Industry sets out wish list to new Financial Services Minister

Both the FBAA and MFAA welcomed the appointment, saying they had hope to have continued positive dialogue with the new minister.

FBAA – focus on buffers and clawbacks

“The FBAA has enjoyed a close relationship of mutual respect with the Federal Government over many years, which has resulted in significant progress for the finance and mortgage broking industry,” said managing director of the FBAA, Peter White AM, noting that the new minister would be able to access data provided to Treasury by the association, including on areas like clawbacks, buffer rates, and best interests duty.

He particularly said that lowering the buffer could unlock billions of dollars for borrowers and “make a huge difference in the lives of hundreds of thousands of borrowers, at no cost to taxpayers”.

“This is just one of the issues that we will be discussing with Dr Mulino and other senior ministers that will focus on the best outcome for borrowers and our industry,” White said.

“I am looking forward to bringing him up to date on all of these issues and believe the transition will be seamless due to our strong standing with many senior members of the Government including Treasurer Jim Chalmers, Prime Minister Anthony Albanese and finance minister Senator Katy Gallagher, who visited our office some time back to discuss policy that impacts the industry.”

The FBAA MD said that the Labor government has been trusted by Australian consumers to implement policy that improves the lives of Australians and ensures that home ownership is not just a dream but a reality.

He also took the opportunity to congratulate new Opposition Leader Sussan Ley, saying: “I particularly honour her as the Liberal Party’s first female federal leader.”

MFAA – making CSLR fair, prioritising CDR, and implementing housing promises

The CEO of the MFAA, Anja Pannek, also congratulated the new ministry members, including Mulino’s ascension to Assistant Treasurer and Minister for Financial Services (with whom the MFAA has previously worked in his role as chair of the House of Representatives standing committee on economics).

“Dr Mulino led the Inquiry into Promoting Economic Dynamism, Competition, and Business Formation where we had the opportunity to brief him on the important role brokers play in providing choice and competition,” Pannek said.

“We look forward to continuing to engage with Dr Mulino in his capacity as the new Assistant Treasurer and Minister for Financial Services. This includes highlighting the critical role of mortgage and finance brokers in providing choice and competition for both home loan borrowers and business owners.

“We also want to ensure that the regulatory environment, including the broker Best Interests Duty, is fit for purpose and producing good consumer outcomes.”

She said that the MFAA would like to see an immediate focus on:

• Ensuring the Consumer Data Right remains a core policy priority.
• A commitment to ensuring industry funding for the Compensation Scheme of Last Resort is “fair and proportionate”.
• Competition in the home loan sector continues, including “prioritising a better and more efficient home loan discharge process”.
• Implementing election housing commitments, including the expansion of the Home Guarantee Scheme and Help to Buy scheme.
• Prioritising policies that continue to support and enhance access to credit for small businesses.

“We look forward to continuing engagement with Dr Mulino, Hon. Clare O’Neill and Hon. Anne Aly, advocating for the interests of our members and the mortgage and finance broking industry,” she said.

Members of the lending industry have also set out their wish list for the new Financial Services Minister, with Alexis George, AMP Limited’s CEO, asking for a renewed focus on retirees.

She said: “Over the next decade, more than 2.5 million Australians are expected to transition into retirement. That number is set to rise to nearly one in four Australians in less than 40 years. While superannuation balances and household wealth have grown, too many Australians still struggle to navigate an overly complex retirement system.

“We look forward to working with the new Minister to continue to implement targeted and well-considered reform – particularly by improving financial literacy and access to advice, simplifying the retirement system, and encouraging innovation in retirement products and services.”

Meanwhile, the Customer Owned Banking Association (COBA) has urged the incoming government to prioritise four policies that boost competition in Australian banking, which it said was “ultimately better for consumers”:

• A tiered regulatory approach, aligned with a bank’s risk profile and governance structure (“easing the undue burden placed on customer-owned banks”).
• Reform of capital requirements for standardised banks to create a more equitable system (given customer-owned banks must hold more capital than major banks for comparable loans).
• Leveraging the government balance sheet to address customer-owned banks’ funding disadvantage (as mutuals cannot meet the ‘too big to fail’ status provided to majors by credit ratings agencies).
• A more streamlined and efficient merger process for customer-owned banks.

These four key policy asks were also included in COBA’s submission to the Council of Financial Regulators’ (CFR) Review into Small and Medium-sized Banks.

COBA CEO Michael Lawrence said: “We need a diverse banking landscape where both investor-owned institutions and customer-owned banks can thrive, so Australians have genuine choice when it comes to their finances. Regulatory settings can either promote a dynamic market or inadvertently stifle competition, so we urge the incoming Government to prioritise policies that boost competition in Australian banking...

“Unless government policy prioritises diversity, community needs, and innovation, we risk diminishing a banking sector that caters to the real needs of people, competing only on price margins driven by scale and efficiency.”

[Related: New Financial Services Minister announced]