Labor's Royal Commission Backflip
And the 2019 award for industry lobby group of the year goes to … the Mortgage and Finance Association of Australia, for its compelling portrayal of the absurd argument that the services of mortgage brokers are essential to Aussies families, but that no one would be willing to pay for them, if asked.
The MFAA’s lobbying strike against Hayne’s recommendation that broker commissions be abolished – and replaced by a conflict-free user-pays pay model – was swift, and highly effective.
The government started softening its rhetoric even before the final report was released, repeating the industry talking points of negative “competition” impacts if broker commissions were reformed.
Opposition Treasury spokesman Chris Bowen, however, vowed he’d need a "very, very, very good reason" to reject any of Hayne’s findings. But last Friday, Bowen announced Labor’s spectacular backflip.
Labor will allow mortgage brokers to continue being paid by banks if it wins government, abandoning its previous "in principle" support for the royal commission's call that consumers should pay brokers an upfront fee.
Shadow treasurer Chris Bowen on Friday said Labor's position was that upfront commissions, which are paid by banks to brokers for arranging loans.
Labor would also require that commissions are paid only on the amount of money drawn down in a loan - a change many banks have already made.
The policy is a stark change from Labor's initial "in principle" support for the royal commission's recommendation that all commissions be phased out and replaced with a fee paid by consumers.