Of course, that depends upon what that means. But if it means reevaluating our system of financial regulation to ensure it is working for us and for consumers, then count me in. As it is outlined in this speech, Hockeynomics seems to articulate a line very consistent with mainstream economic thinking on the subject. I must admit that I don’t follow enough Australian political coverage now to understand the whole controversy here but his nine policy suggestions seem, on the face of it, worth evaluating more closely.
But some are objecting. The banks (especially ANZ) have come out violently against all of this. Why? If we hold an inquiry and no competition issues are found (remember we did this for supermarkets) then the banks are fine. Their outcry suggests that they know there are competition issues. This all suggests that we need to push forward with an inquiry and also that the banks should be arguing for as much independence from the political process as possible for it.
The Government is objecting. This is hardly surprising given that they had a year to move forward on this and failed to do so. It is all the more interesting because the Hockey line is very traditional Labor fare. But we should note that the Government has not acted in the face of the financial crisis despite constantly telling the country that our understanding of finance had changed. To be sure, they enacted some good crisis measures (the banking guarantee and the RMBS interventions), but now that we are out of the woods is not the time to drop the ball. What is our system of banking guarantees now and should the banks get those guarantees for free? When it comes to mining, the Government expects the public to receive a share of the rents. What happens when it comes to banking?
Hockeynomics may sounds populist but that does not mean investigating, gathering evidence and thoughtfully considering the long-term future of the Australian financial system is a bad idea. As Kevin Rudd said, the time to mend the roof is when the sun is shining. The sun is shining now.