06/02/2025
The Mortgage & Finance Association of Australia (MFAA) has outlined 16 recommendations for the upcoming 2025–26 federal budget, focusing on home lending, financial regulation, cybersecurity, and sustainability initiatives. These proposals, crafted with input from the association’s broker and aggregator members, reflect the essential role brokers play in promoting competition and choice within the lending market.
With the federal budget set for 25 March 2025, the MFAA’s suggestions aim to support the Albanese government in driving economic recovery while addressing pressing challenges, such as rising cost-of-living pressures and limited housing supply. The MFAA’s recommendations also consider the current economic strain faced by many Australians, particularly with rising interest rates.
A key proposal is to review prudential regulation settings, including the serviceability buffer, which brokers have flagged as a significant barrier to refinancing. The MFAA advocates for more flexible regulations to ease the path for new borrowers and those seeking to refinance.
Additionally, the MFAA urges the government to reassess the Compensation Scheme of Last Resort (CSLR) levies, particularly after recent hikes that will see them rise to $77.97 million across all subsectors. The association stresses that small businesses, especially those with minimal claims, should not be disproportionately impacted by these increases.
The MFAA’s recommendations are grouped into four key areas:
- Competition in the Home Lending Sector:
- Simplify government-backed homebuyer schemes and collaborate with mortgage brokers to promote them.
- Review APRA’s prudential settings, particularly the serviceability buffer.
- Create a faster, smoother process for home loan discharges.
- Improve the Consumer Data Right.
- Encourage first-time homebuyers to consult a mortgage broker.
- Cybersecurity and Digital Transition:
- Support small businesses by investing in the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) and other business organisations.
- Expand the use of standardised Digital ID.
- Financial Regulation:
- Ensure consistency in state and territory payroll tax laws.
- Adjust the Regulatory Implementation Grid (RIG) to reflect privacy changes, and establish a timeline for eliminating small business exemptions from the Privacy Act.
- Align CSLR levies with actual needs.
- Make the instant asset write-off scheme permanent.
- Update credit licensing regulatory guides to include the Diploma in Finance and Mortgage Broking as the minimum educational requirement.
- Strengthen Financial Services Royal Commission Legislation, including expanding the reportable situations regime.
- Environmental and Social Impact Initiatives:
- Invest in small business Environmental, Social, and Governance (ESG) education.
- Support the decarbonisation of residential properties through brokers.
- Continue funding initiatives like the National Debt Helpline to improve financial literacy.
Despite the 2025 federal election being on the horizon, the MFAA emphasises that the budget should remain focused on helping Australian borrowers, both consumers and small businesses, navigate the current economic climate. Key priorities should include enhancing competition in the home loan sector, ensuring access to credit, and strengthening cybersecurity, while also supporting sustainability and the digital economy transition.
These recommendations underscore the MFAA’s dedication to supporting Australians’ financial journeys and ensuring a thriving broking industry. The MFAA’s input offers practical measures to tackle both immediate and long-term economic and regulatory challenges as the government prepares for the 2025–2026 federal budget.