Bank chiefs back calls for longer election cycles
By Millie Muroi
The bosses of some of Australia’s biggest banks have backed calls for longer election cycles, arguing it would provide greater stability for businesses and improve policymaking as the country battles a slowing economy.
At the Australian Financial Review’s banking summit in Sydney on Tuesday, Westpac chief executive Peter King said four-year election cycles for federal government, instead of the existing three-year terms, would give businesses more certainty and help to drive growth.
Westpac chief executive Peter King said four-year terms would help give businesses more certainty.Credit: Louise Kennerley
“Three years is too short,” he said. “Businesses operate best when they know the rules, they know the requirements, and they don’t change. Long-term policy that doesn’t move around is critical.”
King said it was especially important to have continuity in government for longer-term decisions and investments. “Some of the long-term investments we’ve got in the energy transition and infrastructure are critical, and we need to continue on those,” he said.
In February, Prime Minister Anthony Albanese reiterated his support for four-year terms in federal politics, with Opposition Leader Peter Dutton backing the prime minister’s view earlier this month.
Albanese said four-year terms were “common sense”, and while Dutton said he was prepared to discuss a strategy with the prime minister he noted it would be tough to sell to voters as the change would require a referendum.
It comes as Australia’s economic growth slowed to 0.2 per cent in the final three months of last year, and business leaders and politicians look for ways to improve productivity and economic growth.
The country’s GDP growth expected to slow from 3.1 per cent over the past 40 years to roughly 2.2 per cent over the next 40 years according to Treasury’s intergenerational report.
Commonwealth Bank boss Matt Comyn said he would also support a move from three to four-year election cycles.
“Of course, it’s not up to me, and I understand the practical difficulties, but we should extend the minimum term from three to four years,” he said, noting there would ideally be either a state or federal election every two years, with nothing in between.
Comyn said this would allow for harmonisation between states and the federal government when making reform.
Four-year federal terms have been supported by businesses across the economy, with Business Council of Australia president Geoff Culbert saying earlier this month that three-year terms were a key contributor to what he called a crisis of short-term thinking which was limiting policy reform and holding back the country.
“Our three-year term limits are too short, which means we’re permanently in election mode and governments are in a constant fight for survival,” he said.
NAB chief executive Ross McEwan, meanwhile, warned that while there was only a small amount of stress in the banking sector, the regulatory pressure on Australian banks could unintentionally be pushing borrowers towards riskier loans including payday lending.
McEwan also said he was frustrated at the lack of regulation for companies such as Afterpay. “If it looks and feels like a payment, it’s a payment,” he said. “And if it looks and feels like credit, it’s credit. What is so difficult about this?”
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