The MFAA has told the Productivity Commission that outdated qualifications, tax settings, and regulatory overload are holding back the next phase of growth in broking.
The Mortgage & Finance Association of Australia (MFAA) has lodged a submission to the Productivity Commission’s inquiry into reducing barriers to business dynamism, saying that current policy and regulatory settings are making it difficult for broking businesses to grow.
The submission opened by saying that the skill expectations on new brokers had outgrown the current education framework.
The peak body then set out the practical challenge around qualifications, saying that current entrants faced far more complex lending and compliance demands than when minimum standards were set.
“The current minimum education requirement of a Certificate IV in Finance and Mortgage Broking, introduced in 2009, no longer reflects the complexity of modern mortgage broking,” the paper said.
The submission said that this mismatch also affected recruitment and training.
“At the same time, broker businesses face growing challenges attracting and developing new talent. A qualification framework that does not reflect the realities of modern broking can leave new entrants underprepared for the complexity of running a broking business and meeting their regulatory obligations,” the MFAA said.
To address this, the MFAA recommended lifting the formal benchmark and embedding more structured development.
“Modernise the Diploma of Finance and Mortgage Broking Management and recognise it as the minimum qualification for new entrants,” the MFAA said.
“Support structured mentoring and supervised development pathways and encourage practical, work-based learning that develops both technical capability and business skills.”
Calls to fix tax, tech, and regulatory settings
On payroll tax, the MFAA said that differing rules created unnecessary complexity for businesses using contractor and aggregation models.
“Payroll tax rules differ significantly between states and territories, with varying thresholds, exemptions and approaches to the application of contractor provisions,” the MFAA said.
In response, it urged co-ordinated action by governments to smooth these differences.
It recommended the federal government “work with states and territories to improve the consistency of payroll tax settings and administration, including thresholds, exemptions and guidance on contractor provisions, to reduce unnecessary complexity and barriers to business expansion”.
The paper also turned to technology dependence and rising cyber risk, saying that small broking businesses now relied heavily on digital tools.
To build resilience, the MFAA said it wanted more practical support and investment in secure infrastructure.
It proposed “partnering with industry associations to deliver practical cyber resilience and digital capability programs for small businesses and continued investment in secure digital infrastructure, including the CDR and Digital ID”.
Reducing cumulative compliance burden and supporting succession
A major section of the submission is devoted to how overlapping compliance obligations and inconsistent processes weigh on productivity – even where individual rules are well‑intentioned.
“Mortgage and finance broking is a highly regulated profession, and brokers support strong consumer protections and professional standards,” the paper said.
“However, for many broker businesses, the challenge lies in the cumulative effect of overlapping obligations, duplicative processes and inconsistent requirements across regulators, lenders and industry participants.”
The MFAA accordingly sets out several suggestions aimed at reshaping how new regulations were designed and implemented.
The submission called for the application of the government’s “Small Business Regulatory Impact Statement effectively to all new regulation, including consideration of cumulative costs and implementation impacts”.
It also pushed for greater alignment in everyday processes, urging policymakers to “simplify and standardise information collection, reporting and customer verification processes across government and industry”.
As the industry matures and with more founders looking to exit, the MFAA also said that succession and ownership transition were becoming core issues.
To support orderly transitions, the submission outlines the guidance and monitoring the MFAA wanted to see, including “providing clear and practical guidance for small businesses on business valuation, ownership transition and the application of recent capital gains tax changes as well as small business succession planning and business transfer options”.
[Related: AFCA report puts broker processes under spotlight: MFAA]
Want to see more stories from trusted news sources?
Make The Adviser a preferred news source on Google.
Click here to add The Adviser as a preferred news source.
