CANBERRA – Treasurer Jim Chalmers has directed Australia’s primary financial regulators to prioritize economic growth when overseeing banks and listed companies.
On July 16, 2026, the Treasurer issued new statements of expectations for the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC), defining how the government expects the agencies to exercise their powers.
The directive marks a strategic shift to reduce regulatory friction and unlock productivity in a financial sector that has seen a steady increase in compliance requirements over the last decade, while reaffirming the regulators’ core mandates of financial stability, market integrity and consumer protection.
Regulatory Rebalancing
The move follows long-standing complaints from financial institutions and corporate leaders regarding the accumulation of “red tape.” This regulatory buildup was largely driven by the aftermath of the Global Financial Crisis and the findings of the banking royal commission, both of which prompted tighter rules to prevent corporate excess and protect consumers.
The refreshed expectations sit within Australia’s “twin peaks” model of financial regulation, under which APRA is responsible for prudential supervision of banks, insurers and superannuation funds, while ASIC polices market conduct and corporate law compliance under the Corporations Act.
“This is all about enabling our financial regulators to unlock more productivity and more growth in our economy,” Chalmers said. “These statements will ensure our financial regulators can help support productivity, unlock investment and grow our economy while preserving financial stability and market integrity and protecting consumers from harm.”
The Treasurer framed the changes as a recalibration rather than a rollback of safeguards, saying the objective is to strike a clearer balance between reducing the regulatory burden on businesses and safeguarding the stability of the financial system and markets.
Productivity and Cost Reduction
The new directions are linked to a $10 billion productivity package introduced in the budget and outcomes from an economic reform roundtable held last year, positioning regulatory settings as a central lever of the government’s growth agenda rather than a purely technical exercise.
The government estimates that targeted regulatory changes will save the financial sector $780 million annually. Specific measures flagged include:
- Overhauling requirements for climate-related financial disclosures to better align with emerging international standards while limiting duplicative reporting.
- Updating electronic record-keeping rules to reflect contemporary digital practices and reduce legacy paperwork costs.
- Increasing the cap on covered bond issuance for banks to broaden funding options.
Covered bonds, which are debt securities backed by a pool of assets-typically mortgages-provide banks with a diversified funding source that remains on their balance sheets. Increasing the issuance cap is intended to improve capital flexibility, lower funding costs and support lending growth, particularly in housing and business credit.
Institutional Framework
The updated expectations replace or build upon previous frameworks that guided how regulators interpreted their statutory mandates in practice.
Chalmers previously oversaw the 2023 APRA statement, which focused on financial safety and competition while ensuring the flow of finance to support sustainable growth. That 2023 directive specifically noted that while the regulator should aim for a low incidence of failure in the superannuation sector, it would not guarantee a zero failure rate, signalling that some risk-taking is consistent with a functioning market.
The new APRA expectations are understood to place greater emphasis on how prudential settings affect productivity, investment and the cost of capital, alongside existing priorities such as resilience, crisis readiness and the protection of depositors and superannuation members.
The ASIC statement had not been updated since 2021 under former Treasurer Josh Frydenberg. The previous version focused on post-pandemic economic recovery and the minimization of regulatory costs for businesses and consumers. The revised guidance is expected to more explicitly connect ASIC’s enforcement and rule-making to broader economic outcomes, including the timely approval of capital-raising and corporate restructuring activities.
Together, the refreshed directions seek to influence how the two agencies set priorities, allocate resources and sequence enforcement, without formally changing their statutory powers or independence.
Political Opposition
The policy shift has faced criticism from the opposition, which argues the government is reframing a structural economic challenge as a regulatory coordination issue.
Shadow Treasurer Tim Wilson contended that the government is outsourcing its economic responsibilities to regulators.
“The Albanese government’s economic model stokes inflation, taxes inflation and spends inflation,” Wilson said. “Now, after smashing confidence in the future of the Australian economy in their budget, they’re outsourcing responsibility for growth to regulators.”
Wilson further asserted that living standards will continue to decline without a change in economic leadership focused on overall growth and productivity, rather than new guidance to independent agencies.
Next Steps for Regulators and Markets
The APRA and ASIC boards are now required to integrate these growth-oriented expectations into their active policing of the banking and corporate sectors, including in how they design guidance, engage with industry and deploy supervisory and enforcement tools.
Market participants will be watching how quickly the new settings translate into concrete rule changes and supervisory decisions, and whether the promised compliance savings materialise without eroding hard-won gains in consumer protection and financial stability.
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