Our Policy Submissions – Q4 Highlights
FinTech Australia was busy during the final quarter of 2022, with submissions made to policy consultations across a range of important issues for the fintech community. We have highlighted a few of our recent submissions you may have missed.
Startup Year: Consultation Paper
In November, the Department of Education consulted on the design of the Startup Year initiative, a program to provide HECS-style loans to allow students to participate in university incubator or accelerator programs.
Our submission proposed broadening the initiative’s selection criteria to include Consumer Data Right (CDR) innovation and introducing a principles-based public benefit and innovation test. The submission emphasised the importance of raising public awareness of CDR and called for the Government to incentivise the development of innovative use cases.
We encouraged the Government to specifically include the development of CDR use cases as a Startup Year priority area. Including the CDR as a priority area would support university students and the startup community to participate in the new CDR ecosystem and drive new CDR‐powered products and services.
Our submission also called for the Government to replace the set whitelist of priority areas with principles-based public benefit and innovation tests to broaden the selection criteria,. We suggested these tests could complement other early-stage business initiatives and better align with the objectives of the Startup Year initiative with the existing startup policy ecosystem.
ASIC Industry Funding Model Review: Discussion Paper
As part of its review of the ASIC Industry Funding Model (IFM), Treasury released a discussion paper in September seeking stakeholder views on options for potential changes.
Our submission recommended a dedicated consultation on expanding the IFM to new and emerging sub-sectors, like crypto and Buy Now, Pay Later, should be held after the perimeter of regulation for these sub-sectors is settled. This approach would ensure cost recovery is proportionate and avoid uncertainty and inconsistencies.
We further submitted that care should be taken to avoid penalising new and emerging sectors, as innovative products may require exploratory surveillance and more guidance from ASIC. We encouraged the Government to consider implementing a different metric to determine the tiering of levy amounts to reflect the differences between sub-sectors, to further ascertain the size of the entity and their share of ASIC’s regulatory effort.
We also raised broader concerns that sudden and disproportionate levy increases can create unsustainable overheads for small businesses, particularly in the current difficult market conditions. We supported proposed measures that would provide more certainty and guidance about the expected cost of levies and measures to minimise volatility, including more consistent reporting of indicative levies. We also suggested that ASIC may take a more proactive role in engaging with entities that have fewer resources and capacity to understand the impact the IFM has on them.
Consumer Data Right: Exposure draft legislation to enable action initiation
In September, the Government released exposure draft legislation to enable action initiation in the Consumer Data Right (CDR). Action initiation would empower consumers to authorise, manage and facilitate actions securely in the digital economy and could enable use cases like making a payment, opening and closing an account, switching providers, and updating personal details across service providers.
Our submission supported this long-anticipated expansion of the CDR and made some recommendations to ensure the legislation is flexible enough to adapt to new use cases and models over time. We called for a more inclusive accredited action initiator definition to allow more fintech startups to participate, while maintaining protection for consumers.
While acknowledging the ACCC’s power to regulate certain fee-charging practices, the submission encouraged the government to implement a more tailored and standardised approach to avoid potential discriminatory practices. Additionally, we supported the proposed privacy safeguards and suggested that user testing may be considered to complement the mechanism.
We were glad to see this legislation progressed quickly and introduced into Parliament before the end of the year.
Board of Taxation Review of the Tax Treatment of Digital Assets and Transactions
In September, the Board of Taxation consulted with the industry as part of their review of the appropriate policy framework for the taxation of digital transactions and assets in Australia. We participated in the Board’s targeted consultation process and hosted the Board and industry tax professionals for a roundtable with members at our Intersekt 2022 conference.
The submission addressed the issues members have experienced with the current tax treatment and outlined some proposed legislative recommendations. We submitted that further detail and clarity for transactions and assets are needed to adequately address the complexities of the tax treatment of crypto assets and transactions. The submission explained the impact of insufficient guidance on numerous digital assets and transaction areas. Examples in the submission included the application of the principles of mutuality in decentralised autonomous organisations, the characterisation scheme for Airdrops to adequately address the different circumstances, and that better alignment in the tax treatment of initial coin offerings is needed to keep pace with the rapid evolution of token characteristics and token distribution models and more.
Our submission further suggested a simplified tax compliance regime for the crypto asset industry to make compliance more affordable and provides fintech with more access to professional crypto asset tax advice. We recommended greater care to be taken when introducing rules specifically for the crypto industry to avoid unintended side effects. We additionally advocate the government to consider other tax transparency programs rolled out internationally to promote national tax transparency.
How to get involved in our policy work
FinTech Australia regularly makes submissions to consultations across a wide range of policy and regulatory issues. Communications about how to get involved are distributed to our Policy Working Group membership.
Reach out about a membership if you would like to contribute and shape our policy work.
See all our recent submissions.