The Federal Government has revealed its response to the Financial System Inquiry this morning. It includes provisions for crowdfunding, and the announcement included a promise for legislation around crowdfunding before the end of the year. The legislation is promised to include support for crowd sourced equity funding and debt financing, as well as access to government data.
In its response the government says the development of a crowd sourced equity funding market in Australia is an urgent priority to support the funding needs of early stage innovators.
It will consult on draft legislation to implement this framework before the end of 2015.
As we pointed out earlier this year, a there is a crowdfunding revolution already taking place in Australia.
Equity crowdfunding, where investors get a slice of the business rather than a promise of a product, does already exist in Australia, through companies like VentureCrowd. However, rules regarding who can invest have limited participation in these platforms to a “couple of thousand” investors.
Equity crowdfunding has already gained traction in other countries, notably in New Zealand.
Following on from this weekend’s policy hackathon, the Government is also promising more input in the development of policy. This will take the form of a “Innovation Collaboration committee” to engage start-ups.
“We will establish a public-private Innovation Collaboration Committee to give innovation champions a direct voice to contribute to the development of policy,” the response reads.
“We will develop a plan to ensure that our laws and regulations are technology-neutral. When implemented, this will have a major deregulatory impact.”
The government is also investigating opening up the vast sources of government data to entrepreneurs.
“By better using available data firms can identify new opportunities, develop innovative products and lower costs. We will task the Productivity Commission to examine the scope to broaden access to, and use of, data. We support current industry efforts to expand data sharing under the new comprehensive credit reporting regime rather than through legislation.”
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