news The Government has continued its ongoing focus on boosting Australia’s growing financial technology (FinTech) sector in this year’s Federal Budget, announcing a range of initiatives to bolster the area.
FinTech refers to the growing category of startup companies which are developing technology solutions designed to leverage the financial services industry’s resources, creating innovative solutions in areas such as banking, insurance, stockbroking, investment and more. A growing cadre of Australian technology startups are targeting this area, especially associated with the Stone & Chalk technology co-working space in Sydney.
In this year’s Budget, the Federal Government announced a range of initiatives to bolster this area, building on existing initiatives such as establishing a Fintech Advisory Group.
One of the first areas the Government will invest in is a so-called “regulatory sandbox” hosted by the Australian Securities and Investments Commission (ASIC), where startups and businesses can test FinTech ideas for up to six months with “a limited number of retail clients, subject to prescribed investment thresholds and restrictions on the types of services eligible for testing”.
ASIC will consult on how to maintain consumer protections, while still allowing innovators to test their ideas and business models as part of this ‘regulatory sandbox’.
Noting the ongoing interest in the Blockchain (distributed ledger) framework at the heart of the Bitcoin technology, the Government also announced that Data61 (the agency formerly known as NICTA, now part of the CSIRO) would undertake a review of opportunities for the adoption of Blockchain technologies in government and the private sector.
“The benefits of this technology could be profound — extending right across our economy. We are looking to position Australia as a leading global player in this exciting new area,” said Treasurer Scott Morrison in a statement associated with the Budget.
The Government has also released a discussion paper seeking public submissions on optiosn to address the ‘double taxation of digital currencies under the GST regime’.
“This moves us a step closer to delivering this important change that will ensure that consumers are no longer ‘double taxed’ when using digital currencies such as Bitcoin to buy goods and services already subject to GST,” said Morrison.
The Government also called today for feedback on the best way to ensure investors in FinTech startup activities are eligible for venture capital tax concessions announced in the budget. Submissions can be provided through the email@example.com email address.
The Government has also allocated $200,000 in the Budget to promote Australia internationally as a FinTech destination and to promote the planned FinTech regulatory sandbox.
“A strong and vibrant FinTech industry will play an important role in the transition underway in Australia’s economy,” said Morrison today. “Australia already has a competitive financial services sector, and the Turnbull Government will ensure our policy settings remain relevant for a modern, digital economy.”
FinTech is important … but is it worth a whole media statement from the Treasurer in this year’s Budget, when other growing sectors have been left off the list? To be honest, I’m not sure.
Delimiter reported this week on a multi-partisan Senate report in which all three major sides of politics — the Coalition, Labor and the Greens — all agreed on a range of measures which would substantially support Australia’s video game development industry. There is no doubt that the video game industry represents a huge opportunity for Australia’s economy, just as the FinTech segment does.
So why so much love for FinTech, and none for adjacent sectors? Personally, I suspect it’s because it’s a better ideological fit with the Liberal Party. No Liberal politician is going to complain about supporting the development of banking technology companies … but a few might look sideways at initiatives to boost video games, despite the similarly huge potential amounts of money involved.
You can imagine a similar thing happening with agricultural or resources technology startups with the Coalition.
I also strongly suspect the FinTech industry has some very strong connections with the office of Prime Minister Malcolm Turnbull. Not so for the video game development industry. Unfortunately that’s politics.