ED HUSIC MP
SHADOW MINISTER FOR THE DIGITAL ECONOMY
MEMBER FOR CHIFLEY
TREASURER, THE (FINTECH) BUCK STOPS WITH YOU
I need to start this piece with a startling confession.
Treasurer Scott Morrison recently said something that made me pay attention.
A couple of weeks ago, the Financial Review reported that the Treasurer had addressed members of the Australian fintech community and issued a stern demand.
He told them he’s counting on Australian fintechs “not to stuff up” the implementation of open banking reforms.
With just a few words, he implied that the success of his ideas rest not on the quality of his own work – but on the capability of the fintech community.
The question that must be asked is: why isn’t the Treasurer taking his own advice to not stuff things up?
When it comes to fintech reform, the smudged prints of a butter-fingered Treasurer are there for all to see.
Some quick examples.
We’ve headed back to Parliament this week to resume sittings and debate a range of proposals that would help Australia’s fintech community. Or so you’d think.
First example: equity crowdfunding. It’s been nearly a year since the Treasurer introduced the second wave of equity crowdfunding reforms to federal Parliament.
They haven’t passed. They’re stuck in the Senate.
Not because of the Opposition or crossbench. In fact, Labor’s biggest problem with the bill is that the reforms won’t take effect quickly enough.
The real reason for the delay: the government simply can’t be bothered to list the laws for debate.
The Government should be urgently pushing these reforms; after all they’re designed to fix the botched first round of equity crowdfunding laws the Coalition pushed through in early 2017.
Laws that people warned the Coalition for ages were too red tape and cost heavy.
The vacuum created by the introduction of a clumsy equity crowdfunding framework has pushed startups increasingly towards Initial Coin Offerings as an alternative pathway to raise capital.
The growth in ICO popularity makes you wonder if the latest equity crowdfunding laws will become another ‘ScoMo dodo’.
The fintech community wasn’t responsible for these delays and stuff ups, Treasurer.
What about laws to fix up the lifeless fintech regulatory sandbox arrangements ushered in by the Coalition?
Arrangements that only four – just four – Australian fintechs bothered to use since they were announced in 2016.
Just to let you know how badly we’re performing, in roughly the same period of time the UK’s sandbox hosted over 75 fintechs.
Again, the fintech sandbox changes are going nowhere because of poor parliamentary management.
And again, the fintech community’s not responsible for this, Mr Morrison.
Another example: the Treasurer’s announcement of a “fintech bridge” between the UK and Australia.
Local fintech’s are already questioning the wisdom behind this arrangement when Australian fintechs haven’t had the chance to mature relative to UK counterparts.
A point compounded by the bigger concern to local firms: the lack of a complete, robust and properly functioning fintech regulatory framework.
Given the competitive and regulatory imbalance between the two nations, it’s no surprise to hear Aussie fintechs remark that the Treasurer’s fintech bridge is simply a platform for “digital re-colonisation”.
They’re concerned the bridge will act as a one-way street allowing bigger UK fintech players to extract greater competitive advantage here – as opposed to helping our fintechs secure a firm foothold in the UK market.
To rub salt into that wound, it’s worth pointing out that London is one of the few big markets where the Australian Government hasn’t set up a startup landing pad.
The bigger question is: is the fintech community responsible for the fintech bridge arrangements and implementation, Treasurer? No.
Finally, comprehensive credit reporting reforms that are supposed to free up rivers of data for fintechs?
Debated and considered for years. Then introduced suddenly – absent one vital part.
A crucial review by the Attorney-General’s department into future treatment of credit hardship provisions – which will play a large part in future credit arrangements – hasn’t been finished.
Admittedly, Labor copped some heat from some fintech players for simply not waving through CCR reform without the hardship review.
The fact is the way the Government designed CCR reform would’ve led to very poor consumer outcomes, people who’d hit hard times but done the right thing and entered into hardship plans with their bank.
While we support mandatory CCR in principle, waving through a botched and unfair model would’ve been unconscionable.
So the focus should firmly rest with the Turnbull government, who should never have botched CCR reform without the review being completed.
Again, the fintech community’s not responsible for that stuff up.
The problem for Mr Morrison is one witnessed at a wider scale within the Turnbull government.
Addicted to announcement, deficient with delivery.
Australia’s fintech community has a huge and valuable role to play.
They’re working furiously to develop competitive alternatives to the offerings of bigger, well established financial services businesses.
They’ve got enough on their plate making sure their own ideas and firms succeed.
They don’t need to be blamed for the poor planning that seems to characterise much of the Treasurer’s fintech “reforms”.
If the pressure to “not stuff it up” should rest with anyone, it’s not with the Australian fintech community.
Mr Morrison, if you’re looking for the answer as to who needs to make sure they don’t stuff up fintech reform the nearest mirror will do.
This piece first appeared in the Financial Review online on Monday 13 August 2018
TUESDAY, 14 AUGUST 2018
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