Budget boosts Australia’s fintech
Advance Australia fintech with flair
Good days and good times have come to Australia’s fintech scene with the 2017-18 Australian budget bringing in some useful initiatives.
Some of the positives include open financial data reforms, reduced barriers for banking licences, an expanded regulatory sandbox and digital currency tax cuts – all welcomed by Fintech Australia, a national industry association.
Australian treasurer Scott Morrison used the budget to deliver a detailed new statement about how he will create competition and accountability in the nation’s banking system.
In response, Danielle Szetho, CEO of Fintech Australia, says they’re a “huge step forward when it comes to growing a globally competitive Australian fintech industry”.
Budget initiatives include the proposed expansion of the country’s regulatory sandbox to allow businesses to test a wider range of products without needing a licence, and to expand the sandbox testing period from 12 to 24 months.
There is a government commitment to deliver a framework to allow firms to more easily access bank customer financial data by 2018, following an independent review to be conducted in 2017.
Steps to reduce barriers for firms to become challenger banks will be introduced. These will change current bank shareholder restrictions and allow financial institutions with less than $50 million in capital to call themselves banks.
There will be a release of draft legislation to extend the government’s crowd-sourced equity funding framework from public companies to private companies, which “should help small businesses to better access equity to grow via innovative fintech platforms”.
Digital currencies will be subject to a decision to ensure people using them do not have to pay GST (goods and services tax) on the use of the currency itself – which until now was a form of double taxation and “impeded the growth” of Australia’s digital currency industry.
Moreover, the government says it will legislate a mandatory comprehensive credit reporting regime, if credit providers are not reporting at least 40% of their data by the end of 2017. This “should help improve fintech firms’ access to positive credit data to provide more choices for consumers”.
Szetho says that Fintech Australia would be working closely with other start-up industry groups to “assess the potential impacts of the government’s announced new levies on businesses which employ skilled migrants”.
In addition, Szetho says it wants to work with the government as it establishes the new Australian Financial Complaints Authority to “ensure it provides a fair and low-cost outcome for fintech firms who will be subject to its activities”.
