More than half of Aussie men report experiencing sexual difficulties

Many men were concerned about climaxing too quickly or lacking interest in sex.Krista MangulsoneOne in two Australian men aged 18 to 55 have experienced sexual difficulty in the past 12 months, accord...

Jennifer Power, Senior Research Fellow at the Australian Research Centre in Sex, Health and Society, La Trobe University - avatar Jennifer Power, Senior Research Fellow at the Australian Research Centre in Sex, Health and Society, La Trobe University

Sanders, Harris, Biden... can anyone beat Donald Trump to become the next US president?

No sooner had the US midterm elections for Congress concluded than jockeying began for the presidential elections in 2020. Barring either impeachment, which seems unlikely, or a health crisis, Donald ...

Dennis Altman, Professorial Fellow in Human Security, La Trobe University - avatar Dennis Altman, Professorial Fellow in Human Security, La Trobe University

As many Muslims return to mosques today, they will need ongoing support

A worshipper lights candles at a makeshift memorial at the Al Noor mosque in Christchurch.AAP/Mick Tsikas, CC BY-SAToday, many Muslims in New Zealand will be returning for Friday prayers. Some might f...

Fatima Junaid, Lecturer, Massey University - avatar Fatima Junaid, Lecturer, Massey University

'It's real to them, so adults should listen': what children want you to know to help them feel safe

Children and young people told us they were often overwhelmed by the risks that surrounded them.from shutterstock.comIn recent months, we have been confronted by events that make the world seem unsafe...

Tim Moore, Associate Professor and  Deputy Director, Australian Centre for Child Protection, University of South Australia - avatar Tim Moore, Associate Professor and Deputy Director, Australian Centre for Child Protection, University of South Australia

A brief history of science writing shows the rise of the female voice

Women played a role as both readers and authors in the history of science writing.Shutterstock/Africa StudioThree centuries ago, when modern science was in its infancy, the gender disparity in educati...

Robyn Arianrhod, Adjunct Associate , School of Mathematical Sciences, Monash University - avatar Robyn Arianrhod, Adjunct Associate , School of Mathematical Sciences, Monash University

Cannibalism helps fire ants invade new territory

Fire ant stings can be deadly to people who have an allergic reaction to their venom.Forest and Kim Starr/Flickr, CC BY-SATropical fire ants (Solenopsis geminata), originally from central and South Am...

Pauline Lenancker, PhD student in biology and ecology, James Cook University - avatar Pauline Lenancker, PhD student in biology and ecology, James Cook University

We've let wage exploitation become the default experience of migrant workers

Australia’s Fairwork Commission has so far this year examined more than a dozen cases of wage theft. Those cases involve hundred of workers and millions of dollars in underpayments.And it’...

Joo-Cheong Tham, Professor, Melbourne Law School, University of Melbourne - avatar Joo-Cheong Tham, Professor, Melbourne Law School, University of Melbourne

Jobs but not enough work. How power keeps workers anxious and wages low

The unemployment rate is 4.9%, but the underemployment rate is 8.1%ShutterstockThis is the third in a three-part mini-symposium on Wages, Unemployment and Underemployment presented by The Conversation...

Barbara Pocock, Emeritus Professor University of South Australia, University of South Australia - avatar Barbara Pocock, Emeritus Professor University of South Australia, University of South Australia

What Parkland's experience tells us about the limits of a 'security' response to Christchurch

In the days before the mass shootings in Christchurch I was visiting Parkland, Florida, where 17 people were killed in a school shooting on Valentine’s Day 2018. I was recording a story about ho...

Amanda Tattersall, Postdoc in urban geography and Research Lead at Sydney Policy Lab. Host of ChangeMakers Podcast., University of Sydney - avatar Amanda Tattersall, Postdoc in urban geography and Research Lead at Sydney Policy Lab. Host of ChangeMakers Podcast., University of Sydney

Friday essay: images of mourning and the power of acknowledging grief

These images of Cherine Fahd's grandfather's funeral were tucked away in a brown paper envelope for decades. As a society, we too often keep grief hidden from view. Author providedBefore her death in...

Cherine Fahd, Director Photography, School of Design, University of Technology Sydney - avatar Cherine Fahd, Director Photography, School of Design, University of Technology Sydney

Local Māori urge government to address long-running dispute over rare cultural heritage landscape

Supporters of the campaign to stop commercial development at Ihumaatao.Qiane Matata-Sipu , CC BY-SAAn escalating crisis at Ihumaatao, near Auckland’s airport, is challenging the commercial devel...

Tim McCreanor, Professor Race Relations, Health and Wellbeing, Massey University - avatar Tim McCreanor, Professor Race Relations, Health and Wellbeing, Massey University

Grattan on Friday: Shorten's not getting ahead of himself, but the tape measure is out

With the election likely to be called in about a fortnight – the weekend after the April 2 budget - behind the scenes Labor is “measuring the curtains” of government.Any sign of hubr...

Michelle Grattan, Professorial Fellow, University of Canberra - avatar Michelle Grattan, Professorial Fellow, University of Canberra

Will the New Zealand gun law changes prevent future mass shootings?

New Zealand Prime Minister Jacinda Ardern has announced a ban on certain military-style weapons.AAP/David AlexanderAs she foreshadowed in the aftermath of the Christchurch massacre last Friday, New Ze...

Rick Sarre, Professor of Law and Criminal Justice, University of South Australia - avatar Rick Sarre, Professor of Law and Criminal Justice, University of South Australia

NSW election: where do the parties stand on brumby culling?

Feral horses have severely damaged the landscape in Kosciuszko National Park.Travelstine, CC BY-SAThe future management of New South Wales’s national parks is one of the issues on the line in Sa...

Don Driscoll, Professor in Terrestrial Ecology, Deakin University - avatar Don Driscoll, Professor in Terrestrial Ecology, Deakin University

Confused about aged care in the home? These 10 charts explain how it works

Home care providers' profits are growing but many older Australians are missing out on quality care.The Conversation / ShutterstockThis week, the Royal Commission into Aged Care Quality and Safety hea...

Fron Jackson-Webb, Deputy Editor/Senior Health + Medicine Editor - avatar Fron Jackson-Webb, Deputy Editor/Senior Health + Medicine Editor

Jobs but not enough work. How power keeps workers anxious and wages low

The unemployment rate is 4.9%, but the underemployment rate is 8.1%ShutterstockThis is the third in a three-part mini-symposium on Wages, Unemployment and Underemployment presented by The Conversation...

The Conversation - avatar The Conversation

We've let wage exploitation become the default experience of migrant workers

Australia’s Fairwork Commission has so far this year examined more than a dozen cases of wage theft. Those cases involve hundred of workers and millions of dollars in underpayments.And it’...

The Conversation - avatar The Conversation

A new procedure may preserve fertility in kids with cancer after chemo or radiation

A 12-week-old baby female macaque, named Grady, was born from frozen testicular tissue. Oregon Health and Science University, CC BY-SACancer in children was often a death sentence in decades past, but...

Kyle Orwig, Professor of OB/GYN and Reproductive Sciences, University of Pittsburgh - avatar Kyle Orwig, Professor of OB/GYN and Reproductive Sciences, University of Pittsburgh

March Madness: With gambling legal in eight states, who really wins?

The odds of more legal betting are good. AP Photo/John LocherMarch means springtime, but also breathless headlines of Cinderellas, busted brackets and buzzer beaters. This year, it’ll also inclu...

John Affleck, Knight Chair in Sports Journalism and Society, Pennsylvania State University - avatar John Affleck, Knight Chair in Sports Journalism and Society, Pennsylvania State University

Will more genetically engineered foods be approved under the FDA's new leadership?

Will food laws change as more GM foods are created?Zerbor/Shutterstock.comThe world of food and drug regulation was rocked earlier this month by the news of a change in leadership at the Food and Drug...

Ana Santos Rutschman, Assistant Professor of Law, Saint Louis University - avatar Ana Santos Rutschman, Assistant Professor of Law, Saint Louis University

We need more teachers of color, so why do we use tests that keep them out of the classroom?

Teacher license exams often fail to predict which teachers will be the best, research shows.michaeljung from shutterstock.comStudents of color seldom see teachers who look like them. This is because m...

Emery Petchauer, Associate Professor, Michigan State University - avatar Emery Petchauer, Associate Professor, Michigan State University

Niger has the world's highest birth rate – and that may be a recipe for unrest

While fertility levels have declined rapidly in most parts of the world, many countries in the sub-Saharan African region of the Sahel have seen their reproductive rates go down very slowly, and only ...

John F. May, Adjunct Professor, Georgetown University School of Nursing and Health Studies, Georgetown University - avatar John F. May, Adjunct Professor, Georgetown University School of Nursing and Health Studies, Georgetown University

Nuns were secluded to avoid scandals in early Christian monastic communities

Margareta, head of the women's community at Lippoldsberg (in modern-day Germany) clasps hands with an Augustinian monk as he hands her a book.Lippoldsberg Evangeliary. Kassel, Landesbibliothek, MS the...

Alison I. Beach, Associate Professor of History, The Ohio State University - avatar Alison I. Beach, Associate Professor of History, The Ohio State University

What a backdown.

On Tuesday, with all the grace he could muster, Treasurer Josh Frydenberg declared that he wouldn’t be implementing as many of the banking royal commission recommendations as he had said he would.

As he put it:

Following consultation with the mortgage broking industry and smaller lenders, the Coalition Government has decided to not prohibit trail commissions on new loans, but rather review their operation in three years’ time.

Trail commissions are the small annual payments lenders make to mortgage brokers to reward them for loans they have arranged, typically between 0.165% and 0.275% of the amount outstanding per year.

They are paid in addition to the upfront commission, which is typically between 0.65% and 0.7% of the amount lent.

On a loan of A$500,000 they could amount to A$1000 per year, a payment which, in the words of Royal Commissioner Kenneth Hayne is “money for nothing”.

Hayne recommended that the borrower, not the lender, pay the mortgage broker a fee. Trail commissions would be axed straight away, and after a period of two or three years upfront commissions would go too.

In responding to the report on Day 1, Frydenberg more or less endorsed Hayne’s recommendation.

From July 1, 2020, the government would outlaw trail commissions on new loans.

It would ask the Council of Financial Regulators and the Australian Competition and Consumer Commission to review the impact of the changes and implications of moving to complete borrower-pays remuneration in three years time.

The backdown means trail commissions are also safe for three years, which, given the likelihood of another lobbying campaign from brokers in three years time, means they are probably safe forever.

There’s a case against commissions

Anyone who has seen the movie “The Big Short” has seen a dramatic and only somewhat fictional representation of what can go wrong in the mortgage broking industry.

In that rendition, a bunch of highly incentivised, all care and no responsibility brokers help borrowers get loans they have no reasonable ability to repay. The brokers make out like bandits and the world economy is brought to the brink of total collapse.

We can all agree that was a bad outcome. According to Hayne, the problem with commissions is that they make brokers act in their own interests, rather than those of their customers.

But commissions are common…

It’s a legitimate concern, but let’s not forget that a range of actors in the economy act in their own interests all the time. Consumers buying everything from orange juice to health insurance to television sets act in their own interests. And firms selling them do too. Many pay their sales staff commissions.

Deferred commissions are common too. For executives, they ensure that they have something at risk after their term of services. For mortgage brokers, they create an incentive to recommend loans their customers won’t later switch out of.

Hayne thought that wouldn’t be needed. He recommended (and the government agreed) that the law be amended to require mortgage brokers to act in the best interests of borrowers.

It’s a nice idea, but tricky to police. It might be better to properly align the incentives to ensure the interests of the broker and borrower coincide, which is the position the government has belatedly adopted.

If it keeps commissions, as it now seems determined to do, it might need to apply some latitude to the term “best interests”. It is hard to require brokers to act in the literal best interests of their clients when the best loans for many of them will be the cheapest – mortgages from lenders that don’t pay commissions.

…and so is politics

The politics are complicated. Mortgage brokers account for more than half of all new mortgages written.

Notwithstanding the desire to look tough and adopt all of the Hayne recommendations, both sides of politics are aware that brokers are typically small(ish) business people of the kind they usually court aggressively, and that many would not survive having to charge upfront fees.

If the old adage is right, that the most dangerous place is between a politician and a camera, then another fairly hazardous spot is between a voter and property.

Mortgage brokers play an important role. At their best they help borrowers get better terms and inject some competition into an otherwise very concentrated banking market.

But if their incentives are not well-aligned then things can go awry, Big Short style.

We’ll have to wait

The best solution might be to make sure brokers get paid for getting their clients a good mortgage, rather than just a big mortgage.

This could involve “bands” of commissions based on mortgage size, rather than a bigger commission for every extra dollar borrowed.

And it could involve “skin in the game” where the size of the repayment is related to the commission.

Doing nothing would be a bad idea. So too might be doing something radical as Hayne has proposed.

But nothing might be exactly what we’ll get. The Coalition appears to have put off designing a proper commission structure for the next three years in order to buy some peace.

Authors: The Conversation

Read more http://theconversation.com/vital-signs-its-one-thing-to-back-down-on-haynes-recommendation-about-mortgage-brokers-its-another-to-offer-nothing-in-its-place-113544