Finance & Investment

Mortgagees lose borrowing capacity by 30%

By Leon Gettler, Talking Business >>

TIM GASPAR, the CEO of Hatch Financial Services. has noticed a big change in the mortgage market.

Since COVID in 2020, the borrowing capacity of borrowers has declined by 30-35 percent (%).

“So if you’re thinking of borrowing $1 million, that’s $300,000 less that they can borrow now,” Mr Gaspar told Talking Business.

“Therefore, for someone trying to buy their first home, or someone looking to move to their next home, their ability to execute that plan is now greatly reduced because they can’t borrow enough.”

Fundamentally, he said, it has been caused by the rise in interest rates.

“At the start of Covid, the RBA cash rate was 0.35% and it dropped down to 0.1% and now we are up to 4.35%,” Mr Gaspar said.

He said while economists were talking last Christmas about three rate cuts in 2024, now they are talking about a rate cut later this year – while in the US, the talk about rate cuts has been pushed further back. And now, with the latest inflation figures in Australia, some are saying there won’t be a rate cut until 2025. 

“It leaves the market in a position where it’s really hard for people to get in or make their next move, so we’re seeing less transactions than we might otherwise,” Mr Gaspar said.

”The other thing we’re noticing is it’s really hard for clients to refinance to secure lower rates because if they set their loan up two years ago, maybe on today’s rates, they can’t afford that same loan in the eyes of the banks.” 

Backing up investment lending

Mr Gaspar, who has been a mortgage broker for 15 years, said it was having a similar impact on investment lending.

He said a number of banks now have an alternate refinance policy which, rather than apply a 3% buffer to current rates to assess affordability, they will only apply a 1% buffer. The conditions for using that policy are dollar-for-dollar refinance and the borrower can demonstrate they are better off by moving to a lower rate.

Mr Gaspar said there had also been an increase in part time brokers.

“Those that are part time appear to be parents with young families who are working and balancing families or who are accountants and financial planners who are doing a bit of mortgage broking,” he said.

“It must be really tough to be an expert both as a financial planner and an accountant as well as keeping up with what you need to know as a mortgage broker, so hats off to people who think they can do it.

“I think there is enough to know and keep across as a mortgage broker for that to be a full-time endeavour.”

Mr Gaspar said mortgage brokers were now starting to look at how they can use artificial intelligence to deliver a better service, whether that involves preparing applications to send to banks or creating marketing content to share with customers.

However, he had some reservations about it.

“Like every industry, AI will have a big say in broking over the next decade – but there is a really strong place for individuals and for personal service,” Mr Gaspar said.


Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at


AI’s impact on Australian financial sector grows

By Leon Gettler, Talking Business

GENERATIVE artificial intelligence is starting to have a big impact on the financial services industry and it’s likely to become even more prevalent.

Nick Smith, vice president and general manager for the Asia Pacific region at Smart Communications, said AI was ‘almost made for’ banks, insurance companies, wealth management firms and superannuation providers.

First, it could save them on costs by automating processes. Then it would also change the way their employees talked to customers.

“All of them share the challenge of engaging with their customers, educating their customers and using AI in a way that creates value,” Mr Smith told Talking Business.

“If you look at superannuation, engagement with the younger customer is difficult so I can see how they can simplify their language and engage with their customers over the life-cycle with AI, because they can do more frequent communications on broader topics much faster. 

“With the banking sector, I can see (AI address) a lot of the processes that are frustratingly managed through a call centre with customers. And that will actually free up the staff to have those valuable conversations with customers.

“In insurance, you can see how AI can automate a claims process and make it faster, better, quicker.

“So there are lots of opportunities and we’ll see how it goes.”

AI will not cost jobs

Mr Smith said AI would not cost jobs in the financial sector as a lot of the processes need humans to vet them.

“Fundamentally in the financial sector broadly, there is this concept of trust.,” he said.

“We as humans are very quick to spot insincerity and lack of authenticity.

“A level of automated processes will frustrate us. We want to speak to a human so I think, as AI evolves … when we as humans want to have a conversation about something more challenging.

“I think AI will free up staff to have those more valuable conversations and provide a level of differentiated service that we seem to have lost over the last few years with automated calling into the call centre where you have to wait for 15 minutes and go through seven buttons before you get to somebody,” Mr Smith said.

AI could help improve service quality

Mr Smith said AI could also provide a better quality of service.

He said an AI tool needed humans to manage it and create a more personalised communication system.

“But we’ve also seen, in the early days of AI, it’s not very good in dealing with bias and complexity and there are risks in it as well.

“Certainly, we can see the generation of prose being very valuable but we also feel you have to have humans involved to validate and check because ultimately, in highly regulated industries, you don’t want to upset the regulators or your customers because both would have expensive consequences.”

Mr Smith said most banks, insurers and superannuation specialists have people on board managing AI but there were risks.

“The fundamental risk with AI is we might have organisations pivot too quickly and rely too heavily on the tools and that runs the risk around more complex products and calculations producing the wrong information,” Mr Smith said.

“So again, that human intervention before the information goes out is critical.”


Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at


F&B, craft brewing, consumer goods turn to Aussie crowd funding

By Leon Gettler, Talking Business

WHAT ARE the big industries now getting crowd-sourced funding? Food and beverage, craft brewing and consumer packaged goods.

That’s the result of a survey done by Birchal, an Australian equity crowdfunding platform that connects investors with brands.

“It shows stability and resilience in fund raising, particularly for early stage businesses,” Birchal co-founder and CEO, Matt Vitale told Talking Business.

He said Birchal had shown that crowd sourced funding was a reliable way for early stage businesses to raise capital and build communities.

Mr Vitale said it was also good for start-ups as well as early-stage businesses and small businesses. 

“We have a vision that all offers should be crowd-sourced funding offers,” he said,

“This is a very practical way that entrepreneurialism can be supported and fuelled in Australia.”

This was particularly at a time when there wasn’t much venture capital for early stage businesses in Australia, apart from those in mining, and the banks tightening up on lending.

He said early-stage businesses in Australia struggled to raise capital. Instead they were doing what they had to do by maxing out credit cards and re-mortgaging houses.

“The revelation has been that early-stage businesses can raise equity capital, something that historically has been only the domain of large typically listed businesses,” Mr Vitale said.

Mr Vitale said Australians tended to compare their equity market to the United States, which was the largest pool of venture capital on the planet where the money, and there was plenty of it, had to be put to work.

“In Australia, we don’t have that mindset, we’re not set up in that way but equity crowd funding is a great way to unlock a greater investment universe and I think increasingly, people who are investing in other asset classes, they don’t know how to get exposure to venture type investments,” he said.

“What we’re able to do is enable companies to open their opportunities to a national audience of investors and find their crowd, find their community to support them.”

He said investors in food and beverage and craft brewing companies understood those sorts of industries and could relate to those sorts of businesses.

“They’re often businesses that people want to be associated with,” Mr Vitale said. “What people have found is they can source their capital from their customers. They already know about your product, they understand your business.

“For the businesses, it’s not just the capital. They’re building a connection with often their most passionate customers by involving them in the business.”

Mr Vitale said Birchal’s goal was to expand the footprint for crowd-sourced funding.

Health care is now a growing area for crowd sourced funding.

Mr Vitale said last year was a big year for investors focused on medicinal cannabis.

“We’ve noticed there a lot of investors who are incredibly passionate about medicinal cannabis and other alternative medicines,” he said.

“I think this year we will start to see that expand to businesses that are in the psychedelics space.”


Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at


Chartered Accountants call for Budget focus on ‘substantive’ tax reform

CHARTERED Accountants Australia and New Zealand (CA ANZ) has advised the Federal Treasurer that next week’s Federal Budget should include substantive tax reform, along with a roadmap and timeline to achieve it. 

“Our pre budget submission made it clear that it was time for a wider discussion about the tax system,” CA ANZ group executive of advocacy and international development, Simon Grant said.

“Policymakers need to keep in mind the competitiveness of our personal tax system, especially considering the global talent shortage.” 

CA ANZ will have its tax and superannuation experts in the room during the Budget Lock-up, providing expert analysis and what it means for the profession, their clients, and the broader community.

The CA ANZ pre-budget submission also outlined productivity improvements, red tape reduction and small business support measures the Federal Government should consider. 

“We appreciate the economic headwinds the country is facing, so that’s why we shouldn’t be looking at sugar hits but rather substantive and sustainable reform,” Mr Grant said.

“We need to make it easier for businesses to be in business – that includes having a skilled and educated workforce, so we will be looking for the Budget to extend the 120 percent training boost.

“Any improvements to boost productivity will be warmly received – a boost in productivity leads to a boost in income which will be welcome during the current cost of living challenges,” Mr Grant said.

The CA ANZ pre–Budget submission also called on the Federal Government to: 

  • Support small business by keeping the instant asset write off scheme. 
  • Invest in building the human capital skills necessary to support the implementation of sustainability disclosure and assurance standards and the business transition. 
  • Build and implement a modern Company Register which links a Director’s ID to their relevant companies. 
  • Plan for the ageing population by removing the legal complexities and inconsistencies in the superannuation, taxation, age pension and aged care environments. 
  • Replacing the annual superannuation caps with lifetime caps. 
  • Improve productivity through education by targeting investments in digital, AI, sustainability, accounting, and financial capability. 
  • Improve financial literacy through the introduction of a national senior secondary accounting curriculum.


Pfisterer says Zeller and other fintechs challenge big banks to ‘lift their game’

By Leon Gettler, Talking Business >>

THE number of Australian fintechs is growing strongly.

But Ben Pfisterer, the CEO of business payment service Zeller, says more competition is needed in the business-to-business (B2B) banking industry. 

“We have got an unprecedented time with technological change at the moment and that’s just not coming through,” Mr Pfisterer told Talking Business.

“You’ve only got to look at the majority of terminals that sit on business counter tops and they are old, traditional, small screen offerings – basically a number being routed around the eco-system. They don’t do anything other than that primary function.

“We believe a lot can be done with that payment experience.”

Mr Pfisterer has a lot of experience in this space. He set up Square (now Block), the payments company, in Australia, and ran that for six years.

Zeller creates Aussie niche

He said Zeller was creating a niche in the market.

“If you look at business banking, it’s obviously tightly held by four pretty big incumbent banks and if you look at the solutions they provide, they’re pretty generic, they haven’t evolved and they still have problems,” he said.

Zeller aims to be a one-stop shop for businesses’ banking needs, according to Mr Pfisterer.

Zeller was started in 2020, and when it launched in 2021 it offered debit cards, business banking accounts and payment terminals. Now Zeller plans to also offer online payment acceptance, credit cards and expense management services.

Over time, Zeller is looking to expand into lending and become a fully licensed bank under the Australian Prudential Regulation Authority (APRA).

Mr Pfisterer said businesses needed to go through a whole bunch of processes for payment, such as setting up bank accounts and applying for a Visa or Master Card service, to get going.

“That’s a whole set of understanding rules, fees, terms and conditions, and contracts,” he said.

“That shouldn’t be the case. Every business needs these products and we should be able to offer them vastly more simply.

“We’re not talking about lending money here. There shouldn’t be this rigmarole and protracted process happening.

“We thought we could do it better. We could truncate it.

“If you look at the four majors, their solutions are incredibly similar and they haven’t changed much.”

“We believe we can do a whole lot better and hopefully we’re proving that,” Mr Pfisterer said.

Finance competition is lacking

Mr Pfisterer said with the four major banks, there was not enough competition in finance for the B2B industry.

“Whether that’s competition from lack of product or prices, it’s simply not enough,” Mr Pfisterer said.

“We hear it consistently. They don’t get the service they need. They don’t get the innovation.”

He said the major banks were not working in the area of payment services.

“What should be a simple process of accepting payments and holding money … the banks have done a goof job. Don’t get me wrong but ultimately, they’re not changing fast enough to keep up and businesses need more in today’s environment.

“There’s a whole lot of sweeping change, whether it’s Buy Now, Pay Later or accounting software,” Mr Pfisterer  said.

“All these things need to be better integrated and merged into these products. They don’t need that confusion in banking products.”


Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at



Banking Code Compliance Committee urges ‘early collaboration’ to assist small businesses in financial difficulty

THE Banking Code Compliance Committee’s (BCCC) Small Business and Agribusiness Workshop report, published this week, has highlighted the importance of early engagement with small businesses and agribusiness customers experiencing financial difficulty.

The report outlines the issues, discussions, and findings of a workshop that the BCCC facilitated in March 2023 with banks, consumer and government organisations, and its Small Business and Agribusiness Advisory Panel. 

The workshop looked at barriers to assistance for small businesses and agribusiness customers when they begin to experience financial difficulty, identified possible solutions, and shared examples of good practices across the industry. 

BCCC chair Ian Govey AM – whose career has included a stint as Australian Government Solicitor (AGS) and AGS chief executive between 2010 and 2016, and Deputy Secretary of the Attorney-General’s Department from 2000 to 2010 – noted the challenging conditions small businesses currently face and emphasised the importance of collaborating with a range of stakeholders. His previous work in the Attorney-General’s Department and The Treasury focussed significantly on commercial law reform, including the Corporations Act 2001.

“Small businesses and agribusiness customers are under significant pressure in the climate of rising interest rates and inflation. We wanted to bring together a wide range of stakeholders to explore the issues and look at ways we can improve outcomes for these customers,” Mr Govey said.  

“We know customers often reach out too late for assistance. This may be because they do not know what support is available, they do not know how to access support, or even because of a perceived stigma attached to reaching out for help.  

“But ultimately, these customers are not reaching out when they really need to, and it is something we want to help address.” 

Mr Govey reflected on the success of the workshop and emphasised the value in collaboration to find solutions.  

“Seeing industry come together to explore this issue was really encouraging,” he said.  

“But it is just a first step, and we need to continue to build on the ideas and programs that support these customers.” 

The BCCC’s report shared examples of good approaches to customer support, including processes and systems for data analysis, proactive outreach, and education.  

The report highlighted the success story of the Thriving Communities Partnership’s One Stop One Story Hub, which allows banks and other services to proactively connect when a customer is experiencing financial difficulties or other vulnerabilities.  

“This initiative, and the positive impact it has made, demonstrates what is possible when the industry comes together to support the most vulnerable,” Mr Govey said. 

“Financial difficulty is a serious problem for which effective solutions can only come from effective collaboration among the many stakeholders in the industry.”

BCCC is an independent body established to monitor and enforce compliance with the Banking Code of Practice. The committee’s role is to help maintain high industry standards and protect the interests of consumers in the Australian banking sector. 

The BCCC is headed by three representatives: chair Ian Govey, Anne O’Donnell for the banking sector, and consumer advocate Cat Newman. BCCC’s day-to-day work is supported by a secretariat at the Australian Financial Complaints Authority (AFCA).

The full report is on the BCCC’s website.


ATO highlights EOFY changes for small business

THE Australian Taxation Office (ATO) is reminding small businesses about three key things to be aware of ahead of end-of-financial-year duties.

First, the new small business boost is now available; second temporary full expensing ends on June 30, 2023; and there are some deduction rate changes for running a business from home and car expense rates have changed.

“With only a few days left in the financial year, now is the time to talk to your tax professional if you think these things may be relevant for your business,” ATO Assistant Commissioner Emma Tobias said. 

Small business boosts now available

Boosts are available for small businesses investing in digital operations, or skills and training – for example, new equipment like technology, cloud-computing, e-invoicing or cyber security.

“Small businesses will receive a bonus 20 percent tax deduction for eligible expenses in their tax return, so for every $100 spent, you’ll get a $120 tax deduction – but there are caps on the total amount that can be claimed,” Ms Tobias said.

“If you’re a small business who invested in technology or digital operations between 29 March 2022 and 30 June 2023, then this boost is for you.

“It’s important to remember, any item you purchase must be first used or installed ready for use by 30 June 2023 in order to be eligible,” Ms Tobias said.

Likewise, the small business skills and training boost allows businesses to claim an additional 20 percent tax deduction to train new and existing employees between March 29, 2022 and June 30, 2024.

The training must be through a registered external training provider in Australia.

TFE ends June 30

Temporary full expensing (TFE) ends on June 30, 2023. Small businesses can still claim an immediate deduction for the cost of eligible assets first used or installed ready for use by  June 30, 2023, in this year’s tax returns.

However, the end of TFE on June 30 means the cost of assets that are not already being used or installed ready to use by June 30, 2023, are not eligible for an immediate deduction under TFE in small business tax returns this year.

TFE supports small businesses making capital purchases by allowing an immediate deduction for assets, rather than claiming the depreciation over a number of years.

“Even if you’ve paid a deposit or received an invoice, the asset must be installed ready to use by 30 June 2023,” Ms Tobias said. “If the asset is not installed ready for use by the deadline, you may still be able to claim deductions under the general or simplified depreciation rules.”

Deduction rate changes

Both the ‘running a business from home’ deductions and car expense deductions have changed for this tax time.

The key changes a small business claiming car expenses needs to know is:

The new cents-per-kilometre rate is 78 cents for 2022-23, but remember to keep written evidence to show how you worked out the work-related kilometres. This is method is available to sole traders and partnerships.

The car limit has increased to $64,741 for the 2022-23 income year.

The working from home deduction methods have also changed for this year. Small businesses can choose one of two methods to claim working from home deductions: either the actual cost or fixed rate method. Only the fixed rate method is changing. However, your business structure can affect the method you can use and the expenses you can claim, especially if your business is a company or trust.

“If you are claiming car or working from home deductions, make sure to keep good records,” Ms Tobias said. “This will give you more flexibility to choose the approach that gives you the best deduction at tax time.”

Ms Tobias said the ATO recommends small businesses seek advice from a registered tax professional or read about the changes on the ATO website before making investment decisions.



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