Senator Andrew Bragg urges ASIC not to curtail buy now, pay later business

NSW Liberal Senator Andrew Bragg is set to raise the stakes in the debate over regulatory scrutiny of the fast-growing buy now, pay later industry.

NSW Liberal Senator Andrew Bragg.

NSW Liberal Senator Andrew Bragg is set to raise the stakes in the debate over regulatory scrutiny of the fast-growing buy now, pay later industry, saying it is critically important that innovation isn’t “hacked to death by random regulatory reviews”.

Senator Bragg, chairman of the Senate select committee on financial technology and regulatory technology, will also urge the nation to improve its positioning as a regional financial centre in a StartUp Aus speech on Friday.

“With so much unsophisticated commentary on China, I want to be clear: Hong Kong will always be an important gateway to China but recent turmoil there means it just doesn’t have the same attraction for many international businesses,” he will say.

“Executives with international business careers will not want to be subject to the national security law which now applies in Hong Kong.

“It would be an opportunity lost if we sat idly by and allowed such a lucrative share of the market slip to Singapore.”

The speech is likely to burnish Senator Bragg’s credentials as a strong advocate for the fintech sector.

Despite this, he also believes the sector should not be ringfenced from takeover by the major banks.

“The normal rules should apply,” he told The Australian on Thursday.

“That way, the banks are less likely to have a ‘Kodak moment’, which would not be in the national interest.”

On the BNPL industry, Senator Bragg reaffirms his position that he doesn’t want innovative companies “held to ransom” by regulators like the Australian Securities & Investments Commission.

ASIC, he will say, should enforce the law, not “pontificate on policy”.

The commentary is timely, given ASIC’s report on the BNPL industry earlier this week.

The report declined to push for more consumer protections, despite figures showing that one in five users had missed payments in the 2019 financial year, and a similar proportion had given up essentials so they could make their payments on time.

“I want to see ASIC enforce the law, not pontificate on policy,” Senator Bragg will say.

“Certainly, I don’t want to see ASIC inflict damage on the market which risks undermining innovation and choice.

“Earlier this week, ASIC reported on buy now, pay later, highlighting relatively low late fees.

“While I think ASIC did a good job to stay in its lane, it barely mentioned the competition benefit of this new industry.”

Senator Bragg will note that eight of the 32 recommendations made by his committee in an interim report were adopted immediately in the last month’s federal budget.

“By endorsing these recommendations, (Josh Frydenberg) has created an immediate pathway to achieve our goals,” he will say. “Firstly, $800m will go towards enabling businesses to take advantage of digital technologies to grow businesses and create jobs. This includes important changes to the R&D tax incentive, which has been championed by StartUp Aus.”

Recommendations on digital identity, the consumer data right and fringe benefits tax were also adopted.