The Australian financial services industry is expected grow rapidly this year after the country's government officially welcomed the Australian Financial Centre Forum's report on the country's future as a top financial services hub.

The study, also called the Johnson Report, made 19 recommendations on the steps policymakers must take to maximize potential gains from the fast-growing Asian financial sector, the most popular of which was the creation of a financial centre taskforce that would help ensure healthy reforms and a stable regulatory environment.

The other issues raised include the removal of the withholding tax on funds raised by local banks offshore and interest paid by outside banks to their Australian branches; amendments to tax laws governing offshore banking units' ability to gain additional international business, and greater clarity when it comes to the taxes foreign investors need to pay when going through local intermediaries, among others.

The study was conducted by a nine-person group established in November 2009, with Macquarie Bank director Mark Johnson at the helm. 

 Australia has one of the most efficient financial services industries in the Asia-Pacific and that reforms need to be implemented to maximise potential gains, the report says. A more relaxed foreign policy, among others, will undoubtedly attract even more investment into the country, especially after Australia had proven itself relatively resilient when the 2008 crisis struck.

"The Rudd Government has already taken a range of actions in line with its policy of promoting Australia as a financial services centre," said Hon Chris Bowen MP, the minister for financial services, superannuation and corporate law, in a statement. "We are committed to ensuring that our financial sector is well-placed to make the most of those opportunities that will emerge as the economic recovery takes hold."

The government said it will look into the final recommendations of the report and reveal its response later in the year.