The federal Minister for Small Business, Michael McCormack MP, has said he is “in awe” of what brokers do and is urging them to email him to highlight any areas where bureaucracy can be reduced.
Speaking at a breakfast meeting hosted by the Mortgage & Finance Association of Australia (MFAA) in Sydney yesterday, the Small Business Minister and representative for Riverina, NSW, said that government “values what [brokers] do” and wanted to help reduce the “burden of bureaucracy” on small business owners.
He said: “What really struck me from the people [I met today] is the fact that your sector does face challenges. There is no denying that… You are facing many challenges and also many opportunities in what you do every day, driven by housing affordability, driven by the banking sector, driven by regulation and government — but also driven by such things as innovation and the need for your sector to get onboard.”
He continued: “I am in awe of what you do. I know how hard it is. I don’t just say that lightly [and] I don’t just say that because I’m the Minister for Small Business, I truly am in awe of what you do…
“You’ve taken the leap of faith to be your own boss, to be someone who is the master of their own destiny and that takes a lot of effort and work.
“I know, and my government knows and appreciates, what you do. Not just for the small business sector but what you do for your customers, your consumers — those people who need finance, those people who need good advice — and that's the sort of thing you people are doing each and every day.”
The minister added: “You’re starting very early in the morning and finishing very late at night and sometimes when you get home you've got more paperwork, courtesy of our government, and that's what we're trying to cut through as much as we can; that regulation over-reach.
“That's why we're trying to cut through some of the bureaucracy. And if there are examples in your sector, in your industry, of federal government bureaucracy paperwork that you feel is a little bit onerous or a little bit replicated in some other areas of state, please let me know.
“It's not hard, just google my name and flick me an email or flick it to your industry body. Because we want to lift the burden of bureaucracy, as much as we can as a government, from you.”
Noting the MFAA’s earlier statement that there were 17,000 mortgage brokers in Australia, Minister McCormack said that although a “mere handful” were at the Sydney event, they were a “very important handful” given the fact that Sydney is “a driver of much of Australia’s economy”.
He explained: “What you people do for your customers here in Sydney is so, so vitally important. You're assisting with not just home loans mortgages but financing many small businesses. This is as many bank branches reduce their retail footprints… making brokers the only source (in some areas) of financial services for what, I would say, is a growing customer base. That's one of the reasons why your industry is so strong and we as a government want to make it stronger…
“Brokers now do more than half of all home loans and that is exactly what our government wants to see - you people ‘having a go’. And it’s important that its incumbent on government to make policy setting as easy for you to be able to actually have that go, to back yourself to do what you have done so well, for so many years.”
Brokers ‘generally get it right’
Taking a moment to drink some water, Minister McCormack noted that he was drinking from the same glass that MFAA CEO Mike Felton had used and joked: “If you can’t trust a mortgage broker, who can you trust?”
Continuing on the theme of trust, the minister touched on the recent ASIC remuneration review.
He commented: “This was finalised last month and what they found is that, as you would know, current ownership remuneration structures could create conflicts of interest and lead to poor outcomes for consumers. and of course, none of us want to see poor outcomes for consumers, not least of which government, but also not least of which you, the people in this room. Repeat customers, repeat businesses are what makes your small business great.”
Noting that the review didn’t recommend government action, but instead asked the industry to provide feedback, he said he “agreed wholeheartedly with that approach”.
“The government values this industry very, very highly. We put you up there, we really do. And I do personally, and I know people in this sector from my dealings over the years… that you people generally get it right. You generally get it right 99.9 per cent of the time. So that's across industry models across Australia [and] is pretty darn good. The government wants to help you, and I know you want to help yourself, so I encourage that you engage with the review process.”
He concluded: “More transparency leads to better outcomes to consumers and that makes your industry more sustainable.
“Ultimately, it’s the best outcome for everyone and that’s how the industry will continue to grow and that’s what the government wants.”
[Related: Industry associations join forces]