Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Hansard source

With the cooperation of the minister at the table, the Assistant Minister to the Deputy Prime Minister, I would like to give an extended response, if I may, to this issue, given it is the introduction of a new financing platform particularly targeted to small business and to start-ups. The minister has referred to an amendment that the opposition put up in the Senate to strengthen the investor protection integrity around this entirely new financing platform, but I cannot neglect the opportunity that is presented by this period of debate to reflect on this bill.

On our side, we have been very firm advocates and very big supporters of bringing in equity crowdfunding—to ensure that small enterprises and start-ups that are in need of capital injection to either kick off or grow have access to this new mechanism. It was Labor that, when in government, provided the reference to the Corporations and Markets Advisory Committee to allow the work of examining how we would allow equity crowdfunding to occur in this nation, as it was starting to operate in others. In 2012, for instance, the US government put in its JOBS Act that allowed for the emergence of equity crowdfunding in the American jurisdiction. Literally a year later, Labor, when in office, provided that reference to see CAMAC. CAMAC went away and started working, and they handed their final report to the then Abbott government in May 2014.

I am not going to go through all the history, but CAMAC put forward some recommendations that we were not comfortable with and I know the government was not comfortable with. It was largely around this whole notion of an unlisted public company. In a lot of our discussions with the start-up sector, they said they would not accept this. This bill, despite coming in two iterations to this place, continues to maintain this restriction. In fact, this bill achieves one thing and one thing only—a headline. The government wants a headline that says they brought it in. After having advice delivered three years ago on what to do with the system, this system puts a massive barrier between small businesses and start-ups and access to finance. The demands of the Turnbull government compelling business to completely change their model of business just to access equity crowdfunding represent the most restrictive conditions to be set on equity crowdfunding in any jurisdiction on the planet. It is so bad that people like Dr Marina Nehme from the University of New South Wales law faculty have said that the bill currently excludes over 99.7 per cent of companies from accessing crowdsource funding, and that:

Such a reality defeats the purpose for introducing legislation to facilitate CSF as only a very small minority of companies will be able to raise funds through this mode of finance.

That is what people have been saying. That is the barrier that is put into place. The government knows this is bad. They did not care. They were so desperate for any legislation to go through that they put this through. How do I know it is bad? Because a few weeks ago in this place the Treasurer at that place said they were going to change it. They said that they would make changes to this bill that is now about to receive royal assent—that in a few months time we will have a series of changes made to this that will make it redundant. Worse still, after saying that they would change it the finance minister, on Monday in the Senate, admitted that they had not even started consultation on the bill that will tidy this bill up—none; it has not even commenced. Like everything else with this government, this will be stuff-up that takes a long time to fix. The government has not just let down the start-up community with this bill—they have let down the start-up community badly with this bill. (Extension of time granted) What is more surprising is how badly the start-up community has been let down by representatives of the start-up community themselves; groups like—I have to say, and I am sorry to say—FinTech Australia. It should be pointed out that this group, which received $200,000 in funding from the Turnbull government last year, hardly raised a peep about this massive barrier that will prevent so many of their members accessing equity crowdfunding—not a word. The only thing that FinTech Australia took umbrage at was the improved investor protections that have been flagged by the minister at the table. The extension of the cooling off period from 48 days to five days was the only thing—

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