SYDNEY: The Australian Investment Council welcomes the recommendations in
the Senate Select Committee’s interim report on Financial Technology and
Regulatory Technology released today.
“The Committee’s ability to pivot and respond to important policy and
regulatory issues on the back of COVID-19 has led to a comprehensive
assessment of the opportunity to unlock Australia’s FinTech and RegTech
innovation potential,” said Yasser El-Ansary, Chief Executive of the
Australian Investment Council.
“The FinTech and RegTech sectors are an important part of Australia’s
multi-billion dollar innovation ecosystem. These sectors will increasingly
play a significant role in delivering high-value economic output and new
jobs, and at the same time, deliver sizeable productivity gains across our
“Recommendations outlined in the Committee’s report provide clear direction
on what has to be done to deliver the economic opportunity in these areas
over the next few years. Some of the reforms identified in the report have
been on the policy agenda for some time, and it’s more important now than
it ever has been before that we prioritise the changes which need to
“The Council welcomes the Committee’s recommendation to implement a new
Limited Partnership Collective Investment Vehicle (CIV) to encourage more
investment into high-growth Australian businesses in FinTech, RegTech and
the broader economy. The existing out-dated framework for attracting
investment capital is out-of-step with other jurisdictions, which means
Australia misses out on offshore investment into our market because we are
not as competitive as other leading markets around the world.
Mr El-Ansary also said the Committee’s recommendation to widen access to
the Early Stage Venture Capital Limited Partnerships (ESVCLP) and Venture
Capital Limited Partnerships (VCLP) investment vehicles was an important
outcome of the report.
“Because Australia does not yet have an internationally competitive Limited
Partnership CIV, the ESVCLP and VCLP regimes play a critically important
role in supporting high-growth Australian business through venture and
growth capital investment.
“Broadening the framework for VCLPs and ESVCLPs and making them competitive
with other jurisdictions will be attractive to domestic and international
investors who are considering medium and long-term investments into
Australian businesses across a range of new and emerging sectors of the
economy,’’ Mr El-Ansary said.
Greater clarity and certainty on the tax treatment of software under the
Research & Development Tax Incentive (RDTI) regime was another
important recommendation in the report that would be helpful for all
technology businesses seeking to scale in Australia. However, Mr El-Ansary
said there was still work to be done.
“Introducing greater certainty for software development under the R&D
tax regime is vitally important for our innovation ecosystem because the
inconsistency which currently exists is holding us back from realising our
entrepreneurial potential in some areas.”
The Council has been a leading advocate for the major R&D regime policy
reform package proposed by Government to be paused indefinitely, given the
prevailing economic climate.
“The Government can deliver more certainty for our innovation ecosystem by
making a commitment to hold-off on implementing the proposed R&D
reforms contained in legislation before Parliament right now. Now is not
the right time to be constraining the capacity of Australian businesses to
innovate – we need innovation to help drive our economy out of recession,”
said Mr El-Ansary.
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About the Australian Investment Council
The Australian Investment Council is the voice of private capital in
Australia. Private capital investment has played a central role in the
growth and expansion of thousands of businesses, which when combined
represents a multi-billion-dollar contribution to the Australian economy.
Our members are the standard-bearers of professional investment and
include: private equity, venture capital and private credit funds,
alongside institutional investors such as superannuation and sovereign
wealth funds, as well as leading financial, legal and operational advisers.