Australia's major parties have battled it out on the floor of parliament, with the topic of broker remuneration taking centre stage.
Commonwealth Treasurer Josh Frydenberg has demanded that the Labor Opposition disclose its stance on broker remuneration reforms recommended by Commissioner Kenneth Hayne in the final report for the banking royal commission.
Following the release of the final report, the Labor Party announced that it would implement all of Commissioner Hayne’s recommendations, which would include banning commission-based payments to brokers.
In response to a question from Deputy Leader of the Opposition Tanya Plibersek during a session of Question Time in the House of Representatives, Mr Frydenberg urged the Labor Party to provide greater clarity to mortgage brokers and reiterated his concerns over the potential impact of a borrower-pays model on competition in the banking sector.
“The Labor Party have had nine days to respond to the royal commission, and what have we seen?” he said. “We’ve only seen stunts.”
He continued: “What is the Labor Party going to do? What is the Labor Party saying to the 17,000 mortgage brokers? Are they going to say to the 17,000 mortgage brokers, small businesses, that they ignored the advice of the Productivity Commission?
“Are they going to say to the 17,000 mortgage brokers, employing 26,000 people, that they don’t care about competition? Are they going to say to the 17,000 mortgage brokers that they want to give a big free kick to the big banks?”
The Treasurer added: “I’ll tell you what the 17,000 mortgage brokers, the small businesses across all your electorates, want to know: what are you going to do for their future, or are you going to end their businesses in your response to the royal commission, whenever we get it?”
Later in the proceedings, Shadow Treasurer Chris Bowen questioned the government’s decision to delay the implementation of Commissioner Hayne’s recommendations, and suggested that the government schedule extra sitting of parliament to introduce the legislative reforms.
Labor member for Barton Lunda Burney echoed Mr Bowen’s sentiment and accused the government of favouring banks and brokers over Australian consumers.
“As the banking royal commission has exposed, too many financial products have been crafted in the interests of brokers and banks, not ordinary Australians, and Australians know that this government will do anything it can to protect the big banks,” Ms Burney said.
“The Prime Minister and the Liberal Party cannot be trusted to implement the recommendations of the banking royal commission. And, as has been mentioned and will continue to be mentioned, they did vote against the banking royal commission 26 times and they want to give the banks a tax cut."
She continued: “We should be changing the laws straightaway to clean up banks, but the Morrison part-time parliament is sitting only 10 days in eight months. The leader of the Opposition has written to the Prime Minister urging him to hold two extra sitting weeks so that the Prime Minister can start cleaning up the banks now. The Liberals tried to stop the royal commission from happening. They will now try to go soft on the banks and will go slow on implementing the reforms. They cannot be trusted.”
The latest stand-off between the major parties follows remarks from Coalition MPs earlier this week, who railed against Commissioner Hayne’s broker reforms, claiming they would “ride roughshod” over brokers and enhance the power of the big four banks in the mortgage market.
The broking industry has strongly opposed such changes, with industry leaders flagging the risks of structural changes to the broker model on competition in the mortgage market.
The industry has also launched campaigns promoting the broker proposition, with the Mortgage & Finance Association of Australia funding a “Don’t Kill Competition” campaign, which aims to demonstrate to a mass audience the negative ramifications of potential policy changes.
Grass-roots campaigns have additionally been launched, which include petitions with over 40,000 signatures.
[Related: MPs slam call to ban upfront commissions]