Shadow minister for the digital economy Ed Husic has had a crack at the finance sector lobby group FinTech Australia for its outspoken support of government’s dodgy equity crowdfunding bill, calling into question the group’s independence.
FinTech Australia received $200,000 in federal funding last year, and Mr Husic says this may have “muzzled” the group, stopping it from criticising government policy.
“Maybe the government has muzzled Fintech Australia with the usual conditions a Coalition attaches to funds. Who knows? We demand to know what constraints the Turnbull government has forced upon Fintech Australia,” Mr Husic said in Parliament last week.
Mr Husic pointed to FinTech Australia’s broad support of the government’s highly controversial equity crowdfunding bill, saying it had let the startup community down.
“The government has … let down the startup community badly with this bill. What is more surprisingly is how badly the startup community has been let down by representatives of the startup community themselves – Fintech Australia,” he said.
“It is clear that no logical person could argue for what Fintech Australia is arguing. They have simply been intimidated into the position,” he said.
The government’s crowdsourced equity funding bill passed both houses a week ago, allowing unlisted public companies with annual turnover and gross assets of up to $25 million to participate in equity crowdfunding.
In response, FinTech Australia welcomed the bill, saying it would “provide a major new avenue to allow companies to grow and create jobs” and only criticised the five-day cooling period which was added by the Opposition.
Mr Husic’s anger at the group stems from it not taking aim at the bill’s most controversial aspect – the clause requiring all companies accessing the scheme be unlisted public entities. This effectively shuts out 99 per cent of Australian companies from the process.
“[FinTech Australia] hardly raised a peep about this massive barrier that will prevent so many of their members accessing equity crowdfunding. Not a word.”
“There was nothing about their members being prevented from accessing crowdsourced funding, but they were big on weakening investor protection,” he said.
The government has claimed it will be consulting with stakeholders – including Fintech Australia – on amending the bill this year to include private companies.
Fintech Australia CEO Danielle Szetho hit back, calling at Mr Husic’s accusations “unfair and inaccurate”.
FinTech Australia received a $200,000 federal government grant in last year’s budget for an “international PR campaign” to promote local fintechs on a world-stage. The first element of this campaign involved a fintech delegation to Indonesia, with Jack Quigley speaking on CNN and an op-ed written by Airwallex featuring in The Jakarta Post.
“We have very, very clear pre-agreements about what the funding was to be used for and that was for an international PR program supporting the visibility and promotion of our startups and policy overseas so we can make it clear overseas that we’re doing work to make this a good Fintech environment,” Ms Szetho told InnovationAus.com.
Ms Szetho said the government funding is for a specific program, and the organisation’s lobbying efforts and general operations are entirely funded by its members. Membership of FinTech Australia costs $250 for founders, $1000 for companies with fewer than five employees and $10,000 for companies with more than 30 full-time employees.
The organisation also received $300,000 from the Victorian government – from the state’s $60 million LaunchVic fund – to run a two-day FinTech conference and to assist with the development of a fintech strategy.
It’s sure to raise more questions over FinTech Australia’s independence and lobbying efforts, but Ms Szetho said the government money won’t be influencing its operations.
“Our advocacy on the domestic policy front is funded by our members – the startups – and we’re beholden to what they want,” she said.
Ms Szetho also took issue with FinTech Australia being referred to as a lobby group, instead framing it more as an advocacy group working with regulators more than the politicians it is receiving funding from.
“I’m not sure we’d call ourselves purely a lobby group. If we were spending our time meeting with and trying to convince people like Ed [Husic] of the things we’re doing, we probably wouldn’t getting as much done,” she said.
“We spend the majority of our time engaging with the regulatory community rather than the politicians themselves. We help our members create a single voice, advocating for change, but we don’t spend time in Canberra talking directly to politicians.
“We haven’t spent our scarce resources on speaking to politicians.”
It’s a very similar conflict to another feud between Mr Husic and peak startup body StartupAUS last year. Mr Husic was again critical of the lobby group taking $360,000 in funding from the government, the group it is meant to be lobbying.
“I am always suspect about funds being granted to groups in this way: it prevents them from doing the proper job of speaking up on behalf of the people they should be representing,” Mr Husic told Parliament.
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