The Minister for FinTech discusses the COVID-19 recovery for startups and scaleups with Stone & Chalk
1st May 2020
Stone & Chalk hosted a fireside chat with our CEO Alex Scandurra and The Minister for FinTech Senator Jane Hume. Alex discusses with Jane the Governments’ response to COVID-19 and the road to recovery. Link to the recording is included below.
Diverse product offerings, tremendous organic growth, impressive maturity, collaboration and being globally focused are the attributes of the unique local ecosystem according to Jane. She believes the ecosystem is perfectly placed to become a leading export growth sector and points to the 2019 FinTech 100 rankings. The rankings included Afterpay, Airwallex, Athena, Daisee (a Stone & Chalk resident), Judo Bank, Sempo and Slyp from Australia.
Jane said her priorities prior to COVID-19 were to boost investment, skills, adoption and the regulatory system but recognises this has been delayed due to COVID-19.
Government response
Jane recognised that it has been a very difficult time with low availability of capital, falling demand, short runways and that this will continue for some time.
For startups that do not qualify for JobKeeper, Jane highlighted other support measures such as PAYG cash flow boost, low interest loans, PAYG and FBT deferral, instant asset write off, accelerated depreciation, ASIC assistance and payroll tax waivers. Alex recognised Jane had done a tremendous job fighting for startups and that without her there would not have been amendments to JobKeeper. Jane thanked Stone & Chalk for its feedback which had been invaluable in shaping the Government response and for playing their part in Team Australia by stepping up to offer a 3-month waiver of fees for residents.
A poll of startups and scaleups that was conducted during the fireside chat, found 63% believe they qualify for JobKeeper whilst 22% do not qualify and 15% were unsure. If you are also unsure if you qualify, take a look at the resources we have put together in collaboration with the Senator and speak with your accountant.
Recovery
The most important question now according to Jane as we approach the recovery phase is what do we want to look like. She believes it is an opportunity to reshape and we are going to need a high growth economy.
Jane is looking to expand the UK-Australia FinTech Bridge to Singapore and explained that Australia is well placed as a test bed for FinTechs in Asia entering western markets due to our banking system and demographics.
Jane is adamant that the Government will be pressing on with implementing CDR, which is on track for July 1st, because it has never been a more important time to empower customers and boost competition. The CDR 2.0 Enquiry has been extended until 21st May and Jane calls on anyone interested to contribute to submissions.
Alex asked Jane about private sector early stage investment and Jane pointed to the access for smaller lenders to the $15 billion and is looking at how more support can be unlocked. Her work has included looking overseas to ensure we remain competitive in a fluid marketplace where startups could choose to operate in other countries. Jane wants to focus going forward on collaboration, commercialisation and maintaining the skills pipeline and points to the Stone & Chalk Academy as an initiative that should be encouraged.
Jane suggests keeping an eye out for the October budget which will be an opportunity to lay the foundation for a more efficient and free flowing economy that we will need to create the high growth economy we require. Alex said he intends to continue working closely with Jane to recommend measures such as structural changes to R&D tax incentives and encouraging investment in early stage businesses.
In response to a viewer question about opportunities for superannuation, Jane said that the silver living was the new level of engagement and the opportunity to build on that. Jane also suggested she would be looking at how gamification and CDR could be applied to superannuation and was open to the option for investing in startups through superannuation but would never mandate it.
The final message from Jane was that despite the doom and gloom, it is encouraging to see positive news from Airwallex and Zinja and that Australian FinTech is very much open for business. Jane acknowledges that some will be feeling the pain and asks those to hang on as she is working behind the scenes to make sure there is as much opportunity as possible. If you have any questions or feedback you can get in touch with Jane through Stone and Chalk.
Watch the full fireside chat here.
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