Believe it or not, the current US Presidential nomination process has thrown up a passionate debate about the nature of money, and particularly whether it is 'sound' or not. Voters are frustrated and fearful about the economy. Politicians (with no economics training) are arguing that in these uncertain times we need a currency backed by something 'real' like gold. This seems oddly backward-looking in the era of the internet. It begs a question: what sort of money do we need to fuel the economy of the 21st century?
In recent months, the Commonwealth Government has announced a number of initiatives that touch on the world of payments. We are pleased to be working in a collaborative capacity with the government on the topics outlined below.
If you would like to know more about our activity in any area, please get in touch.
The Black Economy
In December 2016, the Australian Government announced the establishment of a taskforce to investigate the role of the black economy in Australia.
One of the focus areas of the interim report, released to coincide with the 2017-18 Budget, is the role of cash in the black economy. The report looks at emerging digital trends such as mobile payments and biometrics and suggests that these can play a positive role in bringing greater levels of traceability to the economy. The taskforce is investigating ways to encourage more businesses to move away from cash, including tax incentives for small business to move off cash, the role of crypto-currencies, and the potential for a ceiling on cash payments. The final report is due October 2017.
Discussion around data and open banking links to two separate inquiries – a Parliamentary inquiry into the banking sector, and an independent Productivity Commission review of Data Availability and Use. The 2017-18 budget speech included an announcement of an intention to introduce an open banking regime in 2018.
In late 2016, the Parliamentary inquiry into the banking sector made a number of recommendations about the regulation of the Australian financial system, including mandating an open banking framework. Additionally, the inquiry recommended another review of account-switching after the implementation of the New Payments Platform.
Alongside the 2017-18 budget, Government announced that it would adopt almost all of the Committee’s Recommendations. Treasury is undertaking an independent review into an appropriate model for introducing open banking. AusPayNet expects that terms of reference and details of this review will be available in the coming weeks.
A separate Productivity Commission inquiry into open data in Australia was launched in early 2016. The Final Report was released in early May, and recommends the adoption of an economy-wide open data framework, with standards to be set by each industry. Government has established a cross-agency taskforce to develop a formal response to the Report.
The Digital Transformation Agency (DTA) has received $22million to build a trusted framework for identity verification. Known as GovPass, the project aims to make it easier for customers to prove their identity to the government. Users will be able to verify their identity by having an accredited organisation vouch for them.
Cashless Welfare Cards
The Australian Government has announced expanded trials of a Cashless Debit Card. The card will operate as a regular bank card, but it cannot be used to withdraw cash, and will have restrictions placed on its use at venues that sell alcohol or gambling products. While the amount a person receives in welfare will remain unaffected, the program will create a split so that 80% of funds are paid onto the cashless bank card, with the remaining 20% of funds to a regular bank account.
A Clear Government Agenda for Payments
The Australian Government’s policy agenda has a clear impact on the payments industry. To explore the implications of these policies for the payments industry, AusPayNet continues to meet with relevant Government agencies, taskforces and policymakers. By proactively working with policymakers and regulators, AusPayNet is well-placed to ensure that policy outcomes support an effective and well-functioning Australian payments system.