Advocates for a permanent support mechanism for the securitisation market have not given up hope of achieving their goal, despite the Treasurer making no reference to this possibility in his announcement this week that the Australian Office of Financial Management will make no more investments in residential mortgage-backed securities.Some industry representatives expressed surprise that the Government made its decision without consultation. Now, any discussion on the issue is clearly off the table until after the election.The Government allocated an initial A$8 billion for the AOFM to support the securitisation market in October 2008.  The AOFM was to invest in primary note issues supported by portfolios of prime mortgages. Its total investment has been about $15.5 billion, made up of 67 securitisation deals issued by 20 lenders.You might expect the financial services industry to argue that, long term, a market should be allowed to fail if it cannot support itself without government support, but there are a large number of industry participants who believe government should play an ongoing role.This was made clear in the Senate Economics References Committee's May 2011 report, Competition Within the Australian Banking Sector. The committee received a large number of submissions arguing that government support for securitisation should continue and that the AOFM's investment mandate should be expanded to cover issues backed by assets other than prime mortgages.The committee made recommendations along these lines. There were also submissions arguing that the AOFM should be allowed to invest in the secondary market, that the Government should establish an RMBS repurchase facility and that the Government should provide performance guarantees for the underlying mortgages in RMBS issues (the so-called Canadian model).The chief executive of the Australian Securitisation Forum, Chris Dalton, said the ASF's preferred option was to maintain the AOFM program as a revolving facility, to be brought into play during periods of severe market disruption. It would also give the AOFM a wider mandate.The ASF has regular meetings with government officials and has put its case.Dalton said: "Market conditions are good now but it would not take much to turn things around. The AOFM program has been a success and it has not put taxpayers' money at risk."We don't have a formal position, and, realistically, this is a post-election issue. But we do think that the AOFM has developed valuable skills over the past five years and they should not be lost."The Mortgage and Finance Association of Australia has been a supporter of the Canadian model. The association's chief executive, Phil Naylor, said: "We want an ongoing support mechanism that will help arrest a worrying long-term trend where smaller lenders are being squeezed out of the market."To be honest, we have not had much success, apart from words of comfort from various committees. If the Coalition wins the election and holds a big financial industry inquiry we will put our case again."If there is going to be a mechanism to assist in situations of market collapse, it makes sense to have a permanent system in place."The Australian