Fintech fury, startup confusion over empty budget

Joseph Brookes
Senior Reporter

Australia’s fintech industry group has slammed the government for failing to support the sector in Tuesday’s budget, while startups have labelled it “confusing” after not even rating a mention in the papers.

The pre-election budget contains almost no specific support for fintechs or startups but many will qualify for broader small business schemes, including a 120 per cent tax deduction for digital technology investments and employee training.

But the sectors were expecting more after flagging issues with talent and the roll out of major payment and data programs.

Fintech Australia boss Andrew Porter says the sector was overlooked in the budget

Fintech Australia, which represents hundreds of local companies, said Tuesday’s budget is a “grim outcome” for the emerging sector after almost all of its calls were not heeded.

“After years of close work with the federal government it’s a shame to see that the fintech industry failed to have really any of its key matters addressed in this budget,” Andrew Porter, the group’s new chief executive, said.

“The closest we came was a $38 million commitment to the rollout of the [Consumer Data Right] — $12.5 million per year till 2026. This funding won’t go astray, with many in the industry asking why solutions aren’t already in the market, and why this is taking so long.”

Mr Porter said at a “stretch” the Coalition’s new increased tax deductions for employee training and technology investments could be seen as helping early stage fintechs, but nothing in the budget will help the talent squeeze in the near term.

“Further training, and plans for retraining is admirable for the medium-term, but our sector will shrink and job growth will slow without an immediate response,” he said.

“The sector now has to assume that any changes regarding skilled talent visas are politically too tough for either party to enact going into an election. It’s a grim outcome for fintech and the broader sector.”

Startups have also been left out of the latest budget, according to Giant Leap partner Adam Milgrom. Giant Leap is a venture capital firm focusing on the startup sector.

“This is a confusing budget for the startup sector,” Mr Milgrom said.

“To start off with there isn’t even a mention of startups in the budget, once again the sector has been lobbed in with small business.”

Mr Milgron said some startup companies will benefit through the government’s new spending on wider programs like retraining, women in the workforce, and the NDIS, but there was “little” in the budget for startups not tackling these broader issues.

The startup community had been bracing for changes to open up access to technology talent through reforms of the skilled visa program, Kanopi chief executive Nigel Freeman-Fellowes said.

“It’s the one problem that the federal government can easily solve for the sector, in streamlining the Skilled Visa process for tech workers,” he said.

“Indeed there were a number of changes to visas outlined tonight, but the tech sector sadly did not get a look in. It’s a shame as it leaves startups in a holding pattern until more local talent is trained — which could take years. Some startups simply won’t have the capital to hold out of it, so there is a real risk that a lack of action will cost future jobs.”

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