After a highly politicised start to the year for brokers - during which industry leaders regularly engaged politicians and regulators at the highest levels - the federal election is finally just days away.
In preparation for Saturday, Australian Broker has compiled a list of the most industry-relevant campaign promises and party stances.
Property owners and investors
If the liberal government is re-elected, the housing market will likely see an uptick as consumers draw confidence from the status quo being maintained. The rate of property price decline has been slowing, and the Housing Industry Association (HIA) has reported a significant increase in new home sales, with both trends estimated to hold into the coming months.
If Labor wins, the party plans to unroll two major tax policies regarding property investment: the removal of negative gearing for people who buy existing properties, as well as the lowering of the capital gains discount. Both changes will apply to properties purchased after January 1 2020, which may result in a short-term spike in the market as investors rush to get grandfathered into the old policies in the latter half of 2019, with a likely drop-off predicted for early 2020.
First home buyers (FHBs)
The Coalition and Labor have now both committed to the $500m scheme which allows eligible FHBs to buy with only a 5% deposit rather than the standard 20%. The program will be available to FHBs with an income of up to $125,000 or couples with a joint income of up to $200,000, and will kick in from January 2020, but will only be made available to 10,000 borrowers.
The scheme has been welcomed by the Customer Owned Banking Association, as the policy favours applicants who borrow from smaller banks or non-bank lenders. The FBAA has cautiously voiced support, but clarified more information is needed to know the proposition’s true value. While some market commentators have expressed concern that the policy may lead to an environment of negative equity, others say the risk is minimised by the 10,000-buyer cap, just 10% of recent FHBs.
If the liberal government is re-elected, Morrison has promised to cut taxes from 30% to 27.5% for small businesses earning less than $50m, with an assurance it will be further lowered to 25%, although no timeline has been provided for the additional drop. The party plans to extend instant asset write-offs to $30,000, with additional promises to help cash flow and provide better access to finance. Morrison has also pledged to create 250,000 new small and family businesses over the next five years.
If Labor wins, Shorten has promised to cut taxes from 30% to 25% for small businesses by 2022. The party has also discussed tax cuts for assets, as well as an increased threshold for write-offs. Additionally, the party plans to establish a new government position focused on ensuring the voices of small businesses are heard.
Personal tax cuts
Both parties have promised a tax refund of up to $1,080 a year to Australians earning between $50,000 and around $100,000 annually.
Labor has separated itself from the Coalition government by promising a larger cut for those earning less than $45,000 and by planning to increase the top rate of tax by 2% for those earning more than $180,000.
With either government, the personal tax cuts will infuse money back into Australian households and could prove crucial to stimulating the economy on a larger scale, which may have implications on future RBA cash rate decisions.
Royal commission recommendations
The Morrison government has decided not to prohibit trails as per Commissioner Hayne’s counsel, with plans to revisit the topic in three years. Additionally, the party has made clear its intentions to remain in close communication with industry leaders to work towards maintaining a healthy environment of competition and protecting consumer outcomes.
While Labor has pulled back from its initial support of the suggested customer-pays remuneration model, the party plans to institute the remaining 75 of the 76 recommendations, both prohibiting trail commissions and introducing a fee capped at 1.1% of the value of a loan.