Open financial data reforms, a loosening of capital restrictions and barriers for banking licences, an expanded regulatory sandbox and digital currency tax cuts are among the major initiatives in the 2017-18 Australian budget welcomed by Australia’s fintech community.
In delivering the budget, prime Minister Turnbull's coalition is tapping into a rising tide of popular resentment against incumbent banks, imposing hefty new levies on the Big Four and initiating a range of initiatives to improve competition and spur innovation.
Budget promises by treasurer Scott Morrison to Australian fintechs include:
• The proposed expansion of Australia’s fintech regulatory sandbox to allow fintech businesses to test a wider range of products without needing a licence, and to expand the sandbox testing period from 12 to 24 months.
• A commitment to deliver a framework to allow startups 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.
• A decision to ensure people using digital currencies, such as bitcoin, do not have to pay GST on the use of the currency itself - long-viewed as a form of ‘double taxation’ that impeded the growth of Australia’s digital currency industry.
• Legislation for a mandatory comprehensive credit reporting regime, if credit providers are not reporting at least 40% of their data by the end of 2017 - a measure designed to help improve fintech firms’ access to positive credit data.
“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,” says Fintech Australia CEO Danielle Szetho. “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.”