The 2016-17 Budget announces a number of initiatives to further support the growth of Australia’s FinTech - or financial technology – industry.
The Turnbull Government is supporting innovation and better services through new products in services and financial technology or FinTech.
In February we announced our FinTech Advisory Group, in March we released our FinTech Statement and today we announce new actions to encourage entrepreneurs in this industry.
The initiatives in the Budget continue to deliver on our objective to create an environment where Australia’s FinTech sector can be internationally competitive, and can attract international innovators to Australia.
A strong and vibrant FinTech industry will play an important role in the transition underway in Australia’s economy. Australia already has competitive financial services sector and the Turnbull Government will ensure our policy settings remain relevant for a modern, digital economy.
In the coming period, the Australian Securities and Investments Commission (ASIC) will commence consultation on a ‘regulatory sandbox’ for FinTech businesses who want to test their early stages ideas with clients.
The Government is looking to establish a regulatory sandbox where FinTech start-ups and businesses can test 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.
We believe that Australia’s financial system laws and regulations should enable innovation. The Government is pleased that ASIC is pursuing a ‘regulatory sandbox’ which will enable greater flexibility in Australia’s regulatory framework and leverage our global reputation for strong regulation.
Other innovations, such as developments in Blockchain (distributed ledger) technology have potential to re-engineer transactions across the economy. To position Australia for these developments, Data61, a key provider of leading digital innovation research in Australia, will undertake a review of opportunities for its adoption in government and the private sector, including testing its application.
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.
The Government has also announced our new actions to progress commitments in the FinTech Statement.
Today we released a discussion paper seeking public submissions on options 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.
The Government is also calling for feedback on the best way to ensure investors in FinTech startup activities are eligible for the venture capital tax concessions. Submissions can be provided through: venturecapital@treasury.gov.au
Global disruption in financial services is changing the way the world does business, empowering consumers with more choice. Today’s announcements will ensure Australia keeps pace with innovation in banking and finance, and remains competitive.
FinTech offers real opportunities to boost our financial services exports, taking advantage of the growing middle class in Asia and the increasing digitisation of commerce.
We must not only nurture Australian talent to grow our financial service exports, but also entice talented entrepreneurs to build their FinTech businesses in Australia.
That is why the Turnbull Government has committed $200,000 in this Budget to promote Australia internationally as a FinTech destination and to highlight the commercial opportunities of the world’s best regulatory sandbox where innovators can test and refine their ideas.
You can learn more about our FinTech agenda at: www.fintech.treasury.gov.au, or read the GST treatment of digital currency discussion paper at: www.treasury.gov.au. You can also check out the details in the 2016-17 Budget at: www.budget.gov.au