Abstract
The Australia in the Asian Century white paper launched in 2012 recognized that Australia’s future is inextricably linked with Asia. It urged Australian firms to be highly innovative and to develop collaborative relationships with others in the Asian region. One such area of opportunity is Islamic Banking and Finance (IBF), which has become a global phenomenon, with regional IBF hubs developing across the ASEAN region. IBF is a growing niche Asian market that, if understood better, could assist Australia’s large infrastructure needs and allow Australian corporate access to new pools of offshore funding and tap into an alternative investor base. Subsequent to the Global Financial Crisis (GFC), federal and state governments in Australia showed some increased interest in developing the IBF sector. This was in part due to the tightening of credit during the GFC, the need to access cheaper wholesale funds and a desire to make Australia a regional financial services hub. In 2008, the federal government commissioned a report on how to develop Australia into a financial center. One recommendation of the report, titled Australia as a Financial Centre—Building on our Strengths (also known as the Johnson Report),1 was to encourage the development of IBF by arguing that the competitiveness of Australia’s financial services sector offers great opportunities for Islamic Financial Institutions (IFIs) to do business in Australia or to export their products to Asia. Then in 2011, there was an inquiry by the Board of Taxation into whether Australian tax laws need to be amended to ensure that IBF products have parity of treatment with conventional products.
Imran Lum is an employee of the National Australia Bank (NAB), however the views and arguments set out in this Chapter do not reflect those of the NAB.
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Notes
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© 2014 Sally Percival Wood and Baogang He
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Lum, I. (2014). Islamic Banking and Finance in Southeast Asia: Can Australia Find a Niche?. In: Wood, S.P., He, B. (eds) The Australia-ASEAN Dialogue. Asia Today. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137449146_12
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DOI: https://doi.org/10.1057/9781137449146_12
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