Fintech sector reacts to Federal Budget

by Mike Wood13 May 2021

The fintech sector has welcomed aspects of Tuesday night’s Federal Budget, with leading industry figures commending the progress made by the government in advancing Open Banking and diversity within the sector.

The 2021-22 Budget included additional talent visas for international workers within the tech sector, as well as science, technology, engineering, and maths (STEM) scholarships for women.

“There weren’t too many surprises for the technology sector in today’s budget,” said Rebecca Schot-Guppy, CEO, FinTech Australia. “STEM scholarships for women and changes to talent VISAs are pleasant additions to existing suite of policies. We also welcome the government's review into tax incentives for the VC industry, and look forward to working closely with them on this.”

“It’s also commendable that the Morrison government is following the UK’s lead in creating a patent box incentive program to keep IP in Australia. We would like to see this program rolled out to other sections of the technology industry sooner rather than later, as it encourages innovation and rewards success.”

Late last week, a huge boost in funding was announced for the tech sector, though currently the government has not yet adapted the recommendations made by a Senate committee regarding Customer Data Rights – a crucial part of any progress in Open Banking.

“The most poignant reforms were announced last week in the Government’s $1.2 billion technology package,” said Schot-Guppy. “It may have been optimistic given the timing, however this was a great opportunity to immediately implement more of the recommendations suggested in Senator Bragg’s Senate Inquiry report.”

“For example, this budget could include the addition of a pool of funds within the Research and Development Tax Incentive for software-based innovation. Given the other tax breaks on offer for other industries, further schemes that favour start-ups and emerging companies shouldn’t be off the table.”

Tonia Berglund, Director of Product at Envestnet | Yodlee, added that data rights were vital to ensure the success of Open Banking in Australia.

“Over the past few years, the concept of Open Banking has been rapidly developing in Australia and around the world driven by increased demand for consumer control, protection, and transparency,” she said. “Open Banking involves organisations sharing their banking data with accredited third parties to help with broad use cases such as improving lending decisions, tracking spending behaviors and comparing products and services.”

“This provides uniformly consistent and resilient access to data with reduced security and operational risks for all parties. As the Open Banking market continues to develop, more companies will be able to seamlessly integrate data from a number of sources, ultimately empowering consumers to take control of their lifestyle and finances.”