Budget Wrap Up

Written by Kristine Vergara, for UTS Business Society.



There were several implications for start-ups in the Budget 2018 announcement made in May 2018 [1].


Research & Development (R&D) Tax Incentive

The Government has supported Australian innovation and research through the R&D Tax Incentive. A review of this incentive found that the program in its current form did not help support additional research and development with further flow on benefits for the Australian economy. The following changes to the R&D Tax Incentive will take effect from 1 July 2018:

  • The Government will put in place further measures for companies with a turnover of $20 million or more to help ensure that larger companies undertake additional high-intensity R&D to continue to be eligible for this incentive.
  • A cap of $4 million will be enforced on cash refunds to companies eligible for the incentive. The R&D tax offset will also be converted to a premium above each eligible company’s tax rate.
  • There will be a focus on better administrative and compliance processes for the incentive.

The above measures will aim to ensure the sustainability, transparency and integrity of the incentive going forward.


Consumer Data Right

The aim of the Consumer Data Right is to give consumers further control over their personal data and the latitude to determine which businesses have access to their data by opting in to provide personal data only with trusted companies. Trusted companies with approved access to the personal data of consumers will be encouraged to use this information to create comparison services and more innovative products. Sectors that will pioneer the Consumer Data Right implementation will be banking, energy and telecommunications.

The National Data Commissioner will be created to implement an efficient government data use framework by overseeing the Government data system, monitoring the integrity of the system and collaborating with the community.

Further innovation of consumer products through data-driven methods will over time produce products in line with aggregated consumer demand.


AI and Machine Learning

The Government has pledged to support the development of Australia’s artificial intelligence and machine learning capability through the implementation of a Standards and Ethics Framework. The purpose of this initiative is to take a responsible and measured approach to increase the knowledge and develop skills in these fields.


Regulatory Update:

ACCC Digital Platform Inquiry [2]

The ACCC are continuing their digital platforms inquiry, which is assessing the impact of digital search engines, social media platforms and other digital content aggregation platform and its effect on competition in media and advertising service markets.

Digital platforms are an example of digital disruption taking hold of traditional industries with this change happening so fast that regulation has not been able to keep up with the pace. It will be important that regulators maintain a fine balance between their ability to regulate technology companies doing business in Australia and not stifling further innovation.

The ACCC will provide to the Treasurer recommendations arising from this inquiry in December 2018.


Neo-banks [3]

APRA has issued its first restricted banking licence to a fintech start-up called Volt Bank, Australia’s first digital bank or ‘neo-bank’. A restricted banking licence allows approved companies to conduct limited, lower risk banking business during its start-up phase. The restricted banking licence will operate for a limited period of time. Once this period has lapsed, companies can opt to be assessed to obtain a full banking licence, which is a much more rigorous process.

Under the restricted banking licence, Volt Bank will be able to accept customer deposits of up to $2 million in total. Products that Volt Bank will sell include transaction accounts, savings products and term deposits.  Volt Bank’s technology offering will aim to offer competitive rates and analytics to help customers optimise their savings and finances.

The benefit of neo-banks is the added level of competition it will bring to the Australian banking industry for consumers.


Hopefully you have found this update useful and informative. Stay tuned for the next article in a few weeks. Please leave any comments or queries below.



[1] https://www.budget.gov.au/2018-19/content/bp1/index.html

[2] https://www.accc.gov.au/media-release/accc-commences-inquiry-into-digital-platforms

[3] https://www.smh.com.au/business/banking-and-finance/volt-bank-first-to-get-restricted-banking-licence-20180507-p4zds7.html

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