Speaking in at the Collaboration in Fintech conference in Sydney yesterday, parliamentary secretary to the minister for communications Paul Fletcher said the challenges facing the sector are “not insuperable”.
The government’s ‘agenda’ to aid the fintech community will have three aspects, Mr Fletcher said: “An improved digital infrastructure, improved digital delivery of government services and measures to encourage start up activity”.
“We need to find ways to protect unsophisticated investors, for example, while taking advantage of the internet’s capacity to facilitate rapid, efficient and low-cost capital raising,” Mr Fletcher said.
Treasurer Joe Hockey indicated in the federal Budget that the government is committed to making crowd-sourced equity funding viable for Australian start-ups, Mr Fletcher said.
“This follows a discussion paper we released on this topic in December last year, and we are now developing legislation with a view to introducing it into Parliament in the Spring sittings,” he said.
When it comes to improved ‘digital delivery’, Mr Fletcher referenced the government’s recently announced Digital Transformation Office (DTO).
“One obvious area with potential spill over benefits for fintech is DTO’s focus on solving the challenge of identity in a digital world. Enhanced digital identity processes improve efficiency and security across the digital economy.
“We will invest $33.3 million in solutions which bring together private and public identity providers. This will include a voice biometric and a secure way for people to authorise others to act on their behalf with government,” Mr Fletcher said.
The government will also put in place ‘start-up friendly policies” to boost the fintech sector, he said.
“From 1 July, there will be expanded tax concessions for employee share schemes to make it easier for small start-up companies to attract and retain the talent they need to grow.
“We will allow start-up companies to immediately deduct professional expenses incurred when they begin a business, such as legal expenses on establishing a company, trust or partnership, rather than writing them off over five years. This will provide immediate cash flow benefits.
“Start-up companies in the early stages of growth will face a lighter tax burden: for companies with an annual turnover of less than $2 million, the company tax rate will be cut by 1.5 percentage points to 28.5 per cent,” Mr Fletcher said.
The government’s new significant investor visa rules will also see a boost to the venture capital sector, he said.
