The budget announcement by Australian Treasurer Scott Morrison includes a big boost for Fintech. Multiple areas of improvement in the innovative financial sector include, open financial data reforms, reduced barriers for banking licences, an expanded regulatory sandbox and digital currency tax cuts. Morrison also used the budget to deliver a detailed new statement about how he will create competition and accountability in Australia’s banking system. These major initiatives in the 2017-18 Australian budget were warmly welcomed by FinTech Australia – the sectors advocacy association.
“We welcome these initiatives – they’re a huge step forward when it comes to growing a globally competitive Australian fintech industry, that will also deliver greater choice and improved financial outcomes for consumers,” said FinTech Australia CEO Danielle Szetho. “We’re also proud that many of these initiatives have come about through the strong and detailed advocacy work undertaken by FinTech Australia and its members.”
Get ready for #Budget2017 bingo! @Innov_Aus pic.twitter.com/xx9bhQj4OV
— Danielle Szetho (@mdm_z) May 9, 2017
Among the budget initiatives welcomed by FinTech Australia include:
- The proposed expansion of Australia’s Fintech regulatory sandbox to allow fintech businesses to test a wider range of fintech products without needing a licence, and to expand the sandbox testing period from 12 to 24 months.
- A government commitment to deliver a framework to allow innovative Fintech 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 Fintech firms to become challenger banks, by changing current bank shareholder restrictions and allowing financial institutions with less than $50 million in capital to call themselves banks
- The 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.
- A decision to ensure people using digital currencies, such as bitcoin, do not have to pay GST 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.
- The government’s announcement that it will legislate a mandatory comprehensive credit reporting regime, if credit providers are not reporting at least 40 per cent of their data by the end of 2017 – this initiative should help improve fintech firms’ access to positive credit data to provide more choices for consumers.
Szetho said that FinTech Australia would also now be closely examining the draft crowd-sourced equity legislation, released by the government on budget day. She also stated that FinTech Australia would be helping other startup industry groups to assess the potential impacts of the government’s announced new levies on businesses which employ skilled migrants.
“It is pleasing to see that the government has clearly used the budget to reaffirm its commitment to Australia’s Fintech industry, and sees this industry as a driver of increased consumer choice and jobs growth in financial services. We now welcome the speedy implementation of these initiatives, given that Australia is in an extremely competitive and fast-moving global environment when it comes to establishing a regional Fintech advantage,” said Szetho. “Finally, we will also be seeking to work closely 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.”