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Jason Cunningham
Entrepreneur

Jason Cunningham is a finance whiz, speaker and media personality that can be heard on SEN1116 and The Living Room on Channel 10

Jason Cunningham
Entrepreneur

Jason Cunningham is a finance whiz, speaker and media personality that can be heard on SEN1116 and The Living Room on Channel 10

In October 2015 the Turnbull Government announced they would adopt all but one of the recommendations of the 2014 Financial System Inquiry, also known as the Murray Review, named after its chair, former CBA boss and current AMP chairman David Murray. Following industry analysis, what were the perceived implications for small businesses at the time?

The Federal Government’s decision to back the Murray Review – the biggest overhaul of Australia’s financial system since 1997 – impacted a range of areas including superannuation, credit card fees, cyber security and even crowdfunding regulations.

At the time, industry analysis revealed a number of significant considerations including the following:

Looking up from between skyscrapers

Banking regulation

The government supported APRA's moves to strengthen the banks’ position by building up their reserves to protect against future financial crises.

These, and other proposed changes to the financial system, aimed to make it easier for smaller institutions to compete with bigger lenders – with the bottom line being more funding opportunities for small business and hopefully more product innovation to make doing business easier.

Financial adviser professional standards

New laws to raise professional standards of financial advisers were proposed to come into effect by mid-2016, with a further review in 2019 to see if more changes were needed – something that’ll be welcomed by consumers and the financial planning industry alike.come 

The industry had been screaming out for more regulation to protect consumers and strengthen the quality of advice provided. There was also a sense that all advisers had been tarred by the actions of a small number of rotten apples.

Owning a business that provides quality financial advice, I know all too well the frustrations of the ethical and expert advisers that are committed to helping liberate the lifestyles of ordinary Australians by giving them a secure path to financial independence. It’s a travesty that many households were to miss out on the benefits of quality advice because they’ve been scared off by the scandals.

The report also recommended relaxing the product disclosure requirements, enabling providers to reduce the complexity of information provided and instead talk to consumers in plain English (meaning they’re more likely to read - and therefore understand – what is provided). A huge win for common sense – and for all concerned.

Credit cards

In great news for consumers (and of course the many business owners who rely heavily on plastic for cash flow), the government committed to phase in a ban on excessive card surcharging, and monitor developments to decide if further action is needed.

Crowdfunding

The government accepted the recommendation to consult with the community on crowd-sourced debt funding. This move acknowledged crowdfunding as a legitimate source of funding for small business owners – particularly start-ups. As crowdfunding can be easier to access than a traditional loan, the changes were designed to ensure businesses have a broader range of secure funding options to suit their needs.

Digital identity

The recommendations aimed at improving the convenience and security of online financial transactions proposed significant benefits to business owners (directly or indirectly). There was also the potential to reduce compliance requirements, and less red tape is always a good thing.

SMSF borrowing

The only recommendation the government did not adopt related to super fund borrowing. Self-managed super funds retained the ability to borrow funds to invest in assets such as property. 

Summary

The response to the Murray recommendations from experts and the Government was alike has been very positive overall. The adoption of most recommendations was poised to give small businesses even greater options in terms of sourcing funding, operating more efficiently developing a service and product strategy to meet the ever-evolving needs of today’s consumers – both now and into the future. 

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Originally published 29th December 2015. Updated 28 August 2019.

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