Budget Night 2019: The view from payments
By Merric Foley, Policy Manager at AusPayNet – 3 April 2019
With respect to payments, the 2019 budget focuses on the execution of existing policy initiatives. In contrast to the 2017 and 2018 budgets which included the Review into Open Banking and the Final Report of the Black Economy Taskforce, it does not contain any major new announcements.
In particular, last night’s budget includes a number of funding announcements of interest.
Government Response to the Financial Services Royal Commission
On February 4, the Government released the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry alongside its response.
The Government has committed $600m over the next five years to implement its response to the Recommendations.
Relevant items include:
- Bolstering compensation schemes. This includes:
- an industry-funded compensation scheme of last resort for consumers and small business ($2.6m)
- additional funding for the Australian Financial Complaints Authority to establish a historical redress scheme ($2.8m)
- compensation owed to consumers and small businesses from legacy unpaid external dispute resolution determinations ($30.7m)
- Additional resourcing for the regulators. ASIC has been assigned an additional $404m over the next four years, and APRA has been provided with $145m over the same period. As previously announced, a new body, still to be defined, will provide oversight to APRA and ASIC, with $7.7m provided over three years for its establishment.
Expansion of the Fintel Alliance
The Government has committed $28.4m over the next four years to AUSTRAC in order to expand the Fintel Alliance. Launched in 2017, the Fintel Alliance is “a world-first private-public partnership to combat money laundering and terrorism financing” – bringing together law enforcement agencies, regulators and the banking and financial sector.
This funding will be directed to both the Operations Hub and Innovation Hub. The Operations Hub will focus on increased joint intelligence activities, understanding operational risks and reporting feedback and effectiveness of activities. The Innovation Hub will test new intelligence-sharing capabilities and alerting technology.
The cost of the funding will be offset by an increase in the Australian Transaction Reports and Analysis Centre Industry Contribution levy.
Other Measures
A number of other notable measures were also included in the budget.
To help facilitate timely responses to privacy complaints relating to social media and other online platforms that breach privacy regulations, the Government has provided additional funding of $25m over the next three years.
Additionally, the Government has allocated a further $128m to extend the cashless debit card trial for another four years. This will include enhancements to the underlying technology – including allowing interest to be calculated and paid on funds accrued in cashless debit card accounts from 1 July 2019.
Next Steps
If the Government is returned, it will seek to pass the announced measures; the Opposition has promised that, if elected, it will bring an economic statement in the third quarter of the year.
