FinTech Australia has urged the Australian federal government to explicitly include digital technologies—such as artificial intelligence (AI), cybersecurity, and fintech innovations—within its ongoing Strategic Examination of Research and Development (R&D). The organization cautions that emerging digital sectors could be inadvertently excluded from future innovation funding if traditional industries remain the primary focus.
Concerns Over Narrow R&D Focus
In a submission to the review’s expert panel, FinTech Australia highlighted concerns that the government’s current emphasis on defence, health, agriculture, energy, and resources could marginalize digitally-driven industries. CEO Rehan D’Almeida noted that while technology underpins all sectors, fintech includes world-leading innovations unique to Australia that may not qualify for the R&D Tax Incentive under the proposed framework.
The R&D Tax Incentive is a crucial support mechanism for startups, providing refundable offsets for small businesses and non-refundable offsets for larger companies. In the 2022–23 financial year, over 6,000 small businesses applied, with an average claim of $403,232. FinTech Australia warns that a narrow focus risks undermining Australia’s competitiveness in the global digital economy.
Recommendations for Inclusive R&D Policy
- Explicitly recognize digital technology (fintech, AI, cybersecurity) as a national focus area.
- Modernize the R&D Tax Incentive to reflect software-led, agile innovation.
- Introduce sector-specific eligibility criteria for high-growth digital startups.
- Reform the Early Stage Venture Capital Limited Partnership (ESVCLP) program to boost domestic capital formation.
- Ensure enabling sectors like fintech are not crowded out in funding allocations.
- Maintain predictability and simplicity in R&D policy for long-term planning.
Supporting Australia’s Digital Innovation Ecosystem
FinTech Australia represents over 400 companies nationwide and works to foster a thriving fintech ecosystem by advocating for supportive policy, promoting innovation, and enhancing collaboration between startups, industry, and government. The organization urges policymakers to implement these recommendations to ensure the R&D Tax Incentive continues to support innovation across all sectors, including the rapidly evolving digital technology landscape.
