Slade Brockman (WA, Liberal Party) Share this | Hansard source

I rise to make some brief remarks on the Treasury Laws Amendment (2018 Measures No. 2) Bill 2019. But, before I start, I will just correct the record a little. The information I have in front of me is that, actually, seven companies have entered the sandbox since 2016, and the government are happy to acknowledge that we want that number to be higher. In fact, we would love that number to be a lot higher, which is why this bill is before the Senate. Over the same period of time, the UK's sandbox had something like 89 companies make use of their provisions. So it is clear that, in what is a competitive environment, where you have financial centres like Singapore and the United Kingdom very keen to attract the best and the brightest—the best and the brightest firms, the best and the brightest individuals, those who are on the cutting edge of innovation—we need an environment that facilitates that innovation in the most effective way possible.

I also wish to pick up on something that Senator O'Neill and Senator Whish-Wilson both referenced: the concept of risk and, in particular, the idea that anything is risk free. Nothing, particularly in the financial services sector, is free, and I would contend that it shouldn't be. The role of regulation is not to lock Australians in a white room with no doors. The role of regulation is to manage risk and to balance—and allow people to balance—risk against potential rewards. People need to go into these kinds of new products with their eyes wide open. They need to understand what they are doing. But there is an inherent level of risk in something that is new. The only way of having no risk is to lock yourself in a white room with no doors. That is not what the Australian people have shown they want to do. Australian people embrace innovation. Australian people have been early adopters of many of the new technologies in the financial services sector. Giving Australian companies and Australian entrepreneurs the maximum opportunity to develop ideas within the safe-harbour provisions of the sandbox, the innovation precinct of the sandbox, gives Australian companies that opportunity to compete with other nations, like Singapore, the United Kingdom, the US, Israel and other places where people naturally think of innovation occurring. But innovation occurs in Australia, and by enhancing the regulatory environment in this way we can enhance that level of innovation in the financial services sector.

Basically, what this legislation does is allow businesses and entrepreneurs to test new products without the inhibitive need to have a financial services or credit licence from ASIC. This is very important. We have legitimate hoops to jump through to gain a financial services licence or credit licence in this country, and that is to provide a level of protection to consumers in what is a very complex financial environment. However, those hoops—that level of regulation—do provide a barrier to entry, particularly for the entrepreneurs and innovators in this space. We want people to be able to 'trial and error' these kinds of products in a safe environment, to help them to work out what works, what doesn't and what is safe to be released more widely, and then to gain access to a financial services or credit licence.

These enhancements to the legislative sandbox build on the existing arrangements. They broaden the scope, expanding who can use it, what can be tested and for how long a business can test it. The enhancements enable firms to test specific financial services, including financial advice, the issuing of consumer credit contracts and facilitating crowdsourced funding.

This is part of the government progressing policies that ensure that Australia is a leading destination for fintech, not only for talent but also for investment. We want foreign investment in Australian fintech. We need to be more responsive to what consumers need. When payWave first appeared on the market, I was very surprised that Australians and I myself adopted it as quickly as we did. I thought there would be a barrier there. I thought people would be inherently resistant to how seemingly easy it was to transfer money with very little check or balance with no signature anymore. But I and other Australians adopted it extraordinarily quickly. Consumers often drive these products into the market, but entrepreneurs are the ones who need to develop them and who need to undertake the R&D to make sure the systems work and to make sure that they provide consumers with what they want and need and, in that way, deliver better outcomes to all Australians. This is one part of a systematic approach to getting the policy settings right in this area and to support Australian fintech businesses to succeed.

I believe Senator Bragg may be speaking on this bill shortly. I know he has taken an enormous interest in this sector and through the select committee on fintech. I'm very interested to see what will come out of that, Senator Bragg. As I said, the government are committed to ensuring that we get the balance right in terms of risk. We want entrepreneurship. We want new ideas in the Australian economy. The enhanced sandbox is part of that.