Mixed views on the positive budget for fintech

  • By Christine St Anne

The budget measures including increased R&D spend have been embraced by the fintech sector but one global startup CEO believes that the budget’s focus is short-sighted and risks the future economic development of Australia as a tech hub.

FinTech Australia CEO Rebecca Schot-Guppy described the budget as “incredibly positive for fintech” highlighting in particular the Digital Business Plan.

Already announced earlier, the $800 million plan includes support for the consumer data right rollout, helping fintechs expand into overseas markets, a review into the payments landscape and investing in a digital business register, and e-invoicing measures.

As outlined in the budget papers, $28.6 million will be allocated to supporting the implementation and rollout of the Consumer Data Right.

In addition, $11.4million  will be allocated over four to  deliver a  Regtech  Commercialisation Initiative and $9.6million will be invested over four  years  to  support Australian fintech  start-ups  gain  a  foothold  in  international  markets.

For Schot-Guppy, the plan “ticks most of our wish list and pulls all the right levers to help bolster the fintech industry.”

However, Schot-Guppy would like to see the R&D incentive in place now instead of the planned 2021 introduction.

“The policy is important for fintechs capital runway particularly at their earlier stages and the changes will no doubt support their growth.

“In addition, the increased R&D spend will ensure that new innovative businesses come into our economy which will help lead our recovery,” she added.

“For us to have the best chance of supporting the sector through this pandemic, it needs to be introduced now.”

Schot-Guppy also backed the government’s move to boost the employment and training of women in STEM.

“Women continue to be underrepresented in fintech. Up until now, this has been left to the market to fix, and as a result, progress has been slow.

“We’re hoping this measure towards diversity will have substantial social and commercial outcomes both for the fintech industry and for Australia.”

Similarly, Assembly Payments CEO Tim Dickinson was positive of the measures announced on Tuesday night.

These policies show the government is keen to innovate its way out of a recession,” Dickinson said.

“Advancements in the fintech sector through greater access to public digital infrastructure like the New Payments Platform and CDR are a great move, and combined with better R&D incentives, it seems the government really does support the view that we need to innovate our way out of this,” Dickinson said.  

Industry stalwart David Thodey who is now chair of the advisory board for Tech Central also praised the government’s plan to invest $1.5 billion in manufacturing and deep tech, adding that every $1 of revenue produced by deep tech companies creates $3 of combined economic value for broader society.

“It is encouraging that the government is supporting innovative businesses as outlined in the Digital Economy announcement,” Thodey said.

“We must continue to use technology and science to drive economic growth, and leverage our investment in research translation funds.”

However for Gautam Sahgal, global CEO of Perkbox, the budget is narrowly focused on recovering Australia’s economy.

“That’s all well and good for the next 12 months. What comes after that is just as important though,” he said.

“Individual tax cuts and housing construction are great starts, but aren’t sustainably scalable.

“The groundwork for future plans of reopening international borders and attracting overseas investment in Australia is missing,” Sahgal added.

He believes that a 2030 completion date for the digital transformation of Australia is too far behind the rest of the world and doesn’t give a competitive edge.

The UK-based CEO has expanded into Australia.

“As a business, we see the incredible value in Australia. We continue to plan on investing in and growing our Australian office.

“We’d like to see a budget that plays on that same value and continues to position Australia as a global business hub.”