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Election 2019: positioning our industry for a positive future

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“If brokers can focus on these three actions before the 18 May Federal Election and beyond, they’ll be well positioned for the future, no matter which party wins.”

This was one of the clear messages relayed in Connective’s 1 May pre-election webinar.

At the interactive session, Connective Director, Mark Haron and Group Legal Counsel, Daniel Oh, discussed the current policy positions of the major parties and answered some of the most common questions we’re hearing from brokers in the election lead-up.

The webinar also addressed what Connective – along with other industry leaders and brokers – can do to maintain momentum in educating policy makers about the mortgage broking industry and the potential implications of the recommendations from the Royal Commission report. We’re continuing to work hard to build ongoing dialogue with the right politicians, pre and post-election, striving to achieve the best outcomes for brokers and all Australians.

Below is a summary of the key points discussed in our webinar:

Pre-election: what you can do

Despite undeniable difficulties getting “cut-through” when the government is in a holding pattern and MP focus is squarely on re-election, both Mark and Daniel assured participants that brokers and their customers can still have a voice that will find a willing ear.

We encourage brokers to continue to visit our resources page as a reminder of what to focus on, and to find practical tips on how to go about supporting your business and the industry as we move toward election day and beyond. You will find tools to help you communicate directly with your MP and other key pre-election communications.

Hot issues: accessible, affordable home ownership and the prospects of small business

Marginal seats are a case in point. Here, MPs are especially attuned to grass roots pressure, particularly on hot issues that the broking community is ideally positioned to push, including the future of home ownership and the prospects of small business.

Some actions you can take include lobbying your MPs and, importantly, making sure you maintain contact with, and educate your customers about, the vital role brokers play in contributing to a strong, affordable housing market and a healthy, competitive mortgage industry.

It’s also important to remember that you as small businesses owners are important constituents and significant contributors both to your local communities and the economy.

When you combine supporting housing affordability, continued low interest rates, better competition in the mortgage industry – especially in relation to the big banks – and supporting small business, you have a pretty powerful lobbying proposition.

Policy roundup

A central part of the webcast was a run-through on who currently stands where on policy. While this is subject to change, staying aware of the respective positions of the major parties is the best way to be prepared for whatever happens after 18 May. Here’s a summary of what’s on offer from each of the major sides:

Under a Coalition government.

At this stage the Liberal Coalition maintains that broker remuneration will remain the same, including retaining trailing commissions. It has broadly expressed support for brokers and a desire to keep competition as it is. It also maintains that the across-the-board tax cuts on offer will support home ownership, freeing up funds that can be diverted to mortgages.

Under a Labor government.

Labor does not currently support a fee-for-service remuneration model either, however it will likely support removal of trail commissions. Indications are that Labor will discontinue trail commissions for loans post-July 2020 and commissions for deals secured up to that point will be grandfathered. Instead Labor will cap commissions at a fixed rate of 1.1 per cent. It has long undertaken to halve capital gains tax discounts, which will increase capital gains tax costs for investors. While tax cuts for low income earners rather than across-the-board cuts is a key area of Labor policy, Labor is also proposing a tax break for people investing $20,000 or more in equipment for their business.

Broader policy implications

There was a lot of discussion about the housing market and the potential implications of various policy implementations on purchasing sentiment, interest rates, the rental market and other key areas.

Although there hasn’t been any accurate modelling on this to date, one sure thing is that once we do have certainty and the right information, we will act swiftly to communicate our findings to our brokers, along with recommendations on both business and policy level to ensure you are informed and supported.

Connective will continue to advocate for you and the industry

We’re continuing to keep a close eye on both sides. That means, no matter who assumes government after 18 May, we will continue to lobby policy makers and influencers to advocate for brokers and inform key government and industry bodies on what we see as the most important policy considerations for the mortgage broking industry.

We have many areas of focus, and our position is clearly articulated on our website. Just one example, however, is the role of APRA. Our intention is to work with the government Treasurer of the day and other bodies to help ensure it receives the support and funding it needs to become a more proactive industry body. That includes making recommendations -for example, focusing their activity on the surveillance of license holders.

A final word: Respect is key. Be part of the solution.

Before you start lobbying, and even in your informal conversations through the community and with your customers, Mark Haron offered a word of warning: “No matter what side of politics you’re on, it’s vital to be respectful in your dialogue and discussion. As an industry, we will need to deal with whoever is in power. What you say now will be remembered later.”

If we’re seen as being partisan one way or the other, we’re at risk of not being part of a positive solution. This will cause us issues when we go to Canberra to have the vital conversations we need – and will have – to secure the future of our industry for the benefit of all. So be respectful, maximise the tools available to help shape the future market landscape your business will operate in, leverage the information and tools available to you via our website and industry bodes, and continue to engage with your clients to educate and reassure them. The future is uncertain, but we are focused on providing our brokers and the industry with reliable support.

Register to attend our post-election webinar on Thursday 23rd May at 11.30AM (AEST)