news The Federal Government has released a statement setting out its plans to support Australia’s FinTech startups in order to boost jobs and economic growth.
The document also reveals impending action on the “double taxation” of digital currencies, following recommendations from Senate Economics References Committee and the Productivity Commission over the matter.
The statement – titled Backing Australian FinTech – forms part of the National Innovation and Science Agenda, and details proposals aimed to help the FinTech sector become internationally competitive and be of benefit to the local economy by “attracting and keeping talented entrepreneurs in Australia”, according the Treasurer, Scott Morrison MP.
Working with the new FinTech advisory group and the FinTech Australia association, the government has proposed the new measures which included allowing concessional tax treatment for venture capital investments in FinTech startups.
Furthermore, the Productivity Commission will be given the task of outlining options to increase availability and access of data to facilitate new products and “better consumer outcomes”.
Regarding the GST treatment of digital currencies, which currently means consumers are “double taxed” when using digital currency to buy anything already subject to GST, the statement says:
“The Government is committed to addressing the ‘double taxation’ of digital currencies and will work with the industry on legislative options to reform the law relating to GST as it is applied to digital currencies.
Removing the ‘double taxation’ treatment for GST on digital currencies and applying adequate anti‑money laundering and counter‑terrorism financing rules may facilitate further developments or use in the future.“
Along with these measure, a number of reforms are also planned, including opening up equity crowdfunding to all companies regardless of assets and turnover; removing cooling-off periods and allowing platforms to use their discretion to cancel investments for legitimate reasons; and reviewing Australian Market Licence requirements for crowdfunding intermediaries.
The Treasurer said the government will consult with the FinTech industry over the way forward regarding Australia’s crowdfunding framework so the wider business community can gain appropriate access to “new and alternative” equity funding options.
The government, in conjunction with the Australian Securities and Investment Commission (ASIC), has also released new guidance for ‘robo-advice’ (digital or automated financial advice) to provide greater clarity to new firms providing such services to Australian consumers.
The Government has also been working with ASIC on the development of a “regulatory sandbox” for Australian FinTech that will enable firms to manage regulatory risks during testing stages, reducing the cost and time to market products.
Further, ASIC has released new guidance for marketplace or peer-to-peer lenders, including clarification of their legal obligations.
“FinTech is a positive disruption which a successful economy like Australia can and must embrace,” said Morrison. “Growing Australia’s FinTech capabilities will position Australia to seize new opportunities to develop export markets for our financial services technology in the transitioning economies of our major trading partners.
Image credit: Parliamentary Broadcasting