Profiles

The Budget and what it means for the mortgage industry

Maureen Jordan caught up with Peter White, CEO of the FBAA when he was in Sydney this week.

Peter, what was your reaction to the Budget?

At the end of the day, there is a large debt that needs to be repaid and an interest bill on this debt which is holding us back from progressing. So something has to be done as hard as it is. That said, there are some disappointing aspects to it - the co-payments for doctor visits and scripts isn't fair and there should have been a income cut-off so that if you fall under that cut-off point you don't have the co-payment, as it will be tough for some people. Also the fuel excise needs to go. There were then good things with money being invested into infrastructure, which creates employment and economic growth areas and the like. The unknown unfortunately also exists. There is much speculation that uni fees will go up - but that is speculation and pricing completion may mean this doesn't happen, yet to be seen. The other matter people need to absorb is the timeline on things, not everything happens tomorrow or forever. The income levy for those earning over $180k is only for three years and includes parliamentarians. Working to the age of 70 isn't until 2025 (and for tradespersons it doesn't mean swinging a hammer or climbing ladders at the age either. These people have enormous experience to bring to the market/employer as well)

What impact will it have on the economy?

I feel we may see a flattening until things settle down and people deal with the mixed understandings and emotions on this Budget.

What impact will it have on the mortgage/finance industry?

There are a few things that this will impact. People stalling their decisions whilst they come to grips with the Budget, but that too will pass as it has over the decades that I've been in this industry as a lender/credit assessor/mobile lender or broker. Also the fuel excise is negative for brokers (and of course generally) as we live in cars providing a service from home to home so the cost of business will rise, plus there may be an impact of hardship on some borrowers due to the same thing plus the impact of the medical co-payments etc. Longer term there is a positive flow from the infrastructure investment which will creat jobs and spending and borrowing.

What reaction have you been having from your members (i) about the budget (ii) about the economy?

A lot are unhappy about the Budget and for reasonable reasons, but we need to understand we need to clear the debt. It wasn't left there from the government before the last and if we don't get rid of it then it will be left for our kids to deal with and that's simply not a fair inheritance. On the economy - generally fairly positive and the our members have been reasonably busy, which is a healthy sign of the economy.

What does the next 12 months hold for the FBAA?

Very exciting times! Enhancements to our App we released last year, which will improve certain parts of the credit process, another HUGE conference on the Gold Coast at SeaWorld  (our home for conferences) 14 November, and an aggressive marketing push on our Career Path Apprenticeship Initiative. (More details to come!)

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