The role of small-business owners and brokers in helping re-elect the Coalition back into power cannot be discounted, the head of an SME lender has said.
Peter Langham, the chief executive of business financier Scottish Pacific, has said that while the Coalition government may have won the federal election for numerous reasons, “you can’t discount the role played by hundreds of thousands of small-business owners and of Australia’s 20,000-strong broker community”.
Drawing a parallel between the 1996 election, in which John Howard defeated Paul Keating following a “groundswell of support from aspirational electorates (such as western Sydney) full of small-business people who had traditionally voted Labor”, Mr Langham noted that early analysis indicates that this election may also have been influenced by “Howard battlers”, who would have “stuck with the Coalition” due to Scott Morrison’s tax and business policies.
This could have “achieved more cut-through than Labor’s wealth redistribution and big-picture policies,” the ScotPac CEO said.
For example, Mr Langham said that both the accounting and the broking industries may have supported the Coalition due to its policies.
“This election, many accountants were also up in arms over the ALP’s policy to cap the deductibility of accountant fees, fearing that this would have an impact on individuals and small businesses seeking advice. There were individual and industry-based appeals to small business voters about the impact this could have on their businesses,” he said.
Mr Langham continued: “The mortgage broking industry, also concerned about their livelihood, had a positive reaction to the Coalition’s broker remuneration policy, which delayed for three years a decision on banning trail and upfront commissions (one of the recommendations of the Hayne royal commission).”
Noting that the re-election of the Coalition would mean that there would likely be no radical changes to remuneration during the next term of government, Mr Langham echoed calls for the broking industry to continue engaging with a “united voice” to ensure that this issue is “positively resolved” following a review in three years.
“The broking community has a three-year moratorium in which to convince the government and opposition of the best way – for the economy and for the broking sector – to remunerate brokers,” he said.
“It’s important that they do this. Brokers have helped drive lending competition and increased the visibility of non-bank lenders, and it would be a shame for the Australian economy if competition was stifled because of action on broker remuneration.”
The SME lender CEO added: “Brokers provide an essential service for anyone looking for help with the right funding solution, whether they want a home loan, a way to finance a piece of essential equipment, or a working capital facility that allows their business to grow. The independent broker helps consumers see all the options open to them, including business lending options beyond property-secured funding.”
Looking forward, Mr Langham said that the small business community will “watch with interest the naming of the Prime Minister’s new Cabinet”, with the hope that a senior politician will be given the “crucial Small Business portfolio, to highlight the importance of this sector to the national economy”.
“The Morrison government is returned at a crucial time. It is hoped the Coalition’s tax concessions to middle-income earners will provide a much-needed boost to the economy. After decades of growth, the economy has stalled, amidst tepid consumer confidence and a troubled property sector,” Mr Langham said.
Highlighting that Scottish Pacific’s recent SME Growth Index found that business owners were prioritising tax cuts above all other measures, Mr Langham said that the new Morrison government should ”prioritise simplifying the complex tax system and cutting SME red tape and incentivising the states to get rid of payroll tax”.
“These initiatives would have the biggest daily impact for Australia’s small to medium business sector, energising business owners, encouraging business investment and driving growth and innovation,” he said.
Mr Langham’s calls build on those made by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, and several players from the small business and mutual banking sectors.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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