Budget 2016: Government reaffirms commitment to innovation agenda with a focus on fintech

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The federal government has used the 2016 budget to reinforce its commitment to the national innovation agenda, with a particular focus on the role of fintech startups.

According to the budget papers, the government has allocated $200,000 in the 2016-17 financial year to promote Australia internationally as a financial technology destination.

The government said the funding builds on the Fintech Statement, released in March, and will be used to promote both Australian fintech organisations and Australia to offshore fintech operators.

In a statement accompanying the 2016 budget, released this evening, Treasurer Scott Morrison said the Australian Securities and Investments Commission will also soon commence consultation on a “regulatory sandbox” that will allow fintech startups to test ideas for up to six months with a limited number of retail clients.

“We believe that Australia’s financial system laws and regulations should enable innovation,” Morrison said.

“The government is pleased that ASIC is pursuing a ‘regulatory sandbox’, which will enable greater flexibility in Australia’s regulatory framework and leverage our global reputation for strong regulation.”

In reference to blockchain technology, the government said Data61 will review opportunities for the technology to be adopted in government and the private sector, including testing.

The government also used budget day to release a discussion paper that asks for submissions on options to address “double taxation” of digital currencies under the current goods and services tax regime.

“This moves us a step closer to delivering this important change that will ensure that consumers are no longer ‘double taxed’ when using digital currencies such as bitcoin to buy goods and services already subject to GST,” Morrison said.

“Global disruption in financial services is changing the way the world does business, empowering consumers with more choice.

“Today’s announcements will ensure Australia keeps pace with innovation in banking and finance, and remains competitive.”

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Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.
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