Labour flow would lift Sydney fin services


By Sarah Kendell

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Sydney could improve its status as an international financial centre by making skilled migration easier and more attractive for Asian financial professionals, according to two leading financial academics.

A newly launched report, funded by the Centre for International Finance and Regulation and co-authored by Dr Eric Knight from the University of Sydney and Professor Darius Wojcik of the University of Oxford, ranked Sydney as the number 10 international finance centre in the world.

Speaking to financialobserver, Knight said the main issue that had prevented Sydney ranking higher for competitiveness was its lack of integration with Asia.

“There’s been a lot of rhetoric about Australia in the Asian century, but the reality is over 80 per cent of our cross-border business comes from Europe, North America and New Zealand, and only a very tiny proportion from Asia,” he said.

Knight continued it was necessary for Australian financial services professionals to better share skills and contacts with their Asian counterparts, and the most logical way to do that would be for labour to form a greater part of Australia’s current free trade negotiations with Asian nations.

“Most of the free trade agreements have focused on import-export goods and not on labour, and I think that’s a gap,” he said.

“We would propose a four-year work visa for the industry that would allow financial professionals to move between the cities freely and cross-pollinate their skills, because we’re so wired into the US and Europe that we’re losing a lot of the business that’s being won in Asia.”

Wojcik explained the free movement of labour had been a key driver of competitiveness in European financial centres, which accounted for five of the top 10 financial centres globally.

“One of the most significant factors we found for competitiveness was being part of free trade agreements, particularly with regard to labour,” he said.

“The formation of the EU was a huge boost to Europe’s financial centres – London, Paris, Frankfurt and Amsterdam all have a lot of international business because of sharing a labour market.”

Wojcik also mentioned the creation of one ‘megacity’ within a particular country could also boost competitiveness.

“Leading financial centres need scope – if a city takes its financial centre seriously in its developments, it has to be prepared to grow,” he said.

“We have seen this with Hong Kong, which has grown a second financial district, and in New York where financial activity now extends as far as New Jersey on the west side of the Hudson River.”

Knight said there was scope for Sydney to take the same approach in its urban development, with the creation of Parramatta as a second CBD.

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