing were not done transparently.

“The negotiations were done without seeking approval from small business, although it will have a ripple effect on those who run small businesses,” Mr Moon said.

In a letter to a constituent, Forestry and Conservation Minister Wilson Tuckey’s chief of staff Norman Haywood wrote: “As the committee (on treaties) has indicated this is a non-controversial report, it was not circulated to all Senators and members unless requested. “I am advised the protocol does not change the current situation regarding foreign ownership of Australia’s four banks.

“Foreign investment in Australia’s four banks is still controlled by the Foreign Investment Review Board.”

Offshore Logistics controller Roger Davenport said foreign banks were not interested in national benefits – just the mighty dollar and making profits for shareholders.

“We are going to be subservient to other countries,” Mr Davenport said. “We are bending over backwards to appease other nations.”

Mr Egan said the major banks were already milking small business, farmers and families.

“This tendency will only get worse if the ultimate control of banks is allowed to go overseas to megabanks with no commitment whatsoever to Australia’s well being,” he said.

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