The Government will introduce a number of reforms to boost competition & choice for Australian consumers.
Merric Foley, our Policy Manager, was on the ground in Canberra for the 2017 Budget, which contained a number of measures directly affecting the payments industry.
Of particular interest is new funding for Treasury to undertake an independent review into the most appropriate implementation model for an open banking regime, and funding for a commitment to build a federated digital identity framework, known as GovPass.
The House of Representatives Economics Committee inquiry in the Four Major Banks (the Coleman Report) recommended that an open data mandate is implemented in the financial sector. The open data mandate would require banks to provide open access to customer and small business data. The Government has accepted this Recommendation, and the 2017-18 Budget provides funding to commence implementation.
The Government has committed $1.2m in 2017-18 to the Treasury to undertake an independent review into the most appropriate implementation model for an open banking regime. Treasury will consider appropriate privacy and consumer protections. The budget speech indicates that the Government expects the new regime will commence sometime in 2018.
The Government has committed funding to build GovPass. The outline of the GovPass framework was announced by the Digital Transformation Agency (DTA) in March and includes a single Commonwealth identity, an identity exchange, and a set of accreditation standards for identity providers. $22.7m has been committed in 2017-18. The Government intends to link GovPass with its ongoing program to develop a biometric Facial Verification Service.
Both measures will be implemented over 2017 and 2018. AusPayNet will seek to work with Government to ensure that the implementation model safeguards the needs of an effective an efficient payments system.
The Government has announced a major new revenue measure, the ‘major bank levy’. The levy will apply to ADIs with liabilities of at least $100bn (indexed). The levy will be calculated at a rate of 0.06% of licensed entity liabilities per annum (0.015% per quarter).
The Government expects that this measure will raise $6.2bn over the next four years.
The Government has announced a number of new oversight measures in the budget, including the creation of a new Banking Executive Accountability regime. The new Regime will include a requirement that senior executives and directors register with the Australian Prudential Regulation Authority (APRA). Banks will be required to monitor the suitability of their executives to hold senior positions.
A new body, the Australian Financial Complaints Authority (AFCA), will be established. AFCA will act as a dispute resolution centre for all financial disputes.
In a move which it says will offer greater protections to consumers, the Government is introducing a new round of credit card reforms. The Government will require that affordability assessments be linked to consumer’s ability to repay the credit limit, ban unsolicited offers of credit limit increases, change how interest is calculated and require online options to cancel cards or reduce limits.
A package of measures is designed to position Australia as a world-leader of FinTech. Of interest to the payments industry, this includes the extension of the ASIC regulatory sandbox from 12 to 24 months.
Click here for more details on the Treasurer’s 2017-2018 budget.