Budget 2017: What it means for fintech industry
How the financial innovation market fared in the Budget.
Following last year's budget, which had a strong focus on innovation and fintech, Australia's fintech community has been waiting to see what the government will announce in the 2017-18 budget.
Bolstered by actions to support the fintech sector, FinTech Australia CEO Danielle Szetho welcomed this year's budget: "[These initiatives] are a huge step forward when it comes to growing a global, competitive fintech industry that will deliver greater choice and improved financial outcomes for consumers."
“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," she said.
Reducing barriers for new banks
The Turnbull Government announced a reduction in barriers for new banks in Australia. This includes relaxing the 15% ownership cap for innovative new entrants as well as lifting a prohibition on the use of the term "bank" for authorised deposit-taking institutions (ADIs) with less than $50 million in capital.
Competition has been a much-discussed topic after the chair of the House Economics Committee David Coleman commented that there has only been one banking licence granted in the past decade.
An enhanced regulatory sandbox
Following the announcement of the regulatory sandbox in December 2016, the government has now announced enhancements to this scheme in a bid to "boost Australia’s position as a global fintech hub".
It will extend the regulatory sandbox to companies planning to provide "holistic financial advice, issuing consumer credit, offering shortterm deposit or payment products, and operating a CSEF intermediary".
The government also announced an extension to the testing period from 12 months to 24 months.
The government will introduce an open banking regime - likely to be welcomed by fintech players.
An independent review will be commissioned by the end of 2017 to manage the scheme.
As part of the budget, the government released draft legislation to extend crowdsourced equity funding (CSEF) to proprietary companies in an effort to open up this funding for a wider range of businesses.
Removing double taxation for bitcoin
Announced earlier this week, the government has announced its support for the Productivity Commission's recommendation to end the double taxation of bitcoin.
To do this, digital currencies such as bitcoin will be treated as a financial supply for GST purposes.
2030 strategic plan
Innovation and Science Australia has been commissioned to develop a strategic plan for the Innovation, Science and Research System to "ensure our economy is prepared to embrace innovative opportunities".
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