The Australian government is out with a statement today indicating its intent to position Australia as a global Fintech hub. The announcement was made by Scott Morrison, MP, Treasurer of Australia, and incorporated into the budget announcement. The statement was part of a broader mission of building an accountable and competitive banking system with Fintech being a vital variable of accomplishing this goal.
Morrison said the Australian government will legislate to establish an enhanced regulatory Sandbox to facilitate more innovation, promote greater competition and increase choice for Australian consumers.
The regulatory Fintech sandbox was described as “world-leading,” allowing businesses to test for a period of 24 months a wide range of new financial products and services. This would enable businesses to evaluate the commercial viability of new concepts without a licence but subject to meeting minimum consumer protection obligations.
The Australian government also released draft legislation to extend crowdfunding or “crowd-sourced equity funding” (CSEF) framework to proprietary companies. This would be an important improvement to open up new funding for business. The government said that shareholders will be protected by the higher governance and reporting obligations that CSEF proprietary companies will need to meet thus addressing investor protection concerns.
Additionally, the Australian government is removing the double taxation of digital currency or cryptocurrencies. From 1 July 2017 purchases of digital currency (such as Bitcoin etc.) will no longer be subject to the GST, just like money.
This change was said to deliver on the Government’s commitment to remove obstacles to the growth of the Fintech industry.
The Australian government will also legislate a mandatory comprehensive credit reporting regime if credit providers are not reporting at least 40% of their data by the end of 2017. Credit markets are expected to operate more efficiently and effectively if credit providers have access to sufficient and reliable data about borrowers to inform decisions about who to lend to and on what terms.
Other important items in the Australian government announcement included a major bank levy increasing government revenue while “reducing Australia’s largest banks’ funding cost advantages, the levy will also contribute to a more level playing field for smaller banks and non-bank competitors.”