On 8 May, the Australian Government released its 2018-19 Budget. Please see our recent insight for an in-depth analysis of the Budget.
Below are key areas in which the Budget will impact the fintech landscape both locally and abroad:
- National Consumer Data Right: The Budget announced plans to introduce a national Consumer Data Right (CDR), which will give Australians the ability to access and share their data safely with trusted providers. This will enable businesses to better tailor their services where consumers have decided to share their data, especially in a financial planning and budgeting context where advice can be personalised. The Government will allocate over A$44 million to establish the CDR in the four years after 2018-19.
- R&D tax incentive scheme: The Government also announced a response to the review of the research and development (R&D) incentive, which enables companies of all sizes to receive a tax benefit for investing in R&D. The Budget has imposed an annual cap of A$4 million on the cash refunds which can be claimed by companies with a turnover less than A$20 million. It also has pledged A$4.1 million in 2018-19 dedicated to assist the Australian Tax Office and Innovation and Science Australia in both supervising the scheme and curbing any illegal activity regarding this incentive.
- Funding: The Budget also stated that A$700,000 will be provided throughout the year for the Digital Transformation Agency to advance its understanding of how blockchain technology could become a valuable resource for government services. This includes consideration of how such technology could be used to discourage illegal behaviour such as tax evasion and underpayment of staff. The Budget has also announced almost A$30 million in funding over the next four years to bolster Australia’s development of artificial intelligence and machine learning, including the establishment of a national artificial intelligence ethics framework.
- Prohibition on cash payments: A cash payment limit of A$10,000 was also announced in the Budget, to be effective from 1 July 2019. This was targeted at reducing the ability of black economy participants to avoid tax and reporting obligations and also launder the proceeds of crime. Despite being targeted towards preventing illegal behaviour, FinTech Australia have stated in their fact sheet that such a limit could provide an innovation opportunity for fintech payment firms, especially given Australia’s high penetration of digital point-of-sale terminals. The Treasury has released a consultation paper on the cash payment limit. Consultation closes 24 June.