Today industry, government and consumers came together at Parliament House for a forum discussion about issues affecting the housing industry, including changes to broker remuneration and the ALP’s proposed changes to negative gearing and capital gains tax.
I was invited by Senator Zed Seselja, Assistant Minister for Treasury and Finance, to be part of a panel of experts to address the forum. With me were Connective Director Mark Haron, Yellow Brick Road CEO Frank Ganis, Housing Industry Association Chief Executive – Industry Policy Kristin Brookfield, Property Investment Professionals Australia Chairman Peter Koulizos and Property Investors Council of Australia Chair, Ben Kingsley.
The forum discussions were across mortgage broking and housing tax with open questions from the floor to the panel of experts. It was an incredibly valuable event, providing great insight into the likely impacts from Labor’s proposed negative gearing and capital gains taxation proposals. Like proposed changes to broker remuneration, it’s clear that the unintended consequences need to be considered, particularly the unintended consequences that could potentially flow on to you customers and your businesses.
AFG is committed to actively advocating and engaging in discussions with key political decision-makers across the country. Many of you have already taken up the challenge to engage with your political representatives and it has been very effective in educating decision-makers about the vital role our industry plays in providing competition in the lending market and choice to consumers. We are currently planning a series of events to provide a platform for the broker voice, and this is where you come in. Please keep an eye out for these events as they are announced – we encourage as many of you to attend as possible.
Please see below for a recap of my address to the forum prior to participating in the forum discussions.
AFG CEO DAVID BAILEY
Remarks to Housing Tax Forum, Parliament House Canberra, 4th April 2019
Many thanks to all of you here today.
In the two months since the release of the Banking Royal Commission’s final report, Australia’s mortgage broking industry has been thrust into the national policy spotlight.
It’s not a place where we are comfortable. Or where we wanted to be.
Our industry is a highly connected community of professionals, small businesses and their customers who believe in choice, fairness and prosperity for all.
We don’t usually talk about ourselves. It’s not our style to trumpet how good we are.
We are focused on our customers. If they keep coming back, that’s a win. If they refer us to their friends and family, that’s a reward for good service. That’s our benchmark and how we judge ourselves.
But the Royal Commission has forced us, as an industry, to rally together and contribute to important conversations in the community about the role and value of mortgage broking in Australia.
We have found our voice.
We are a significant industry. The mortgage broking sector generates $2.9 billion in gross value added to the Australian
economy each year. And we support the employment of more than 27,000 workers.
The public discussion about our sector in the past few months has led to a greater understanding of what we do. I’m sure Zed agrees.
We have seen respected economic institutions including the RBA and Treasury and the heads of some of the big banks join the public debate, highlighting the benefits we bring through competition and warning of the dangers of poor policy that could damage the sector and hurt consumers.
Of the 76 recommendations from the Royal Commission, only one – the one relating to mortgage brokers – was not fully embraced by the Government.
Both major parties have acknowledged the role our sector plays in generating competition in the home loan market and rejected the Royal Commission recommendation for an upfront fee. Both the Government and Labor have agreed this approach would be an unnecessary financial burden and risk to competition and choice.
The Treasurer’s announcement on trail commissions last month – where the Government decided not to prohibit trail commissions on new loans and opted to review their operation in three years – is welcome additional support.
The decision reflects the considered approach we have been urging all along and provides certainty. It would seem sensible for the Labor Party to adopt a similar position.
We all want to avoid our sector becoming a political and policy football heading into the election.
In the meantime, we are committed to advocating our case. That’s why we are here today. We will be working with all
parties to explain our position and avoid any negative impact from policy proposals.
That’s one of the big takeaways from the Royal Commission process. The more people know about us, the more favourable they are.
Our customers know us best. And more than 95 per cent of customers are happy with the performance of their broker. That’s why will be taking any opportunity to tell our story.