ABA expands its horizons to the national economy
The Australian Bankers' Association has signalled it plans to involve itself more in the national economic debate as it tries to create a political link between the health of the banking sector and the health of the broader economy.The ABA yesterday released a paper on productivity growth written by former Reserve Bank analyst Brendon Harper, whom the ABA hired in April this year.Harper's paper breaks little new ground in the productivity debate. It underscores the banks' role in Australia's economic outperformance through the Global Financial Crisis. It also calls for reforms to lift Australia's low recent productivity growth, though with few specific recommendations.It is understood the paper was originally planned for release several months ago, before the recent explosion of commentary on Australia's productivity performance.But the paper discloses the ABA's strategy in its first line, where it declares: "The health of our banks and the health of our economy are inseparable".ABA CEO Steven Münchenberg told Banking Day that the banking industry needs to have a voice in the economic policy debate."Just as strong banks benefit from a strong economy, as we have seen through the global financial crisis, banks clearly benefit from a strong economy," Münchenberg said.Münchenberg is a former key strategist and deputy CEO of the Business Council of Australia, where he had to build policy across a broad range of industries. That experience may help him successfully broaden the ABA's commentary without unnecessarily alienating other interest groups.And by linking banking's fortunes to those of the economy, the ABA may avoid being constantly on the defensive against criticism of the industry.Other industry organisations, such as manufacturing lobbyist the Australian Industry Group and the mining industry's Minerals Council of Australia, are seen by many to have increased their influence over many years by successfully and proactively linking their members' interests with the national interest.In contrast, for most of the past 12 years the ABA has been relatively narrowly focused on rebutting the claims of banking industry critics. The ABA's public image has remained stained by memories of the secret "cash for comment" payments to broadcasters Alan Jones and John Laws, revealed in 1999..Münchenberg argued vigorously last year that the banking industry needs to rebuild its reputation or leave itself open to political and regulatory intervention. Events since have bolstered his argument. Over the past ten months politicians have competed to "get tough with the banks".