The Abbott government is pressing ahead with secret trade negotiations aimed at bringing about radical deregulation of Australia's banking and finance sector, WikiLeaks documents reveal.
Highly sensitive details of the Trade in Services Agreement (TiSA) negotiations, obtained by Fairfax Media, show Australian trade negotiators are working on a financial services agenda that could end the Australian government's ''four pillars'' banking policy and allow foreign banks much greater freedom to operate in Australia. The changes could also see Australians' bank accounts and financial data freely transferred overseas and allow an influx of foreign financial and information technology workers.
Financial Services Union national secretary Leon Carter said there was ''a real danger'' that the negotiations ''could undo the effective regulation that sheltered Australia from the global financial crisis'' and result in ''a tidal wave of finance job losses in Australia''.
But Trade Minister Andrew Robb said the negotiations were a "key focus" in his policy to "open as many doors as possible" for Australian financial services. "Financial services are a key part of the negotiations for us given the strength of our sector in areas including banking and wealth management, particularly in the major, growing markets of Asia," he said.
A confidential negotiating text provided to Fairfax Media by WikiLeaks reveals that the TiSA talks have big implications for Australia's financial system, potentially pre-empting the Abbott government's Financial System Inquiry which, chaired by former Commonwealth Bank chief executive David Murray, will present an interim report on July 15.
World Trade Organisation members including Australia, Canada, Japan, South Korea, Taiwan and the European Union are engaged in the negotiations.
Australia's major banks strongly support the process, with ANZ arguing that there is ''a significant opportunity not only for lowering barriers to trade for current parties to the negotiations, but also to set important targets for further liberalisation in the future by nations currently not party to the negotiation''.
Key provisions in the leaked draft text include a US proposal for a ''standstill'' on financial regulation.
Dr Patricia Ranald, research associate at the University of Sydney and convener of the Australian Fair Trade and Investment Network, said the US wants to ''tie the hands'' of governments.
''Amendments from the US are seeking to end publicly provided services like public pension funds, which are referred to as 'monopolies' and to limit public regulation of all financial services,'' she said.
''They want to freeze financial regulation at existing levels, which would mean that governments could not respond to new developments like another global financial crisis.''
The draft TiSA text also includes US and European Union proposals for each party to the agreement to allow financial service providers of other parties the right to establish or expand within its territory ''including through the acquisition of existing enterprises''.
The application of ''most favoured nation'' and ''national treatment'' to the acquisition of financial services providers would preclude an Australian government blocking foreign takeovers of banks, although it is possible that Australia could obtain a ''carve-out'' for its ''four pillars'' policy preventing the big four banks from merging and legislation that limits individual shareholdings in Australian financial sector companies to 15 per cent.
Foreign financial institutions would be allowed to bring ''temporary'' workers into Australia, including computer, telecommunications, actuarial and legal specialists. ''Temporary'' is not defined in the leaked text.
The US has also proposed measures that would allow Australian customers' financial data to flow freely to other TiSA countries where Australian privacy laws would not apply.
ANZ argues that data protection and privacy laws are becoming ''an area of significant divergence'' between countries, inhibiting the free provision of financial services.
The US Chamber of Commerce says TiSA must ''prohibit restrictions on legitimate cross-border information flows … [and] ensure that cloud computing services are freely available, regardless of facility or end-user location.''
Parliamentary consultation on TiSA has been minimal with the talks only briefly mentioned in Senate estimates committee hearings.
The leaked draft TiSA financial services chapter can be found at www.wikileaks.org.