The Finance Brokers Association of Australia (FBAA) has welcomed the budget funding commitment enabling ASIC and APRA to respond appropriately to the recommendations of the royal commission.

FBAA managing director Peter White said it’s clear that a significant portion of the $404 million promised for ASIC over four years is for enforcement post the royal commission recommendations.

“Indications are little or none of this additional enforcement funding will be spent on actions against brokers, rather additional action to reign in the banks.”

Mr White cites an ASIC announcement late last year as evidence banks will be the focus. “The FBAA in December revealed that ASIC had reduced the cost to act as a credit representative for brokers from $104 to just $16.48 annually due to the decreased cost of enforcement. It is now indicatively being lowered again by ASIC going forward to $14.33.

“The total cost of legal enforcements against mortgage brokers has reduced to a third of the original cost in a little over 12 months, and now further again and that’s because brokers are doing the right thing by clients.”

However Mr White has strong reservations about the new task force to review brokers remuneration in three years.

“We will work with the new task force but only as it acts as a system of checks and balances and to ensure the model remains commercially sound and in the best interest of borrowers. After years of uncertainty we will not support a review which again puts in doubt the continuity of broker commissions and the ability of a broker to earn a reasonable income.”

He said the FBAA welcomes the move to provide the Australian Financial Complaints Authority with additional funding to assist those with historical eligible financial complaints. The number of financial complaints against brokers is minimal – approximately 0.5 per cent of the total – while complaints against banks have skyrocketed.

Overall, Mr White said he would have liked to see the budget provide more assistance for struggling homebuyers, particularly given the declining home values in some areas combined with persistent global uncertainty.

“The government, and all major political parties, must examine what they can do to stimulate the housing market, not suppress it and that includes any change to negative gearing and capital gains tax,” Mr White said.