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Federal Budget 2021 – the industry reacts

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    Members of the financial services industry have largely welcomed the measures introduced by the Government in last night’s Federal Budget announcement while some have voiced their concerns.

    Loan Market

    Aggregator Loan Market said housing incentives for first time buyers and single parents, along with digital transformation initiatives unveiled in last night’s Federal Budget, were a boost for brokers and their customers.

    “The Government’s move to allow single parents to purchase with a deposit to 2% through the New Home Guarantee will help single mums and dads break the rental cycle and secure a future for their families,” said executive director Andrea McNaughton. “At a time when interest rates are at their lowest-ever point, I’m sure the scheme will be well subscribed.

    “But brokers need to be upfront with consumers in educating them on the realities of the scheme. There are only 2,500 First Home Guarantees made available every year for the next four years, so it will be very competitive.

    “Single parents need to understand that lenders will still heavily scrutinise their capacity to service a loan, especially if they have multiple dependants. Having a 2% deposit in the bank, alone, won’t be enough.”

    ScotPac

    ScotPac CEO Jon Sutton said this was a budget which should create an environment that helps SMEs continue to rebound.

    “There are positive initiatives to support the small business sector, and the focus on boosting consumer confidence should also help businesses,” Sutton said. “This is a small business-friendly budget that should give SMEs the confidence to invest in their own growth, as the economic recovery gathers momentum.

    “What this means is it’s time for SMEs to really think about their business plans, about restructuring and about how they’ll fund their continued recovery.

    “It is crucial that business owners have the confidence to grow. Until they are comfortable to invest in their own growth, it will remain difficult for the Australian economy to take off.

    “I’m hopeful that this small business-friendly 2021 Federal Budget will give business owners the confidence to act and provide the impetus for a small business-led national recovery.”

    CreditorWatch

    CreditorWatch said the Federal Government should be congratulated for the 2021/2022 Federal Budget, which will help cushion the effect of the end of the JobKeeper wage subsidy on the economy.

    “The national accounts are in good shape, given the events of the last year. The measures outlined in the 2021 federal budget will help support businesses to pay their bills, which is essential to keep the economy moving,” said CreditorWatch CEO Patrick Coghlan. “It’s especially pleasing to see the federal government allocate funding to e-invoicing, which will help speed up payment times across every industry.”

    “The Federal Government’s initiatives to drive growth are entirely appropriate given CreditorWatch’s data shows while the economy continues to tick along, the end of JobKeeper is affecting businesses. Although we won’t get a true reading of where the economy is at until later this year, when the end of stimulus measures truly becomes apparent,” said Chief Economist Harley Dale.

    The Actuaries Institute

    The Actuaries Institute commended the Government on the measures to improve flexibility and equity within the superannuation system, particularly the removal of the $450 per month threshold for employer payment of the Superannuation Guarantee, and the increase in the First Home Super Saver to $50,000.

    It also welcomed the increase in the Pension Loans Scheme to provide more Australians with flexibility for funding their retirement.

    However, it maintained that some big issues had not been addressed, explaining the Government had not leveraged the Retirement Income Review to make more impactful changes to the retirement incomes system, such as measures to help renters in retirement, in particular some of the most at risk of poverty in retirement – single female renters.

    “The system also still lacks an overall objective for superannuation and its role in supporting retirement incomes,” said Actuaries Institute president Jefferson Gibbs. “The Institute urges the Government to provide clarity on the purpose of superannuation, to enable more substantive reforms to be sensibly made to improve the system,” he said.

    Kate McIntyreKate McIntyre is an online writer for Mortgage Professional Australia. She has a wealth of experience as a storyteller and journalist for a range of leading media outlets, particularly in real estate, property investing and finance. She loves uncovering the heart behind every story and aims to inspire others through the artful simplicity of well-written words.
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