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INVESTING
IN VICTORIA’S
FUTURE
The Victorian
Government’s
Action Plan
for the Financial
Services Industry
CONTENTS
Minister’s Foreword 4
Introduction 5
Financial Services and the Victorian Economy 6
Victoria’s Competitive Advantages in Financial Services 10
Funds Management and Superannuation in Victoria 12
Victoria’s Financial Services Industry: Strategic Priorities 14
– Growing Victoria into a World Class Location
for Financial Services in the Asia Pacific Region 14
– Building Victoria’s Capability in Financial
Services Research 15
– Developing Victoria’s Skills and Education Base 18
– Promoting Skills and Education
in Financial Services 19
– Positioning Victoria Internationally
as a Financial Services Centre 20
– Exporting Victoria’s Financial Services Education
and Expertise 21
– Exploring New Growth Opportunities
in Financial Services 22
– Strengthening Industry Advocacy
and Consultation 27
– Growing the Whole State: Developing Financial Services
and Investment in Regional Victoria 28
– Summary of Initiatives 29
Notes 30
Acknowledgments 30
Contact 30
Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 3
MINISTER’S
INTRODUCTION
FOREWORD
Victoria is already a world class location The major initiative of the Action Plan will The Financial Services Industry Strategic Victoria’s Financial Services Industry:
for financial services. The challenge for be the establishment of a Melbourne Audit Report, the result of an extensive Strategic Priorities
Government and industry is to ensure Centre for Financial Studies, specialising process of consultation with Victoria’s The Victorian Government recognises
Victoria remains an attractive business in investment and financial services financial services industry, was launched by the economic and strategic significance
centre in the dynamic and increasingly research. The Centre, and supporting the Minister for Financial Services Industry, of the financial services industry and
global world of financial services delivery. initiatives, will enhance and showcase the Hon Tim Holding MP, in June 2003. is committed to building the industry
Victoria’s research strengths, and provide in Victoria.
Investing in Victoria’s Future is our This Action Plan is the Victorian
a focus for the State to further develop
ambitious and collaborative response to Government’s response to the issues Investing in Victoria’s Future builds on
its role as a financial centre.
that challenge. Consolidating Victoria’s and opportunities identified in the Industry the priorities identified in the Financial
existing financial services strengths and The Victorian Government will continue Audit. It focuses on building Victoria’s Services Industry Audit by putting forward
capitalising on emerging opportunities will to work in partnership with industry, strategic capabilities and strengths in strategic initiatives directed at:
play a key role in ensuring the industry professional associations and education financial services and raising Victoria’s
– building Victoria’s capability in financial
remains a leading contributor to economic institutions to further develop our identified international profile as a leading
services research
growth, while strengthening Victoria’s areas of competitive advantage. location for financial services in the
– developing Victoria’s skills and
international profile as a prime location for Asia Pacific region.
I am pleased to present this Action Plan education base
financial services in the Asia Pacific region.
for the Financial Services Industry, – promoting skills and education
The Financial Services Industry Strategic outlining the Victorian Government’s in financial services
Audit Report which I released in June strategy, in partnership with industry, for – positioning Victoria internationally as
2003 confirmed Victoria’s significant role the development of this vital sector, and a financial services centre
in Australia’s overall financial services to acknowledge the contribution of the – exporting Victoria’s financial services
capabilities. The Audit revealed the Finance Industry Consultative Committee education and expertise
existing sophistication and competitive in shaping its contents. I am confident the – marketing financial services training
advantages of the Victorian financial existing industry expertise, our capacity and expertise
services sector with strengths in areas for developing talented human capital and – exploring new growth opportunities
like funds management, research and continued motivation for innovation, in financial services
education. Our programs will focus on combined with the benefits of an – strengthening industry advocacy
further developing these strategic assets attractive location, position the sector and consultation
and will help strengthen the industry for expanding regional influence. – growing the whole State: developing
in Victoria. financial services and investment
TIM HOLDING MP
in regional Victoria.
Minister for Financial Services Industry
Key Initiatives – provide a grant of up to $150,000 in – explore new growth and investment
In order to support the strategic priorities
matching funds for Monash University opportunities for the State in emerging
outlined in this plan, the Victorian to assist in marketing its financial sectors, including energy, water and
Government will: services training expertise through carbon trading, socially responsible
overseas aid agencies in the region investment and venture capital.
– support the establishment of the
– convene a major forum promoting
Melbourne Centre for Financial Studies
information exchange and relationship
which will specialise in leading edge
development between universities,
finance and investment research
industry and professional bodies
– encourage and support the establishment
– undertake a comprehensive
of an industry owned Australian
international marketing campaign to
Investment Research Forum (AIRF) to be
promote Melbourne as a major financial
based in Melbourne
centre in the Asia Pacific region
4 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 5
FINANCIAL SERVICES
AND THE VICTORIAN
ECONOMY
The financial services industry is the third The Financial Services Industry – Melbourne – a Significant Melbourne: A Location for
largest sector in the Victorian economy, a Strong and Dynamic Sector Financial Services Centre in the World-Leading Organisations
contributing 8.8 per cent to total factor Since 1999, the financial services industry Asia Pacific Region Melbourne has proved to be an attractive
income in 2003 – or $14.6 billion. has been a key driver in Victoria’s Melbourne’s sophisticated and dynamic location for many foreign institutions
It is a vital part of the daily lives of all impressive growth performance and has financial services industry is similar in size, and international banks. Financial services
Victorians – through banking, insurance, outperformed industries such as property measured by employment, to Hong Kong organisations with head offices
and investment. It is a key facilitator of and business services, construction or Singapore. In addition to its clusters in Melbourne include:
new investment, innovation and growth. and retail trade. The industry has grown of excellence in banking, insurance,
– Vanguard
by over 40 per cent since 1999. stockbroking, investment banking and
Financial services is a key industry in – Mercer
This is more than double the average venture capital, Melbourne has a number
its own right and also an enabler for – GE Consumer Finance
for all industries in Victoria. of unique strengths in the growing
the State’s agriculture, resources, – Standard & Poor’s
boutique funds management sector and
manufacturing and services sectors. – AXA Asia Pacific
is the primary location in Australia for
– Dun & Bradstreet Asia
The industry directly employs around industry superannuation funds.
– HSBC Asset Management
90,000 people or four per cent of the
Melbourne is home to two of the four – Computershare
total Victorian workforce. Critical support
largest banks in Australia – the National – Citigroup Asset Management.
services and related industries generate
Australia Bank and the ANZ Bank. These
thousands of additional jobs. Melbourne is also home to significant
two institutions alone generate one-third
The industry’s superior productivity is operations of:
of Australia’s savings and trading activity.
driven by a highly educated workforce
and leading-edge technologies, – CS First Boston
making it a vital source of highly skilled – Citibank
and knowledge-intensive employment – Deutsche Bank
for Victorians. – Allianz
– Merrill Lynch
– UBS
– Morgan Stanley
– Royal Bank of Scotland.
GE Consumer Finance – In Victoria, GE Consumer Finance GE describes Melbourne’s strengths as: Standard & Poor’s – It acts as a regional hub, exporting talent Standard & Poor’s local growth reflects
Expanding Australian Headquarters employs 1,500 staff. Melbourne also Australasian Headquarters and local expertise – in areas as diverse the continuing development of Australia’s
– being home to some of the world’s
in Melbourne serves as GE’s IT hub, its credit Standard & Poor’s is the world’s foremost as project finance, property finance capital markets and its ranking as one of
outstanding universities, which provide
GE Consumer Finance has reaffirmed its receivables system and the general ledger provider of independent credit ratings, and securitisation – to the rest of the the most sophisticated financial markets in
a solid base for recruiting management
commitment to Victoria with plans to for GE Consumer Finance businesses indices, risk evaluation, investment S&P network. the OECD.’
talent in financial services
expand its Melbourne headquarters and throughout Asia, including India, Thailand, research, data and valuations.
– having the headquarters for some of GE’s According to Chris Dalton, Managing
establish an Asia Pacific Training Centre Japan, Singapore, Indonesia, Hong Kong
largest banking and retail partners Standard & Poor’s currently employs more Director, Standard & Poor’s Australia &
in order to support future growth. and Taiwan.
– being a world-class place to live for staff, than 100 professional staff in Australia, New Zealand: ‘Melbourne is an attractive
Headquartered in Melbourne since especially expatriates, with great sporting most at its Melbourne headquarters, and economical place to do business.
entering the Australian market in 1995, and cultural attractions. which is Standard & Poor’s largest in the Our recruitment and retention experience
GE Consumer Finance now has assets Asia Pacific region. tells us we are able to recruit and retain a
of over $11 billion, with 3,500 employees pool of high calibre personnel. Melbourne
in over 150 locations across Australia and is an attractive location for both interstate
New Zealand. and overseas candidates.
6 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 7
LIFESTYLE
MELBOURNE,
THE BEST CITY
TO LIVE IN
TALENTED
MULTILINGUAL
VICTORIA’S COMPETITIVE
ADVANTAGES IN FINANCIAL
SERVICES
Victoria: a Leading Innovation
Victoria is a robust, diverse and Victoria’s Lifestyle Advantages Melbourne residents enjoy a wonderful
Economy
competitive economy and has enjoyed Lifestyle is a major factor in attracting quality of life and the city is a great place
Victoria has a number of competitive
one of the highest economic growth talented workers and in supporting to conduct business. Advanced transport
advantages and internationally
rates of all Australian states over the knowledge based firms and industries. infrastructure, a diverse commercial
recognised strengths:
last decade: Victoria’s advantages were recently sector, world class universities all located
reaffirmed with the Economist Intelligence in an appealing, low cost urban
– Victoria has a highly skilled finance – In the five years to 2002- 03, the State’s
Unit (EIU) rating Melbourne for the second environment, make Melbourne one
workforce with more graduates in banking economic growth was above the national
consecutive year as the equal best city of the world’s leading cities.
and finance and IT than any other average, averaging 3.9 per cent and was
in the world for expatriates to live in.
Australian State the highest in Australia over the second
– Victoria has a multilingual workforce half of the 1990s The EIU assesses the level of hardship for
and has more tertiary enrolments in all – Victoria’s average income per capita is expatriates in 130 cities, focusing on
disciplines than Singapore and Hong higher than the national average. 12 factors including housing, education,
Kong combined – Victoria’s unemployment rate has been recreational activities, health, crime,
– Victoria is at the forefront of ICT policy below the national average for the last climate and terrorism. Melbourne received
in the region and is a world leader in three years a perfect score in all 12 categories. Other
e-commerce1 – Sound government budget management cities in the Asia Pacific region were
– Victoria operates within the healthiest and economic policies maintain a AAA ranked as follows: Perth (3), Sydney,
finance system in the Asia Pacific region rating from Standard & Poor’s. Victoria’s Brisbane, Adelaide (8), Hong Kong (33),
with one of the best regulated and AAA rating is even more impressive given Singapore (55) and Bangkok (98).
supervised systems in the world that only ten US states and only 16% of
– Melbourne has the lowest cost regional governments outside the USA
and living expenses of all major Asia are rated AAA.
Pacific region locations.
‘ A progressive State economy, a well DST International (DSTi) – investment to provide a modern platform HiNet, the back office accounting solution
regulated compliance, legal and banking Melbourne a Financial Software environment for investment managers. for the lucrative United States’ market has
environment together with a world class Centre of Excellence also been moved to the Melbourne office
Melbourne has been established as an
infrastructure – not to mention an DST International’s Melbourne from its previous location in Boston, USA.
international development and support
extremely competitive cost structure – Development Centre employs around
centre for the region, and the facility is Other highlights for 2004 include the
makes Melbourne a prime business 150 staff who provide research and
expected to support future growth and finalisation of a 1,200 man-day software
location in the region to develop business development services to local and global
product initiatives. localisation project for HiPortfolio
opportunities.’ projects associated with the company’s
for the emerging Chinese funds
widely implemented investment In early 2004, DSTi moved the
management market.
Brendan Donohoe management business solutions. development program for
Regional Director Asia Pacific OpenMessenger, the company’s DSTi sees Melbourne’s available intellectual
The development of its flagship product,
Bank of Ireland Asset Management electronic trade confirmation, settlement resources and its ability to attract and
HiPortfolio/3, involved a large software
and reconciliation solution, from the retain quality investment and IT staff, as
development team, thousands of man
United Kingdom to Melbourne. well as its low cost business environment,
days of research and a $40 million
In conjunction, a testing program for as the major ingredients of its success.
10 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 11
FUNDS MANAGEMENT
AND SUPERANNUATION
IN VICTORIA
Victoria’s contribution is vital to Australia’s Victoria is the source of 42 per cent of Melbourne – An Internationally Competitive Location for Funds Management
performance as the largest market for institutional superannuation in Australia
managed funds in the Asia Pacific region making it the major source of large
and the fourth largest in the world.2 investment mandates for the Australian
The State is considered the centre for funds management industry. This provides
industry superannuation funds, with Victoria with a distinct competitive
around 65 per cent of total Australian advantage and is a major attraction to
industry funds under management in international fund managers wanting
Victoria. Victoria has around 340 large to establish a presence in the State.
corporate, public sector and industry
Victoria’s strength in funds management
funds, valued at about $85 billion3, more
and its potential as a prime market for
than any other state, while seven of the
wealth management in the region are
top ten industry superannuation funds in
confirmed by independent benchmarking
Australia are located in Victoria.
research4 which has found Victoria is the
most attractive high quality, low cost
location for funds management in the
Asia Pacific region.5
Australia – The Leading Market for Managed funds Large Superannuation Funds by State, 2003
in Asia–Pacific
Source: All funds Global concentrations of industry
ICI, 2003
Industry funds Competitor locations
Mutual Fund Fact Book
All funds include corporate,
government and industry funds
Vanguard Investments Australia In 1996 the Vanguard Group chose ‘ Because all Australians are mandated Industry Funds Services – IFS recently announced plans to merge ‘ As a result of our superannuation system,
Index Funds specialists Melbourne for the opening of its first to contribute to retirement savings, it’s Pooling Expertise for Melbourne’s with Members Equity – The Super Funds Australia has become a leading market in
Vanguard Investments Australia is overseas office, and now manages over a rapidly growing market for managed Industry Superannuation Sector Bank. The merged entity has the potential funds management. Melbourne is the
a wholly owned subsidiary of the US- $A 23 billion in index funds, primarily for funds – the largest in Asia and the fourth Industry Fund Services (IFS) was created to reach between six and seven million clear headquarters for the growing
based Vanguard Group which manages large institutional investors. largest in the world. There’s a great future in 1994 to provide cost effective, employees and is planned to offer a range industry fund segment of the
approximately $A1 trillion for more than for us here in Melbourne.’ innovative and market-leading products of mortgage, superannuation, credit card, superannuation market. Fortunately it’s
Recognising the strategic advantages
17 million individual and institutional and services for industry superannuation savings and investment products. Based also a great place to live.’
Victoria has for funds management,
investor accounts. Jeremy Duffield funds and their members. in Melbourne, the merger will create a
Vanguard recently decided to coordinate
Managing Director
diversified financial institution which will Garry Weaven
the activities of all Asian offices, including IFS currently has nine shareholder funds
Japan, through its Melbourne office. Vanguard Investments Australia
directly compete with the larger banks Executive Chair
with assets totalling almost $30 billion,
and mortgage brokers. Industry Funds Services
three million members Australia-wide and
about 150,000 sponsoring employers.
In aggregate, IFS and its related entities
employ around 2,000, largely
in Melbourne.
12 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 13
VICTORIA’S FINANCIAL SERVICES INDUSTRY:
STRATEGIC PRIORITIES
GROWING VICTORIA INTO A WORLD CLASS LOCATION FOR BUILDING VICTORIA’S CAPABILITY
FINANCIAL SERVICES IN THE ASIA PACIFIC REGION IN FINANCIAL SERVICES RESEARCH
Global competition, industry consolidation, Attracting global financial services players Our research institutions provide Victoria The Centre and supporting initiatives will Australian Investment Research Forum
and the application of sophisticated to Victoria has clear benefits. They include with a great opportunity to build on its create long term opportunities for the The Victorian Government will encourage
information and communication the creation of wealth and employment research strengths in financial services. industry in Victoria and will provide the establishment of an Australian
technologies are transforming the opportunities, attracting investment, world Industry sees an opportunity for a focus for the State to further develop its Investment Research Forum (AIRF), to be
global financial services industry. class financial expertise and talent, and Melbourne to develop a world class role as a financial centre. It will initiate based in Melbourne. The Forum will be
This environment presents the industry adding to the critical mass of financial finance research capability similar to important research projects in areas such a not-for-profit organisation, owned and
with many challenges as well as services organisations in Victoria. Boston in the United States and as superannuation, taxation, the housing operated by the investment industry and
opportunities. Industry and government Cambridge in the United Kingdom. market, resources and biotechnology. will play a critical role in commercialising
Victoria has a crucial role to play in
must work together to build on the research output. It will address important
positioning Australia internationally as The Centre will provide the opportunity
sector’s strengths and enhance Victoria’s The Melbourne Centre of research problems of interest to the
a significant location for financial services to build a reputation for financial services
competitiveness as a financial Financial Studies investment community. The Forum will be
in the Asia Pacific region. research in the region. It will attract
services centre. As the centrepiece of this $1.8 million of national significance and will involve
international experts to collaborate on
Investing in Victoria’s Future focuses on: initiative, the Victorian Government will major Australian investment managers.
Investing in Victoria’s Future – An Action global research and teaching, thought
support the establishment of
Plan for the Victorian Financial Services – building Victoria’s capability in financial leadership seminars and international The AIRF will involve collaboration
a Melbourne-based Centre for Financial
Industry is the Victorian Government’s services research conferences. It will also assist universities between the domestic and international
Studies. Established in conjunction with
response to these challenges and – developing Victoria’s skills and and industry to collaborate in order to finance services industry, governments,
the tertiary education sector and the
opportunities. A number of areas have education base generate new ideas and research, as well and parts of the university sector. It will
financial services industry, the Centre
been identified by industry stakeholders – promoting skills and education in as developing international linkages with facilitate linking research output back to
will specialise in leading edge finance
where the Victorian Government, in financial services other research institutes. the finance industry by interpreting and
and investment research. It will have
partnership with industry, can achieve a – positioning Victoria internationally as analysing research output and giving it
a unique mission in bridging the gap The Victorian Government is committed
significant impact on industry growth a financial services centre practical industry application.
between universities, academic research to ensuring the most successful outcome
and international competitiveness. – exporting Victoria’s financial services
and industry. and to encourage potential collaboration The Forum will promote important
education and expertise
The development of the strategic priorities between leading institutions and the international research linkages, particularly
– marketing financial services training
for the industry and the implementation finance research community. with the influential US Research
and expertise
of the industry action plan will be The Government will be inviting Foundation of the Association for
– exploring new growth opportunities
a shared responsibility between industry expressions of interest for The Centre Investment Management and Research
in financial services
and Government. during 2004, with a view to its (AIMR).
– strengthening industry advocacy
establishment in 2005.
and consultation
Strategic initiatives
– growing the whole State: developing
In partnership with industry and the
financial services and investment in
academic sector, the Victorian
regional Victoria.
Government will:
– support the creation of a world class
Centre for Financial Studies to be
located in Melbourne
– support the creation of an Australian
Investment Research Forum.
The Financial Standard – The Financial Standard Intelligence Unit
Putting Finance on the Front Page (FSIU) undertakes insightful research and
The Financial Standard, a division of analysis on a wide array of investment
Rainmaker Information, is headquartered issues. By maintaining a close relationship
in Melbourne. Melbourne was chosen as with Australia’s leading universities,
head office for the Financial Standard industry bodies and practitioners, the
because of access to leading universities FSIU is able to deliver meaningful research
and investment professionals together to investment professionals.
with cost effective infrastructure.
The Financial Standard Best Practice
By focusing on providing trade news, Seminar Series aims to lead the thinking
investment analysis and education for the in the evolution of best practice in the
Australian financial services industry, it is financial services industry by presenting
a uniquely open forum for the delivery and original research from Australia’s leading
exchange of information and ideas. academics and practitioners.
14 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 15
EDUCATION
VOCATIONAL MANUFACTURING
TRAINING
SUPPORT
NEW
INITIATIVES
EXPERTISE
ADVANCED
TECHNOLOGY
HIGHER SUSTAINABLE
EDUCATION
STRATEGIC PRIORITIES
DEVELOPING VICTORIA’S SKILLS PROMOTING SKILLS AND EDUCATION
AND EDUCATION BASE IN FINANCIAL SERVICES
Education and training is one of Building on this Performance Vocational Education and Training While the financial services industry is Strategic Initiatives ‘We have come to the conclusion that to
Victoria’s major strengths. Victoria is the Vocational education is a critical source an important source of exciting career The Victorian Government will continue effect major IT development we really
Financial Services and Higher Education have to do it in the one location.
centre for banking and finance and of training investment made by financial opportunities, rapid industry and to work closely with relevant
Close communication and cooperation Computershare is a Victorian-born
IT related education. Victoria is the services firms. In response to the regulatory change has meant there is professional bodies and industry
between higher education institutions and company and experience told us that in
leading Australian State in numbers introduction of the Financial Services a need to increase the awareness associations and will consider actions
the industry is vital in meeting emerging choosing Victoria for our global
of banking and finance, and IT and Reform Act 2002, many organisations and reduce possible confusion about to encourage:
skill and education needs. While a number operational HQ we would be able to take
computing graduates.6 are now planning to use it to underpin the industry.
of higher educational institutions – promotion of careers within the financial advantage of the State’s strong skills base
their skills framework.
The strength of our financial services undertake ongoing consultations with The Victorian Government will work services industry including developing and stable environment.’
workforce is internationally recognised. industry and professional bodies to ensure Business Skills Victoria (BSV) is the with industry to raise awareness of the a ‘Careers in Finance’ website
The 2003 World Competitiveness courses meet industry demands, there is Industry Training Board of the business, range of career opportunities within the – opportunities for students to gain Chris Morris
Yearbook ranks Australia first in the a need to strengthen the current dialogue finance and property industries and plays financial services industry and related exposure to workplaces within the President and CEO
availability of finance skills, finance and collaborative mechanisms. an important role in providing advice to education pathways. financial services industry via the Computershare Limited
education, economic literacy and the OTTE that helps to prioritise funding for promotion of industry-based learning
There is strong support to formalise links
overall quality of our education system. the VET system. BSV underpins the major programs and scholarships.
between the higher education sector,
Australia is ranked fourth in the world for linkages between industry, government
the financial services industry and the
the availability of IT skills.7 While industry and the training system and is responsible
Victorian Government. Such dialogue
performs well on a number of key criteria for providing advice and assistance in the
would assist the industry and higher
and undertakes a number of measures development and implementation of the
education institutions to respond to
to strengthen skills and training in the Commonwealth’s new Financial Services
changes and trends, to reach agreement
sector, a sustained effort is needed to Training Package.
on where current and future skill gaps
ensure the industry continues to attract,
might exist, and to determine how these While Business Skills Victoria (BSV) and
retain and develop a high quality
gaps might best be addressed. A forum educational institutions regularly review
workforce with the skills and knowledge
will also provide participants with an training needs, there is an opportunity
required for competitiveness and growth.
opportunity to articulate their views on to strengthen current industry and
emerging priorities for finance related government advisory arrangements at the
Current Government Initiatives
higher education courses. VET level. This includes the Government
The Victorian Government is committed
maintaining an ongoing working relationship
to developing an education and training
Strategic Initiative with both BSV and the Commonwealth to
system that is responsive to the needs
To enhance higher education explore future industry skill needs.
of industry and the innovation economy.
provision for the financial services
Since 1999 the Victorian Government
industry, the Victorian Government will Strategic Initiatives
has invested an extra $2.75 billion in
establish a forum to exchange The Victorian Government will work
education and training. The Minister for
information and further build with professional bodies to raise
Education and Training also released two
relationships between universities, understanding of VET within the
major education statements outlining
industry and professional bodies. financial services industry and
the future directions for Higher Education
encourage:
and Vocational Education and Training
– industry input into the existing advisory
(VET) in Victoria.
mechanisms and research framework
The Office of Training and Tertiary that have been established by the
Education (OTTE) has undertaken Government to identify and prioritise
a number of studies identifying future training needs and VET priorities
demand drivers and likely supply levels – industry links with Business Skills
in various service sectors including Victoria to enable effective
financial services. The research implementation of the new Financial Australian and New Zealand Institute The Institute also has an internationally The Institute has been particularly
investigates the changes in skill needs Services Training Package of Insurance and Finance – Feeding recognised membership program that successful in accessing the Chinese
and skill formation processes and will – industry associations and professional Asia’s Appetite for Finance Education promotes members’ professionalism market culminating in the launch of
guide the process for making decisions bodies to contributing to a shared view Based in Melbourne, the Institute is the throughout the region. a Chinese-English Diploma of Financial
about VET priorities in the future. of priorities for workforce development leading provider of insurance education, Services (General Insurance) in 2003.
within the industry including continued For the second consecutive year, the
training and professional services to the Strong relationships with major domestic
learning and up-skilling by financial Institute was named the Educational
financial services industry in Australia, insurers and China’s insurance teaching
services professionals. Service Provider of the Year by the Asian
New Zealand and the Asia Pacific region. universities have been built, leading to
insurance industry in recognition of its
The Institute delivers award courses to delivery of several customised training
outstanding contribution to insurance
diploma level in general insurance, programs confirming the Institute’s role
education in the region.
insurance broking, life insurance, and as a key provider of industry education
loss adjusting. Thirty per cent of its annual in the region.
enrolments come from the Asian region.
18 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 19
STRATEGIC PRIORITIES
POSITIONING VICTORIA INTERNATIONALLY EXPORTING VICTORIA’S FINANCIAL
AS A FINANCIAL SERVICES CENTRE SERVICES EDUCATION AND EXPERTISE
The Victorian Government has a key role Through Invest Victoria, the Victorian Utilising our Expatriate Networks Victoria’s leading reputation in areas Current Government Initiatives The Victorian Government will continue
to play in raising the international profile Government will further expand its The Victorian Government recognises such as credit risk, investment The Victorian Government recognises to work closely with the APEC Centre to
of the State’s financial services industry. international marketing strategy in financial that expatriates are a valuable source of management, insurance, and finance the importance of attracting international promote the State’s financial services
services and will seek to attract new knowledge and that maintaining links with regulation and compliance, represents students to the Victorian economy. expertise in the region. It will also work
Industry stakeholders have expressed
international financial services enterprises. our expatriate community is crucial. a substantial opportunity to increase Global Pathways, International Education with industry, professional bodies and
a need for industry and government to
Victoria will be promoted as a leading Australian expatriates now number one exports of financial services expertise for Victoria, released in 2004, outlines the education sector to exploit export
jointly develop a strategy to promote
wealth management centre of the Asia million globally, including approximately and education capabilities to the Government’s strategy in international opportunities in specialist finance
Victoria as a dynamic financial centre.
Pacific region, and our large and growing 350,000 Victorians. emerging markets. education and sets out how the courses aimed at the corporate and
Victoria’s distinct advantages provide
funds management and superannuation Government will support our education government sector.
a major opportunity to promote a strong Many of these expatriates work in major Similarly, the State’s expertise in the
sectors will be aggressively promoted institutions enabling all Victorians to
international message in financial services. global financial centres and have reached management and regulation of one Opportunities exist to promote
in the United States and Europe. benefit from international education.
the most senior levels of leading of the largest and most sophisticated export opportunities in financial services
This strategy will include annual
Current Government Initiatives international financial organisations. pension fund systems in the world and ICT. Victoria has a number of ICT firms
presentations in international financial Building on this Performance
The Victorian Government recognises that The Government will seek to utilise our its knowledge of large and complex involved in the development of finance
centres, trade fairs and investment The Victorian Government is committed
the market for foreign direct investment international networks of expatriates and infrastructure projects provides significant technology solutions in banking and
missions. to working with Victorian universities to
is becoming increasingly competitive. alumni of our educational institutions to export opportunities. investment applications, clearing
market Victoria and Melbourne as a study
It has identified financial services as promote Victoria internationally. and settlements, online banking,
Industry Conferences and Events destination and as a major centre of
one of seven priority sectors providing Victoria – A Leading State in e-security, smartcard technology,
The Government will attract high profile higher education and research.
focus for the Government’s international Strategic Initiatives International Education application outsourcing and business
national and international financial services
investment attraction strategy. The Victorian Government will promote Exports of education services, which process consulting.
industry conferences and events to Strategic Initiative
the Victorian financial services industry include finance-related education courses
Victoria. Focusing on funds management, The Victorian Government will
The Victorian Government also works in overseas markets by: and training, have grown to be the third Strategic Initiatives
financial research, superannuation and collaborate with Victorian universities
closely with the Melbourne Convention – annual presentations and investment largest service-based export industry The Victorian Government will:
venture capital, event participation will to investigate opportunities for the
and Visitors Bureau, the Melbourne missions throughout our region and to in Victoria. Export revenue in education – provide a grant to assist Monash
aim to raise the profile of Victoria in export of financial services education
Exhibition Centre, the Committee for North America and Europe promoting reached $1.4 billion in 2002-03 and University in marketing its financial
international markets. and training and to develop strategies
Melbourne and Axiss Australia to promote Victoria’s capabilities in financial services has more than doubled in the last services training expertise through
for attracting overseas students to
Victoria as a financial services centre. Industry’s important role in promoting – an international marketing seven years. overseas aid agencies in the region,
Victorian education institutions.
Melbourne as a financial services centre communications program including developing course structure
With around 55,000 international
Building on this Performance was demonstrated by the success – working cooperatively with the and content and the delivery of
students studying at Victorian education Marketing Financial Services Training
of the second Melbourne Financial Commonwealth and NSW Governments training programs
Invest Victoria institutions, Victoria is the leading and Expertise
Services Symposium in March 2004. on international promotion of Australia – seek opportunities to develop and
Invest Victoria has been established as destination for education in Australia. The Australian APEC Study Centre
The Symposium was delivered in as a financial services centre in the promote executive financial services
the focal point for the Victorian Melbourne has the second highest based at Monash University is an
partnership with industry, the Victorian Asia Pacific region training courses in Asia, including
Government’s investment attraction number of international students in the important contributor to the economic
Government and the City of Melbourne – attracting major international financial encouraging export trade missions
program, and it will act as an initial point world, behind London but in front of and financial development of the region.
and is expected to become an annual services events and conferences to showcase Victorian expertise in
of entry for prospective investors. New York.8 It is estimated that about The Centre provides comprehensive
event on Melbourne’s financial to Melbourne finance education and training and
40 per cent of Australia’s foreign students training to regional regulators across
services calendar. – targeting multinational financial services finance technology solutions
study finance-related courses.9 APEC economies and showcases the
companies seeking to establish or – work with Axiss Australia to raise
In conjunction with industry, the regulatory expertise available in the
expand regional headquarters in the Victoria’s international profile in
Government will hold a regular forum for Australian financial services industry.
Asia Pacific region education and training
the Victorian funds management industry
– holding an annual financial services – explore export opportunities in financial
to increase the industry’s profile, promote
symposium in partnership with industry services arising from tax reform and
business networking and collaboration
and the City of Melbourne new trade agreements.
and provide a venue for exploring issues
– facilitating a regular funds management
affecting the local industry.
networking forum
– developing expatriate and alumni Ultradata Australia – Exporting Beyond Australia, Ultradata's in-house The company’s core product solutions
networks to promote Victoria as Innovative Technology Solutions to the developed products have been adopted include TACT, used for retail investment
a financial services location. Asia Pacific Financial Services Industry by financial organisations in New Zealand, management; Utrust, for unit trust
Ultradata is a Melbourne-based Australian
Malaysia, Singapore, Thailand, Papua administration; and Ultracs, a complete
technology provider delivering innovative
New Guinea, Tonga, Cook Islands, retail banking solution used by
technology solutions to the local and
and the Middle East – all strategically a significant proportion of deposit-
international financial services industry.
supported through Ultradata's taking and lending institutions across
Melbourne office. the Asia Pacific.
Ultradata boasts major clients across
the breadth of the financial services sector
including banking, funds management,
building societies,credit unions,
insurance companies, trustees and
lending organisations.
20 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 21
STRATEGIC PRIORITIES
EXPLORING NEW GROWTH OPPORTUNITIES
IN FINANCIAL SERVICES
The Government has an important The Technology Current Government Initiatives Finance for Growth – Supporting Building on this Performance
role to play in positioning Victoria as Commercialisation Program New Manufacturing
Venture Capital Limited Partnerships
a leading edge location for financial The Victorian Government’s Technology As part of its Agenda for New VicStart
The Victorian Government has made
services innovation and in identifying new Commercialisation Program (TCP) Manufacturing program, the Victorian VicStart is the Victorian Government’s
significant reforms to Victoria’s limited
areas of opportunity in emerging sectors. increased the rate of commercialisation Government has committed to improving successor to the Technology
partnership laws which are expected
It also makes an important contribution of science and technology ideas links between the manufacturing and Commercialisation Program. It aims to
to substantially improve the operating
in providing a sound business environment and supported the growth of new high finance sectors. improve the linkages, processes and skills
environment for the venture capital sector
for emerging sectors to prosper and flourish. technology businesses. The TCP needed to successfully commercialise
in Victoria. The reforms – the first to be The Finance for Growth report,
stimulated an increased activity in Victoria’s science, technology and
The Government will support further enacted by any Australian state – involve commissioned by the Victorian and South
commercialisation support and facilitated innovation.VicStart helps to accelerate the
exploration of emerging sectors identified the creation of a separate legal entity for Australian Governments and released in
access to over $84 million of investment maturity of the Victorian venture capital
by industry stakeholders as offering Venture Capital Limited Partnerships November 2003, examined the problems
from external sources into new Victorian industry and provides funding for further
potential for significant growth. (VCLP), providing greater certainty to the preventing some small and medium-sized
technology businesses. commercialisation initiatives of
limited liability of partners involved in an manufacturers accessing suitable finance
$25 million over four years.
Venture Capital advisory role. to pursue export opportunities. The report
Venture capital financing provides an recommended ways to improve the The development of the VicStart
The reforms were made in consultation
important means for new innovative relationship and understanding between program has been organised around
with industry and will work in tandem
firms to access the financial resources the manufacturing and finance sectors, three priority areas:
with recent changes to Commonwealth
necessary to build their businesses. including potential product and service
legislation. – Capability Building
Venture capital is vital to the growth options, a more proactive role by the
To build commercial skills, expertise and
and development of emerging and high VCLP will strengthen Victoria’s ability manufacturing sector in presenting its
connectivity in order to enhance the
technology industries such as information to attract international venture capitalists case to finance providers, and a key role
capabilities of technology entrepreneurs
and communication technologies, to invest in Victoria by creating an for government in facilitating improved
to grow global technology businesses
biotechnology, nanotechnology, aerospace investment and legal environment that communication between the two sectors.
– Access to Finance
and other advanced manufacturing. is world’s best practice.
The Victorian Government has responded To boost the expertise, experience and
Victoria continues to be Australia’s venture to the recommendations by developing development of the technology finance
capital leader, boasting the highest level the Balance Sheet Ready program, which sector in order to improve the availability
of venture capital investment in the country. aims to provide practical assistance to of specialist financial services and
For the third year in a row Victorian exporters in the manufacturing sector to investment opportunities
companies received the greatest amount present financial documents in a form – Technology Transfer
of investment from venture capital firms.10 readily acceptable to finance providers. To improve linkages between and within
Superannuation funds play a critical role industry sectors and research establishments
in this area and are the largest source of to increase the transfer of technology with
private equity, contributing nearly 40 per clear commercial outcomes.
cent to Australia’s total venture capital.
Starfish Ventures Starfish Ventures was the first organisation ‘ Victoria provides the right combination
From Start to Finish to take advantage of Victoria’s new of science and capital to produce great
Starfish seeks superior returns through Venture Capital Limited Partnership outcomes,’
active investment in innovative technology reforms with the first closure of its Starfish
companies. It understands the challenges Technology Fund in February 2004. The John Dyson
of seeding, building and managing high fund is expected to raise $100 million and Investment Principal
growth technology businesses from a has attracted substantial offshore interest. Starfish Ventures
Victorian base.
Starfish Ventures recognises that
Victoria is a world class centre for life
science, information technology,
communications and other technology
research and seeks to leverage
commercialisation opportunities offered to
provide compelling returns for investors.
22 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 23
GROWTH AND DIVERSIFIED
COMPETITIVENESS
MARKETING
CONNECTED
EXPORTS
RESEARCH EXPERTISE
EDUCATION SUSTAINABLE
STRATEGIC PRIORITIES
STRENGTHENING INDUSTRY
ADVOCACY AND CONSULTATION
Opportunities in Emerging Markets Sustainable Finance and Investment Strategic Initiatives The Victorian Government plays an Building on this performance
Energy and water market reform are at Victoria is a leading centre for sustainable The Victorian Government will: important role in facilitating industry The Victorian Government and the
key stages of development in the national finance and investment in the region and dialogue and consultation. This includes financial services industry must continue
– provide $25 million under VicStart to
arena with reform likely to drive market has the potential to further build on this advocating industry concerns to the to strongly advocate industry issues
improve the access of early stage
growth in coming years. The development performance through its established Commonwealth Government and its and concerns to the Commonwealth
technology companies to specialist
of an effective energy market provides research capabilities and the Victorian agencies concerning policy issues that Government that affect Victoria’s global
finance providers
Victoria with a major opportunity to play EPA’s role in delivering a United Nations affect the industry. competitiveness in financial services.
– continue to work closely with relevant
a key role in Australia’s National Electricity sustainability development program for The Victorian Government seeks a shared
stakeholders to explore and research
Market infrastructure, including a national the financial sector. Current Government Initiatives commitment with the Commonwealth in
opportunities in emerging areas such
electricity trading system and a national The Victorian Government has establishing Victoria and Australia as an
Socially Responsible Investing (SRI) as sustainable finance and investment
gas market. demonstrated its commitment to the attractive location for financial services
research organisations located in Victoria and new financial markets in electricity,
financial services industry by the activity in the Asia Pacific region.
The development of emerging markets include the Sustainable Investment carbon credit and water trading
appointment of a Minister for Financial
in the trading of energy, water and carbon Research Institute (SIRIS) and Monash – support the fourth annual Ethical
Services Industry. The Finance Industry Strategic Initiatives
trading have been identified by industry Sustainability Enterprises, which provide Investment Association (EIA) conference
Consultative Committee (FICC) was The Victorian Government will
stakeholders as offering potential for the research for products such as BT to be held in Melbourne in 2004 and
established to provide the Government strengthen its capability to advocate
significant growth. Victoria has the Financial Group’s Eco Share Fund. work in partnership with the Association
with advice on the development of the financial services industry concerns
opportunity to attract a significant range Our expanding research expertise has and other organisations to promote
industry in Victoria and to assist it to with the Commonwealth Government
of major market participants, financial the potential to attract new investment awareness of SRI and opportunities
market Melbourne as a dynamic financial through establishing a FICC Working
intermediaries and operators to the State, into Victoria. for Victoria
centre in the Asia Pacific region. Group to further explore both State
including the generation of employment – hold a major international conference
The Ethical Investment Association (EIA) and Commonwealth Government
in product development, support services to promote and develop issues
recognises Victoria’s role in sustainable actions that affect the global
and other industries. The Government in sustainable development for the
development and with the support of the competitiveness of the industry.
will investigate growth opportunities and finance sector
Victorian Government will hold its fourth
will support further exploration of – encourage the adoption of best
annual conference in Melbourne in
emerging sectors. environmental and sustainability practice
October 2004. The Government will work
by financial institutions through the
with the EIA and other organisations to
UNEP Finance Initiatives program and
promote awareness of SRI and to further
other initiatives.
explore opportunities for the State.
UNEP Finance Initiatives – In 2000, the Victorian Government,
Victoria Becomes a Leader in through EPA Victoria, signed
Sustainable Finance a Memorandum of Understanding with
Established in 1992, the United Nations UNEP to coordinate and promote its
Environment Programme Finance Finance Initiatives in Australasia. EPA
Initiatives (UNEP FI) is a unique voluntary Victoria’s involvement in the program
undertaking between UNEP and some includes hosting seminars and
270 banks, insurers and asset conferences in Australasia, publishing
management companies worldwide. a regular newsletter and chairing industry-
The goal of the initiative is to identify, led advisory committees.
promote, and realise the adoption of
best environmental and sustainability
practice at all levels of financial
institution operations.
26 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 27
STRATEGIC PRIORITIES
GROWING THE WHOLE STATE: SUMMARY OF INITIATIVES
DEVELOPING FINANCIAL SERVICES AND
INVESTMENT IN REGIONAL VICTORIA
The Financial Services Industry Audit Current Government Initiatives Building on this Performance Strategic Priority Key Initiatives
highlighted the importance of providing The Victorian Government is committed
Regional Business Investment Building Victoria’s Capability – Support establishment of the Melbourne Centre for Financial Studies to specialise in
access to quality financial services, to growing the whole of Victoria and
Ready Program in Financial Services Research leading edge finance research and to build links between industry and
particularly for regional and rural ensuring that all Victorians have an equal
The Victorian Government has committed academic research
customers. Regionally based financial opportunity to share and contribute to
$6 million over three years to assist – Support establishment of the Australian Investment Research Forum in Melbourne to
services enterprises were seen by many the economic development of the State.
regional businesses and infrastructure address important research problems of interest to the Australian investment community
regional stakeholders as vital to the
Growing regional Victoria is central to providers to become ‘investment ready’.
economic and community development Developing Victoria’s Skill – Convene a higher education forum to exchange information and further build
the Government’s economic development The Regional Business Investment Ready
of regional Victoria. and Education Base relationships between the higher education sector, industry and professional bodies
strategy. Since 1999, a number of Program will start in July 2004 and seeks
– Encourage greater industry input into existing VET advisory mechanisms to prioritise
The Audit also identified difficulties programs and initiatives have sought to to address the lack of superannuation
training needs and enable effective implementation of the Financial Services Training Package
accessing capital for infrastructure address issues of access to capital and funds and other investments in regional
– Promote continued learning and up–skilling by financial services professionals
projects in regional Victoria. Stakeholders to encourage the financial services sector projects by attracting a greater flow of
were concerned that the majority of to consider competitive regional capital into regional areas. The program Promoting Skills and Education – Consider actions to promote careers within the industry including developing a Careers
locally generated savings, particularly investments, including: will include regional seminars and in Financial Services in Finance website
superannuation funds, are not invested workshops on how to become investment – Create opportunities for students to gain greater workplace exposure via industry based
– renewal of the Regional Infrastructure
in businesses or projects that benefit ready as well as one-on-one counselling learning opportunities and scholarships
Development Fund (RIDF) with new funds
local communities. for investment prospectus development.
of $180 million over the next five years Positioning Victoria Internationally – Establishment of Invest Victoria
for infrastructure projects in regional The Victorian Government is working as a Financial Services Centre – Support missions to Asia Pacific, North America and Europe
communities to boost regional with the Commonwealth, other state and – International marketing communications program
competitiveness and economic growth territory governments and the Australian – Seek joint international promotional activities with Commonwealth and
– a $1 million statewide marketing
.3 Local Government Association to examine NSW Governments
campaign, Make It Happen in Provincial the issue of the lack of access to capital – Attract major international financial services events and conferences to Melbourne
Victoria, to attract business, investment for small regional infrastructure projects, – Develop expatriate and alumni networks to promote Victoria as a financial
and new residents to rural and including potential policy responses. services location
regional Victoria – Target companies seeking to establish a regional Asia Pacific head office
– the Your Town Your Bank initiative, which Strategic Initiatives – Melbourne Financial Services Symposium
provides assistance to rural communities – The Victorian Government has – Funds Management Networking Forum
wishing to establish banking and other committed $6 million over three years
Exporting our Financial Services – Support Monash University to assist in marketing financial services training to the region
financial service facilities. to assist regional businesses and
Education and Expertise – Explore opportunities to develop and export executive financial services training courses
infrastructure providers to become
– Encourage export trade missions to promote our education capabilities and expertise in
investment ready
financial technology solutions
– The Government’s Make It Happen in
– In conjunction with Axiss Australia, promote our education and training
Provincial Victoria marketing campaign
sector internationally
will be continued with further funding
– Explore export opportunities in financial services arising from new trade agreements
of $5.7 million over three years.
Exploring New Growth Opportunities – Introduction of VicStart, which will provide $25 million over four years to improve the
in Financial Services access of early stage technology companies to specialist finance providers
– Research opportunities for Victoria in the trading of electricity, carbon credit and water
rights and sustainable finance and investment
– Support the 2004 Ethical Investment Association conference
– Hold a major international conference to promote and develop issues in sustainable
development for the finance sector
– Promote the UNEP Finance Initiatives
Bendigo Stock Exchange: BSX continues Bendigo’s long tradition in ‘ BSX Market is one of a number of financial Strengthening Industry Advocacy – Establish an FICC Working Group to advise the Victorian Government on
Delivering Regional Investment financial markets forged by the capital initiatives being developed for rural and and Consultation issues that affect the global competitiveness of the industry
Platforms requirements of the gold mining industry. regional Australia by BSX and its strategic
Regional Victoria plays an important role BSX is gaining momentum as a licensed alliance partners. The Market puts in place Growing the Whole State: – Regional Business Investment Ready Program
in financial services, with Bendigo acting exchange for the securities of emerging regulated frameworks to help reverse the Developing Financial Services and – Extend the Make it Happen in Provincial Victoria marketing campaign
as a centre for the State’s regional businesses. Its innovative and flexible flow of potential capital from regional Investment in Regional Victoria
financial services. Victoria is home to approach to the process of listing, Australia to enable regional communities
Australia’s newest exchange, the Bendigo together with a professional and to invest locally.’
Stock Exchange (BSX). responsible attitude to investor protection,
is creating an educated and active pool of Geoffrey Barrow
investors with an interest in Australia’s Chairman
corporate growth sector. BSX Group Holdings Ltd
28 Investing in Victoria’s Future: The Victorian Government’s Action Plan for the Financial Services Industry 29
NOTES
1 Australia was ranked leader in the Asia Pacific region and in the
top 10 globally for e-readiness. Economist Intelligence Unit,
The 2003 e-readiness ranking
2 Australia is fourth behind the USA, France and Luxembourg,
and ahead of Italy, the UK, Japan and Ireland. Axiss Australia,
Benchmark Report
3 Rainmaker Information
4 IBM Business Consulting, Benchmarking Victoria, March 2003
5 Benchmarking data covers both qualitative and cost related
issues in order to evaluate Victoria’s competitive position in
comparison with benchmark locations
6 Victoria had 7,310 Banking and Finance Graduates and 3,097
IT Graduates in 2002. Axiss Australia and Commonwealth
Department of Education, Science and Training
7 Institute for Management Development, World Competitiveness
Yearbook 2003
8 Victorian Department of Education and Training,
International Division
9 Axiss Australia, Media release, 31 October 2002
10 Private Equity Media/ PricewaterhouseCoopers survey, 2004
ACKNOWLEDGMENTS
The assistance of the Finance Industry
Consultative Committee, industry
roundtable participants and other
individuals and organisations is
acknowledged and appreciated in the
development of Investing in Victoria’s Future.
CONTACT
For information on investing in the
Financial Services Sector in Victoria:
info@invest.vic.gov.au
For enquiries within Australia, call the
Victorian Business Line 13 22 15
30
Authorised by the Victorian Government, Level 14, 55 Collins Street, Melbourne
Design: Fabio Ongarato Design
May 2004
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