Broker association raises ASIC funding concerns

by MPA* | 09 May 2016

Broker association raises ASIC funding concerns
The industry funding model for ASIC confirmed in the Budget this week “makes sense”, according to the Finance Brokers Association of Australia (FBAA), but the broker association is concerned how banks will pass on the cost of regulation.

As a part of the 2016 Federal Budget, the Government announced a $127 million package of reforms to strengthen ASIC. However, the costs of the reforms package will be recovered through a new industry funding model, to commence in the second half of 2017, replacing the current taxpayer funded model.

Switching to an industry funding model was something which was recommended by David Murray’s Financial System Inquiry (FSI) in 2014.

The FBAA’s Peter White agrees an industry funding model is a positive move for the Australian economy, he told MPA’s sister title Australian Broker.

“It is a good thing for the economy and how things impact taxpayers,” White said. “Historically it has been a taxpayer funding model so the new model will put less pressure on the taxpayer and allow taxpayer money to be used for other things.”

Stamp duty, not negative gearing holds housing affordability key
The Property Council of Australia is continuing to push back against proposals by the Labor Party to alter negative gearing and capital gains tax arrangements.

Following Federal Opposition leader Bill Shorten’s Budget reply speech, the PCA has doubled down on its stance that changes to negative gearing and CGT will not improve housing affordability.

“We refute the idea that placing $32 billion in additional taxes on property through changes to negative gearing and capital gains tax arrangements will lead to an improvement in housing affordability. It won’t,” PCA chief executive officer Ken Morrison said.

“Housing affordability is a huge issue in Australia. Housing affordability needs to change, but it won’t change if you prescribe the wrong solution,” Morrison said.

While it appears there is little chance of it ever being removed, Morrison also repeated calls for stamp duty to be addressed if policy makers are serious about addressing affordability.

“The way to tackle housing affordability is to deal with the weaknesses in supply and to undertake meaningful reform of state taxes,” he said.

“Stamp duty adds $35,000 to the cost of buying a typical home in Sydney and $32,000 to a similar home in Melbourne.

“Australia is crying out for government to deal with housing supply imbalances and to reform state property taxes. Stamp duty is an inefficient tax that slugs householders and is a drag on the economy.”

*MPA (Mortgage Professional Australia)