Ed Husic (Chifley, Australian Labor Party, Shadow Minister for the Digital Economy) Share this | Hansard source

It is a pleasure to follow the member for Hotham on this legislation, the Treasury Laws Amendment (Financial Sector Regulation) Bill 2018. The legislation was characterised by the member for Hotham as being microsteps. There is no better term—if I can say that through you, Deputy Speaker, to the member for Hotham—to describe some of these. They are released with a flurry and they're announced as a big move, but you need to look at it in the context of all the other things that have been promised and not delivered. This is the problem with the government at its most critical juncture: it is addicted to announcement and deficient on delivery, regularly, particularly in the fin-tech space. On the fin-techs, as was pointed out by the member for Hotham, the fact is that we do need greater competition. Labor has argued that, in the financial services sector, having more options for customers and greater transparency, as the member for Hotham indicated, is vital. Ultimately, I might add—coming to another point that the member for Hotham raised—what is critical at this point is the need for greater trust.

Consumers clearly feel that they are not getting the best deal possible. They do expect better from their financial services system and particularly from the larger institutions. I dare say that this is why, in terms of Australia's fin-tech community, this community is so big. The reason is that—as has been seen with disruption elsewhere to industry sectors, where smaller firms apply technology in a smarter, truer way—they are going for sectors that are bloated, slow to change and not providing the services that are required or wanted or desired by consumers. Where the profit margins are so large, the smaller firms go in, and that's why the fin-tech community here has had so much initial success. But, having said that, what they are confronted with is obviously, through the disruption, a need for us to change our regulatory frameworks. The tremor that is felt through that reaches here in the form of all these new laws that have to be considered by the parliament.

This isn't the only bill. In my contribution I want to reflect on a number of pieces of legislation that have been touted by the government as taking a big step forward with respect to fin-tech reform and helping the local community. A number of pieces of legislation are out there, but, before they even get to this place, there's consultation round after consultation round after a draft item of legislation is put forward. In particular, industry bodies that have been formed, especially to represent the fin-tech community in Australia—notably FinTech Australia—have to consult with the Treasury, have to put in submissions and have to put in their argument for a financial regulatory framework that is much more amenable to the smaller firms.

I went to FinTech Australia's website just to see the list of submissions. They put in a submission to the Attorney-General on anti-money-laundering and counterterrorism regulations; a submission to the consultation paper regarding digital currencies under the AML/CTF regime; supplementary submissions to ASIC papers on regulating digital financial advice; and submissions on equity crowdfunding, and we know how long that's taken to amble its way through the parliamentary chambers, but whether it gets through is another question. They also had to provide a submission on a discussion paper on the GST treatment of digital currencies; a submission on the exposure draft legislation on GST treatment of digital currencies; an initial submission to the Productivity Commission report on data availability and use; a submission to the ACCC regarding collective bargaining with Apple; a submission to the draft Productivity Commission report on data availability and use; a submission to the Australian Treasury on the open banking inquiry; a submission on screen scraping to the Australian Treasury open banking inquiry; a submission on opening banking implementation earlier this year; a submission on non-ADI lender rules, which we are discussing now; and a submission by them and some others on changes in relation to skilled migration use. I could go on. I won't detain the House further, but that is the list of submissions that have been put forward. They're doing a huge amount of work. They expect the legislation to get through and what happens?

I mentioned equity crowdfunding. The second group of laws that were put forward in relation to that were introduced to this place in September last year by the Treasurer to fix up a set of laws that we urged him not to put through because they would be too cumbersome. He didn't do it. He put those first laws through and then came back, only mere months later, to put another set of laws through to change equity crowdfunding, as a way to help smaller businesses and start-ups get access to capital. He hasn't even had the wherewithal, despite regular needling by the opposition, to put it on for debate in the Senate. It won't even go to the Senate this week. What'll happen is we'll come back in September to debate laws that were introduced last September. That's fin-tech reform Scott Morrison-style—the Treasurer's style.

In terms of the regulatory sandbox arrangements to allow fin-techs to explore the development of new products and services without the heavy regulatory approach that is normally accustomed or expected in the delivery of these financial services products, when the initial arrangements were announced in 2016, in a blaze of glory, they discovered that they weren't such a smash hit. In fact, only four fin-techs used the arrangements. The government was then forced to reform those arrangements in legislation brought to this place earlier this year. Where's that legislation? Again, it's stuck in the Senate. It is not being debated this week, and we'll come back in September to debate it.

We also had, for instance, the comprehensive credit reporting arrangements stuck for ages, in terms of consultation. There was no end in sight to the consultation process. Then, suddenly, it's brought in, and the government fails to acknowledge that a separate piece of work in relation to the Attorney-General's review on hardship provisions—which is pretty important in terms of credit history and those people who may have suffered poor credit history because of hardship that they've experienced, and how that would be contemplated within a new regime—hasn't been finished, this area of review by the Attorney-General's Department. We are then pressured to support a regime absent hardship provisions, because the government can't do its homework properly in relation to that element of reform. Again, it is very important to the fin-tech community that this comes through and, again, it was stuffed up by the government—addicted to announcement, deficient with delivery. We often get this in this space.

The other thing that has been raised with me is that announced with a flourish earlier this year was a UK-Australia fin-tech bridge that's supposed to allow for greater cooperation between the UK and Australia in supporting the activities of fin-techs in our respective nations. On paper, that sounds like a great idea. But what's happening now is that fin-tech firms are raising with me their concerns that this is ushering in a period of what they have characterised as 'digital recolonisation'. The fin-tech arrangements in the UK are very well established, and the firms are growing very strongly. In our case we haven't had either time for local fin-techs to mature or a supportive regulatory framework to encourage maturation. What will likely happen is that, if we harmonise our arrangements with the UK, particularly in terms of open banking—and I understand, for instance, that there are key officials in Data61 that are guiding the development of our own open banking arrangements—

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