The representative body for financial tech startups, FinTech Australia, has defended itself against accusations from a Labor MP that it is a Coalition government lackey.
Shadow minister for the digital economy Ed Husic ripped into the organisation in parliament this week for supporting the government’s equity crowdfunding reforms, saying it was surprising “how badly the start-up community has been let down by representatives of the start-up community themselves”.
The debate is centred around the fact that only unlisted public entities can get access to crowdfunding under the new rules, and how this excludes the majority of startups, which are small proprietary companies. Husic is critical of the exclusion, while FinTech Australia came out in support of the reforms.
He said FinTech Australia “hardly raised a peep about this massive barrier that will prevent so many of their members accessing equity crowdfunding” and accused it of being under the government’s thumb after receiving a $200,000 grant last year.
“Maybe the government has muzzled FinTech Australia with the usual conditions a coalition attaches to funds. Who knows?” he said. “FinTech Australia need to ask themselves, are they properly representing the interests of members?”
In response, FinTech Australia released a statement to declare its political independence, citing its recent lobbying on topics like the R&D tax incentive and the nature of the ASIC regulatory sandbox.
“If we think a proposal hurts the fintech industry, then we will state it – irrespective of its origin,” the organisation stated. “Equally so, we will express support for policies, such as the equity crowdfunding legislation, which helps the Australian fintech and broader community.”
It defended its support for the crowdfunding reforms, saying that it would have been “a bad outcome” to delay the allowance for public companies while ways to give private businesses access were still being worked out.
“We of course strongly support the legislation being extended to private companies and urge the government to expedite this work,” stated the organisation.
“We have repeatedly argued that any form of cooling-off period – two or five days – could lead to people trying to unethically manipulate the equity crowdfunding market. However, we support the amended legislation as a necessary compromise to introduce equity crowdfunding to Australia.”
The $200,000 grant was used to promote Australian fintech businesses internationally, which FinTech Australia said should have bipartisan support.
The group extended an olive branch to Husic, saying that it was a “strong supporter” of his advocacy for the startup community, and hoped to “work more closely with him” to get private companies access to crowdfunding.