26 April 2017

Address to the Mortgage and Finance Association of Australia Breakfast Event, Sofitel Hotel, Sydney


Check against delivery

Thanks Cynthia and hello, everyone. It’s great to see so many of you here this morning.

The mortgage broking industry is, a very important one and the Government values the role it plays enabling people to attain their dreams – either through purchasing a home or pursuing a small business – in communities across the country 

We know the vital service it provides to consumers across Australia — especially in regional areas — and the contribution it makes to our economy.

Right now, there are more than 17,000 mortgage brokers in Australia. 

Those of you sitting before me make up a handful of them. And, together, you are providing competition, choice, convenience and — most importantly — expertise.

You’re assisting not just with home-loan mortgages, but financing for many small businesses. And this is as many bank branches reduce their retail footprint, making brokers the only source of financial services for many Australians.  

A growing industry

It’s for all of these reasons that the industry’s growing, and growing strongly.

In the past year it has expanded by four per cent, and brokers now lend more than half of all home loans.  

And growth is exactly what this Government likes to see.

Every new small business, every person who uses a loan to pursue their dream, is helping to create jobs.

Every one of them is helping our economy grow and making the most of the opportunities available in Australia.

Jobs aren’t created with red tape, or instruction.

It is small business – not Government – which creates jobs.

Jobs and growth are the byproduct of hard-working, enterprising people — especially those in small business — who stick their necks out to chase their dreams.

Setting the scene

In other words, jobs are created by people just like you here today.

You may be working with small businesses. But many of you are small businesses, too.

You face the same challenges; the same pressures. It’s not an easy job. Rewarding, yes, but not easy. 

The Government understands this. And much of what we’re doing for small business — our plan — will benefit you.

We’re creating the framework. We’re getting the conditions right. And we’re getting out of the way as much as possible, because we know — we’ve always known — that governments simply have no business in business. 

That’s your job.

Company tax

And it starts with the Government’s plan for company tax.

We’re living in a hyper-competitive world. Every country wants a bigger slice of the investor pie. And Australia has to compete.

That’s why the Government has a 10-year plan to reduce company tax to 25 per cent.

And we took a giant step forward when we secured the first part of the plan: a reduction in the tax rate for small and medium businesses to 27.5 per cent, the lowest it’s been for 50 years.

What’s more, we’ve expanded what it means to be a small business to include those with annual turnover less than $10 million.

We know small business works hard and creates jobs. That’s why we back them with a tax cut.

Thanks to our changes, tens of thousands more businesses — including many brokering businesses — will be able to take advantage of other tax benefits, such as the instant asset write-off.

So, in short, under this Government, more businesses are being rewarded for their hard work — for your hard work.

And I know that reward won’t be squandered.

It’ll be used to re-invest in your business. Because that’s what happens — I know, I ran my small business for eight years. 

Every bit extra goes towards giving another Australian a job; to growing the business’s operations so it’s better placed for the future.

Red tape and regulation

So that’s what the Government is doing on the tax front. And the other thing I want to highlight is our approach to red tape and regulation. 

Now, since becoming Small Business Minister, I’ve been on a roadshow. I’ve travelled to cities and towns around the country to hear directly from small business owners.

And, you know, it doesn’t matter whether I’m in Wauchope on the Mid-North Coast, where I was last week, or Wodonga in Victoria, as I was a few weeks before. I always hear the same thing.

“You’ve got to do more about red tape.”

I hear it often.

Now, regulation does serve a purpose. And if it’s done properly, it can make things easier — and better.

But in too many cases, it’s a knee-jerk reaction. It becomes unnecessary red tape, and it strangles the enterprising spirit we should be encouraging.

So the Government is doing something about it.

We’ve been cutting red tape wherever we can — in fact, more than $5.8 billion worth since 2013 — and simplifying paperwork, too.

For example, we’re making Business Activity Statement — or BAS — reporting easier, as it should be. 

So as of 1 July this year, small businesses will only need to report GST information on their BAS for GST on sales, on purchases and total sales.

Mortgage broker remuneration

Now, before I finish I also wanted to mention ASIC’s recent review of mortgage broker remuneration.

This was finalised last month, and what it found — as some of you know — was that the current ownership and remunerations structures could create conflicts of interests, leading to poor outcomes for consumers.

Now,  the review did make a number of recommendations for the industry — from improving the standard commission model to moving away from soft-dollar benefits.

That said, however, it didn’t recommend Government action. Instead, the industry is being encouraged to provide feedback on implementing the proposals.

I agree with that approach. As I said at the beginning, the Government values this industry highly. And I was particularly encouraged by how the industry — including the MFAA — engaged with the review process.

I also know the industry understands more transparency and better outcomes for consumers will make the industry more sustainable. 

Concluding remarks

And that, ultimately, is the best outcome for everyone.

That’s how this industry will continue to grow — which is what the Government wants, what those of you here want, and what the customers you help want as well.

So let me finish by thanking the MFAA for inviting me this morning, and each of you for the work you continue to do as small businesses, for small businesses.

Thank you.