Andrew Bragg (NSW, Liberal Party) Share this | Hansard source

Our agenda in this space has been very clear and consistent for some years. The Prime Minister, when he was the Treasurer, was, in many respects, Australia's first champion in the parliament for fintech. Over the last few years we have had a royal commission into the banking and financial sector where we have seen that the incumbents aren't doing a very good job. So Australians need more choice when it comes to financial products. These new choices—more competition—won't just fall out of the sky. Innovation will have to, ultimately, be the pathway for us to have more choice in this country in the financial sector.

This bill, the Treasury Laws Amendment (2018 Measures No. 2) Bill 2019, is one part of a broader agenda. As Senator Marielle Smith alluded to, we are currently running an inquiry into the fintech and regtech sector, which the Senate supported last year. The overriding agenda here is getting more jobs in Australia and having more consumer choice. As the Hayne royal commission showed, Australians need more choice, and the bridge to that choice is fintech.

Ultimately there are five large challenges, in my view, which determine how competitive or how good you as a nation will be in this fintech space. They are: capital; access to skills; taxation; the regulatory regime; and, of course, the culture. People often remark that the culture, which is difficult for a government to drive, will determine the dynamism and the nature of the products which are available on the market. Countries and jurisdictions like Israel, Singapore and California are regularly held out to be the exemplars of culture. All of those factors will be considered by the select committee inquiry.

When you talk about the key principles that you will weigh up when you're looking at regulation or legislation, as we are today in relation to this sector, I believe that you're weighing the need to innovate against the need to protect consumers. Those are ultimately your two counterweights. So every single bill that comes into this place that we propose, like this sandbox bill today, weighs up the need for our country to innovate and to deliver more and newer products against the need to protect vulnerable consumers, because it is true that the financial sector has shown a regular propensity to fail when it comes to consumer protection.

Turning to the particulars of this bill, we have a waiving of a licence requirement for two years. This is not a carte blanche approach. The regulator, ASIC, in the circumstance of having a waived licence, could still intervene within 30 days and say: 'No, that is not an appropriate idea, business or concept. There will be no waiver for you, Mr or Mrs Fintech.' Effectively, it provides relief for 24 months from having to take out an Australian credit licence or an Australian financial services licence. There are some exclusions: it can't be a margin lending product and, equally, it cannot be a derivatives product. It's taking the really complicated, confusing products, if you like, off the market.

Further, this deploys a much more flexible approach to the regulatory framework than we've seen, which recognises that this fintech environment is very dynamic and changes so regularly. The idea of bringing a bill through these two chambers every time you want to respond to a market development really is outdated. It gives the minister—in this case, a very good minister—the ability to make a regulation to change or to tweak the regulatory framework.