The Select Committee on Financial Technology and Regulatory Technology has published its second report on the state of fintech and regtech in Australia, focusing again on how the government can do more to support research and development (R&D) activities, and, of course, promote blockchain.
Round two from the committee [PDF] makes a total of 23 recommendations and either builds on, or supersedes, the 32 it made in September.
Australia’s R&D laws have faced scrutiny from the country’s startups and big business for many years. However, the 2020-21 federal Budget contained a AU$2 billion boost in additional research and development tax incentives (RDTI).
The committee said while the changes were welcome, it wants further tweaks, recommending it be amended to allow for different assessment methodologies to be used; and quarterly payments to successful applicants. It also wants the government to abolish interest withholding tax.
It said there is still a need for greater clarity around the eligibility of some activities, such as software, for the RDTI. As a result, it’s asked the government to consider the establishment of a separate software-specific tax incentive scheme.
See also: Australian tech unicorns say R&D scheme misses the mark
With a separate inquiry into Australia’s skilled migration program underway by a different committee, the committee has provided its thoughts, such as recommending the government review the global talent visa program and Hong Kong visa arrangements to ensure international competitiveness, including consideration of salary caps, age thresholds, and turnover requirements.
It also asked that when undertaking the review of the global talent visa program, the government consider providing clearer policies and guidelines on the identified target sectors.
“The committee recommends that the Australia government consider the introduction of more permanent residence visa options for employees of high-value businesses relocating to Australia,” it added.
“The committee recommends that the Australian government consider mechanisms to improve visa administration, including faster processing times, and ongoing review of visa eligibility to ensure visa categories are adaptable and responsive to market changes in the fintech and regtech sectors.”
On blockchain, the committee recommends the Council of Financial Regulators Cyber Working Group ensure its work takes into account existing and emerging international data standards with respect to blockchain and smart contracts.
“To this end, the Working Group should maintain open channels of communication with Standards Australia,” it said.
It’s also asked the Department of Industry, Science, Energy and Resources to regularly publish information about the implementation of the National Blockchain Roadmap and an evaluation of that implementation. It also wants the roadmap updated frequently.
The committee has asked National Cabinet to consider supporting a blockchain land registry initiative as a pilot project for Commonwealth-state cooperation on RegTech. It’s similarly recommended the government consider how best to improve clarity to the standing of smart contracts under Australian law as a matter of priority.
The establishment of a Commonwealth “rules as code” innovation hub, accompanied by a regulatory sandbox, has also been pitched by the committee to advance legal coding approaches to Commonwealth legislation and regulation.
It also recommended the government review the ability for businesses to access relevant information from government registers, including ASIC registers and AEC electoral roll data, for the purposes of “facilitating identity checks and offering Digital Identity services, particularly in comparison with how this access is facilitated in similar jurisdictions overseas”.
On the country’s Consumer Data Right, the committee wants to see further interoperability work between the Australian scheme and those of international counterparts; and on the consumer side, “nudge” the public to make them aware such a scheme exists.
After publishing the interim report in September, the committee announced in November it would be continuing its examination into the state of the fintech and regtech scenes in Australia, particularly concerned with ensuring the county is ready to emerge strongly post-COVID.
HERE’S MORE
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The Senate committee probing fintech and regtech has made 32 recommendations. Here’s everything they say could fix the problems with financial services innovation in Australia.
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Blockchain Australia CEO said there should be active consultation while representatives from RMIT said there’s an opportunity for ‘regulatory evolution’ around blockchain and digital assets, such as cryptocurrency.
