Labor MP Husic urges government to act on equity-based crowdfunding regulation
Federal Labor MP Ed Husic has called on the federal government to introduce equity-based crowdfunding regulation as quickly as possible. Mr Husic, expressed concern that businesses were leaving Australia for more favourable regulatory environments such as New Zealand, while the government considered reform.
“The government has failed to meaningfully respond to calls for reform of the regulatory environment around crowd-sourced equity funding – a platform that is providing access to valuable, much-needed capital for start-ups,” Husic told Parliament.
“For now, I’m very mindful that the sector is demanding of this government a formal statement on where it is at in developing this framework. They’re seeing colleagues leave Australia and head to New Zealand because there’s a more accommodating regulatory environment there.
The government indicated in its Industry Innovation and Competiveness Agenda that the assistant Treasurer will consult widely on a regulatory framework to facilitate crowd-sourced equity funding, to build on the Corporations and Markets Advisory Committee’s (CAMAC) report.
That report was released in June and recommended the government make it easier for Australian businesses to raise capital through online crowdfunding platforms. It said that the government should change the legislation to allow all Australian to invest in companies through equity-based crowdfunding, albeit with a limit on retail investors of $10,000 per year and $2500 per start-up.
“The concern that start-ups have expressed if those types of limits are imposed is that it wouldn’t really raise the type of money that, in some cases, start-ups need to access for the whole exercise to be viable,” he says.
“While numerous ministers have told us how they’re big fans of crowd-sourced equity funding, we haven’t seen a response to the Corporations and Markets Advisory Committee report proposing a way ahead for this funding platform,” Husic says.
Mr Husic’s concerns are the delay on legislation, plus the CAMAC report’s recommendations, including limits on retail investors, are too conservative.