PM in massive mortgage backflip
PRIME Minister Scott Morrison has defended allowing mortgage brokers to continue charging ongoing fees against the recommendation of the banking royal commission.
The coalition backflipped on abolishing trailing commissions, instead opting to get the competition watchdog and financial regulators to review the issue in three years.
Mr Morrison said the decision was about "basic fairness" and followed consultation with mortgage brokers.
"We're backing the mortgage brokers, Labor's backing the big banks," he told reporters in Melbourne on Thursday.
Abolishing trailing commissions paid to mortgage broker during the term of a property loan was a recommendation of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Lobby groups for the sector claimed this would have seriously damaged 20,000 small business mortgage brokers across the country.
Labor has chastised the government for reversing its position, accusing it of lacking the mettle to deal with the issue.
The opposition has committed to abolishing trail commissions and will cap mortgage broker fees at 1.1 per cent of a property loan if it wins the federal election due in May.
Mr Morrison said brokers helped customers to get the best deal and ensured they weren't left "naked" to the banks.
"We want to see the mortgage broking industry continue to thrive," he said. "The best thing for us to do was not to leave customers exposed by ensuring mortgage brokers were weaker." He said under the coalition's plan, brokers will have the status quo on commissions so they could continue to run their businesses.