Government not delivering on crowdfunding: Bowen

Australian Shadow Treasurer Chris Bowen has said that despite the hype, the government has not made sourcing crowdfunding in Australia any easier.
Written by Josh Taylor, Contributor on

The federal government is talking big on unlocking crowdfunding in Australia, but has yet to make it any easier, according to Shadow Treasurer Chris Bowen.

For months the government has discussed the removal of regulations that make it difficult for new companies to use crowdfunding to gain investment or new projects.

In a paper released late last year, the government identified that companies could only obtain funding from wholesale investors via managed investor schemes, or use a small-scale personal offer exemption and an Australian Securities and Investment Commission (ASIC) class order to be exempt from the regulation.

The Budget released earlier this month provided AU$7.8 million to ASIC to implement and monitor a new regulatory framework to facilitate crowdfunding as part of a small business package to foster Australians to "have a go", and start businesses in Australia.

Bowen, delivering his Budget reply speech at the National Press Club on Wednesday, said that the government had been "sitting on a report" from the corporations and market advisory committee since May last year and had not done anything on crowdfunding.

Bowen said his parliamentary secretary, Ed Husic, had been consulting the sector both in Australia and the United States, and has suggested legislative changes based on his consultation.

Last week, it was reported that Communications Minister Malcolm Turnbull had blamed "the culture and bureaucracy of the Treasury" for a delay in releasing details about removing the hurdles for crowdfunding.

Bowen said the government should stop blaming Treasury and fix the problem.

"Who's running this show? Malcolm Turnbull [is the] communications minister, he said it's all caught up in Treasury ideology, don't want to do anything about it," he said.

"Stop blaming Treasury and start fixing it. We're again, happy to facilitate, happy to support anything sensible in crowd source funding in a bipartisan funding, because the sector needs certainty.

"If it can be done in a bipartisan way we're all for it, but in the absence of that we've put out our own ideas about how to deal with crowd source funding."

He said that most startups will fail but "that's how the system operates". The overall benefit to the economy would be worth the change.

"Those who succeed, succeed very well. A good thing for the country generating lots of jobs, lots of wealth for entrepreneurs, and lots of jobs for people working for them. The multiplier effect here is the highest of any economic activity," he said.

"Five jobs for one, that's an impressive multiplier. That's why it's central to our economic agenda."

Bowen said that if Labor is elected at the next federal election, it will work in partnership with Australian entrepreneurs through a Treasurer's Entrepreneurial Council that will allow Treasury officials, and relevant government ministers to work with the entrepreneur community.

"Australia does need an extra dose of entrepreneurial spirit. We need to embark not on an attack on the age of entitlement, but more positively spark an age of entrepreneurship," he said.

"The startup community has welcomed the heightened awareness that has come from both sides of politics acknowledging their value in both the Budget and the Budget reply. But we can't risk this becoming a passing fad. Their work and the imperative for our country to embrace greater investment in innovation must become embedded as a national priority."

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