Associations join forces against payroll tax
Key industry associations have united to reinforce the consequences for homebuyers and small businesses should payroll tax be applied to mortgage and finance broker commissions.
Together with the Council of Small Business Organisations of Australia (COSBOA), the Mortgage & Finance Association of Australia (MFAA) and the Commercial & Asset Finance Brokers Association of Australia (CAFBA) recently met with the New South Wales Government to bring attention to the threat payroll tax poses to the viability of small broking businesses in the state.
In the joint meeting, the three associations spoke directly with the NSW Minister for Small Business, Steve Kamper MP and the NSW Minister for Finance, Courtney Houssos MP to reiterate the predicament faced by the mortgage and finance broking industry, a direct result of unclear payroll tax legislation.
COSBOA represents over 500,000 small businesses in New South Wales, and a further 1.1 million businesses nationally.
COSBOA CEO, Luke Achterstraat, explained that payroll tax is akin to a tax on jobs, and COSBOA has been calling for broad-based tax reform in Australia and the raising of payroll tax thresholds.
“The law as it stands is also ambiguous, which has led to many businesses being forced to take legal action – a costly exercise that would be unnecessary if the law provided the clarity it should,” he said.
According to MFAA CEO, Anja Pannek, when it comes to the mortgage and finance broking industry, this issue has potential to adversely impact first-homebuyers, those seeking finance to upsize property for their growing family, as well as small and medium businesses as they look to obtain the funds to grow and employ staff.
“Finance brokers – be they mortgage, commercial or asset based – are the critical enablers of enterprise and aspiration in New South Wales,” she said.
Indeed, the role of brokers extends beyond the transaction itself. Brokers provide expert guidance to borrowers, including first homebuyers, helping them with budgeting, navigating complex financial decisions, securing competitive interest rates, and managing refinancing options.
“This support is particularly vital in the context of 13 successive interest rate increases, mortgage stress and heightened cost of living pressures for NSW residents and business owners,” Ms Pannek said.
“Our request has been, and remains, for the NSW Government to provide legislated retrospective relief and a moratorium from the application of the Payroll Tax Act to allow the mortgage and finance broking industry time to meet its regulatory requirements, given the significant ambiguity that has and continues to exist.
“It’s essential that the homebuyers and homeowners of NSW can continue to benefit from the essential service brokers provide.”CAFBA CEO David Bushby agreed, stating that the potential impact of payroll tax on small broking businesses could lead to many closing at a time when small businesses across the board are facing cash flow and access to finance issues.
“The NSW Small Business Commissioner’s own research shows that as interest rates have gone up, small business confidence has gone down,” he said.
“These small businesses deserve the support finance brokers provide, and the choice of financing options that are only possible because of brokers.”
COSBOA, MFAA and CAFBA will continue to work with the NSW Government to find a pragmatic solution to this issue and update members of progress.
Taken from the Mortgage & Finance Association of Australia Media Release on October 8, 2024.
