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Assistant Treasurer Stephen Jones has told the FBAA conference that Treasury will continue to engage with brokers to ensure consumers are able to access home loans.
Speaking in a video message to the broker audience at the national conference for the Finance Brokers Association of Australasia (FBAA) on Friday (1 November), Assistant Treasurer and Financial Services Minister, Stephen Jones, outlined that the Treasury was keen to hear broker feedback on ensuring the financial services sector delivers the best outcomes for consumers.
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During his speech to delegates at the Empower Excellence conference in the Gold Coast, Jones thanked the FBAA team and managing director Peter White AM for “their great service to [FBAA] members with [their] passion and [their] ongoing advocacy and engagement” and thanked them for “sharing [their] priorities for the finance and mortgage broking industry with [him]”.
This included a meeting between Jones and the FBAA in July of this year, in which the issues of clawback and net-of-offset commissions were discussed.
Jones said he had shared the issues raised with the broader Treasury team and looked forward to further engagement with the broking industry as it worked through “these issues and matters as part of [its] broad agenda to ensure that the financial services sector delivers the best outcomes for members”.
During his speech, the Financial Services Minister also said that more than 70 per cent of home loans are written by mortgage brokers, adding that “mortgage brokers play a really key role” in delivering good consumer outcomes.
”A growing number of Australians are using the services of a mortgage broker to secure a home loan. In 2023 approximately 70 per cent of new residential home loans were secured by our mortgage broker,” he said.
“You understand how Australians are doing tough as we’ve transitioned away from historically low interest rates in the last few years. And more Australians are seeking your advice to obtain better mortgage terms.
”We want to make sure that this process is working for consumers across the whole economy,” he said, noting that the Albanese government had passed its first tranche of financial advice reforms earlier this year and was on track to legislate the next tranche this term.
“We look forward to continuing to engage with your sector to ensure that this delivers for consumers,” Jones told the broker audience, saying that the reforms were particularly focused on identifying and fixing “where well-intended laws are actually just a[n] unnecessary cost without a benefit to consumers”.
A key part of CDR is improving borrowing process
Jones went on to tell FBAA brokers that one area where there had been high costs had been in the Consumer Data Right (CDR) and roll-out of open banking.
Outlining that the government recently announced “a reset”, Jones said this was because “compliance costs have been too high and the consumer uptake has been too low”.
The Assistant Treasurer said: “The government believes it’s the right of every consumer to be able to access and unlock the value of their own data, but we need to do things differently to justify the substantial public and private investment in the CDR.”
He said key to this was reducing cost and focusing on “unlocking use cases that consumers actually want and find value in”.
“Now I can tell you, consumer finance and borrowing is at the very top of that list,” he said.
“The CDR has the potential to help consumers get a complete picture of their financial position and chart a way forward. It can also reduce unnecessary friction and help Australians by better deals to support home ownership.”
The Assistant Treasurer said that CDR will expand to non-bank lending data early in the new year, with the intent to be operational by 2026.
”The use of CDR in non-bank lending provides opportunities for better value for money for consumers, so that we drive competition innovation and better outcomes for the consumers and that’s what it’s all about,” Jones said.
Speaking after the Assistant Treasurer’s update, White thanked Jones and the Treasury for their ongoing willingness to meet and listen to the broking industry, but said he hoped more would be done on clawbacks and net-of-offset commissions.
He said he would be discussing these issues at a private dinner with Jones and Treasurer Jim Chalmers in Canberra at the end of this month.
“So I expect by the end of November, Stephen [Jones] would have had these conversations with Jim [Chalmers], and we hope to see some progress from our conversations. Because we’ve waited too long for it,” White said.
“On the key issues, the jobs not done; clawbacks and net-of-offset, as well as the other things were working on,” he said, referencing the move to digitise loan documentation so mortgages can be processed “at a quicker rate”. He said this was important to ensure that “the rug doesn’t get pulled from under the [brokers’] feet at settlement”.
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