They join forces in meeting with ministers, seeking relief
Mortgage and finance industry peak bodies, the MFAA and CAFBA, have teamed with the main organisation representing Australian small businesses to lobby the NSW government against the payroll tax on aggregators, seeking retrospective relief and a moratorium.
The Council of Small Business Organisations of Australia recently joined with MFAA and CAFBA in a meeting with NSW Minister for Small Business Steve Kamper and the NSW Minister for Finance Courtney Houssos MP to explain the consequences for homebuyers and small businesses should payroll tax be applied to mortgage and finance broker commissions.
COSBOA represents more than 500,000 small businesses in New South Wales, and a further 1.1 million businesses nationally.
Major aggregators LMG and Finsure are involved in separate court appeals against the imposition of retrospective payroll tax.
COSBOA CEO Luke Achterstraat (pictured above left), told the government ministers that the payroll tax was similar to a tax on jobs. 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,” Achterstraat said.
MFAA CEO Anja Pannek said when it came to the mortgage and finance broking industry, the payroll tax issue had potential to adversely impact first home buyers, those seeking finance to upsize property for their growing family, as well as small and medium businesses as they looked to obtain the finance 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,” Pannek (pictured above centre) said.
The role of brokers extends beyond the transaction itself, Pannek said.
Brokers provided 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,” 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 (pictured above right) agreed. He said that the potential effects of payroll tax on small broking businesses could lead to many closing at a time when small businesses across the board faced 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,” Bushby said. “These small businesses deserve the support finance brokers provide, and the choice of financing options that are only possible because of brokers.”
The leaders of COSBOA, MFAA and CAFBA said they would continue to work with the NSW government to find a pragmatic solution to this issue and update members on their progress.
Pannek, Bushby and FBAA managing director Peter White discussed the payroll tax issue at length during the recent National Finance Brokers Day 2024 event, and all were determined to keep fighting for a resolution.
