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The Hon Michael McCormack MP, Minister for Small Business, has said that he “agreed” with ASIC’s proposals for broker remuneration, including that no government action is needed.
Speaking at the Informa Credit Law Conference in Surfers Paradise on Thursday (12 October), Minister McCormack told delegates that ASIC’s remuneration review found “in a nutshell… that the current ownership and remuneration structures could create conflicts of interest. That said, however, it didn’t recommend government action.
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“Instead, it outlined six proposals for the industry, including improving the standard commission model and moving away from bonus commissions and soft dollar benefits.
“I agreed with that approach — and I’ve been encouraged by what’s been happening since.”
The Small Business Minister noted that members of the mortgage industry, such as the broker associations, have formed a cross-industry forum with lenders, aggregators, the Australian Bankers Association (ABA) and consumer groups to “discuss the industry’s response”.
“That was an important step forward — and a welcome one — and this response will be taken into account when the government finalises its response to the review,” the official said.
Coalition is 'on the bandwagon' of fintech
Minister McCormack also revealed that the coalition was “on the bandwagon” for fintech, which he said was at the forefront of the financial system’s “transformation”.
“It’s changing the way business does business and opening new doors — through which there’s new products, more choice and, crucially, better value for the punters.
“In short, it’s pushing businesses to do better, to be better — something I know they’re primed to do.”
He highlighted a recent report from KPMG, which found that Australia is now the second-largest alternative finance market in the Asia Pacific, with a value of over US$600 million.
“At the same time, we saw eight of our companies make the list of the world’s top 100 fintech innovators. And, over the last three years, the number of fintech start-ups — which are, overwhelmingly, small businesses — has boomed from [fewer] than 100 to almost 600.
“They’re exciting numbers. And what makes them more exiting is the diversity behind them.”
Mr McCormack continued: “Fintech doesn’t just take in credit, payments and digital currencies — it also involves regtech (regulatory technology), data and analytics, and personal finance management.
“Its reach — and its potential — is enormous. And that’s why the Coalition Government is very much on the bandwagon.”
The minister highlighted that fintech was one of the Treasurer’s “pet issues” and that “government is continuing to make strides with its fintech agenda”, such as through the regulatory sandbox. He revealed that government was “planning to take it further by legislating to allow more businesses to test a wider range of financial and credit services without a licence”. However, details of what this entails were not revealed.
[Related: Minister for Small Business commends brokers for financing SMEs]
