Broking industry weighs in on housing-heavy budget

While members of the broking industry have welcomed the housing measures, others have lamented that the budget – the last one handed down by the Albanese government ahead of the upcoming federal election – did not go far enough.

The CEO of Mortgage & Finance Association of Australia (MFAA), Anja Pannek, broadly welcomed the budget’s housing focus, noting the government’s measures to improve home ownership, including an $800 million commitment to expand the Help to Buy equity scheme.

“While there has been no announcements regarding the Home Guarantee Scheme, we welcome continued support for buyers including first home buyers to enter the market, to own a home and to build a secure financial future with the assistance of their mortgage broker,” Pannek said.

Commenting on the budget’s relatively light list of measures to support small and medium-sized enterprises (SMEs), Pannek said that the decision not to reinstate the $20,000 instant asset write-off was a missed opportunity.

“The feedback we have had from our commercial and asset finance broker members is that the instant asset write-off is important and something they value. A permanent scheme will provide certainty to our members and their small business clients,” Pannek said.

The managing director of the Finance Brokers Association of Australia (FBAA), Peter White, also praised efforts to boost housing affordability.

“Our industry, consumers, business and the economy at large, will all benefit from initiatives that make it easier to purchase a home and to rent. Therefore we welcome all of the budget announcements in this area including the expansion of the ‘Help to Buy’ program,” White said.

Commenting on measures to relieve cost-of-living pressures, including new tax breaks, White said: “Any cost of living relief measures, of which there are some including a continuation of energy relief, will assist finance brokers. To quote small business ombudsman Bruce Billson, ‘cost-of living increases are also cost-of-doing-business increases’.”

However, White said that more policy changes may come as the federal election approaches: “Many areas of the federal budget appear to focus on continuing previous policy initiatives, and given a federal election is just around the corner, I believe that policy announcements by the major parties as part of their election campaigns will be more significant.”

‘Leg-up’ for first home buyers

Finance brokerage Loan Market was similarly positive about the housing initiatives, saying first home buyers would welcome budget incentives aimed at helping them get into the market but said that housing supply remained the overarching challenge.

“The Help to Buy scheme provides a leg-up [for first time homebuyers] with only a two percent deposit required. On that fact, we expect brokers will see an uplift of inquiries ahead of the scheme’s introduction,” Loan Market CEO David McQueen said.

“The shared equity model helps people get into the market faster and it does improve affordability, with borrowers only making repayments on their share of the loan.”

However, he said that as there are only 10,000 applications offered in the Help to Buy scheme each year, it will be “highly competitive”.

“It will be interesting to hear the thoughts of borrowers on how the shared equity model aligns to their two-, five- or 10-year property plans,” he said.

“But, based on the number of first home buyers in the market, securing a spot will still be competitive.”

The executive director of aggregation group Connective, Mark Haron, commended the government’s “commitment to providing pathways to home ownership and addressing the housing crisis, both critical issues for the community”.

“The expansion of the Help to Buy Scheme is a step in the right direction, and will assist more buyers by lowering deposit hurdles, while higher income caps make the scheme accessible to more individuals, couples and families,” he said, adding that further support through the Regional First Home Buyer Guarantee also addresses one of the biggest barriers to entry: saving for a deposit.

“At a time when cost-of-living pressures and high interest rates are impacting household budgets, having more financial flexibility can make a significant difference for buyers,” Haron said.

Budget a ‘missed opportunity’ for structural reforms and SMEs

However, not all industry bodies were as supportive of the budget’s efforts to improve housing supply, affordability, and accessibility.

The Housing Industry Association said the budget was a “missed opportunity to deliver a concrete housing plan”.

Managing director of HIA, Jocelyn Martin, said: “It was pleasing to see boosting housing supply as one of the key policy areas for this budget, but the polices announced have missed the mark on addressing the key structural reforms needed.

“If we are to meet the national target of 1.2 million new homes over five years we need much deeper and significant reforms.

“Governments can’t just keep doing more of the same and think it will solve the situation; rather bold and courageous leadership is needed and unfortunately this budget has missed the mark to deliver a truly transformative package of housing reforms.”

The Council of Small Business Organisations Australia (COSBOA) also described the budget as a “missed opportunity” to drive the engine room of the economy.

COSBOA CEO Luke Achterstraat said the budget largely overlooked small businesses.

“With decade-high insolvencies and crippling energy, rent and input costs, this budget had the opportunity to provide a long-term roadmap for small business growth,” Achterstraat said.

“Unfortunately, the budget largely recycles existing policies and fails to substantially deliver for the 2.5 million small businesses in Australia and the 5 million people they employ.”

However, COSBOA welcomed measures to support small business including extending unfair trading practice protections to small businesses and businesses regulated by the Franchising Code of Conduct.

[Related: Housing features prominently in federal budget]