News Pulse for June 15, 2018

A daily download of SME, startup, fintech and tax news from around Australia.

Low wage growth is not just harming you, it’s threatening the economy

This week Reserve Bank governor Philip Lowe made it clear the central bank is worried about Australia’s low wage growth.

Not only is it putting a brake on economic growth, but the governor said it is also threatening our “sense of shared prosperity”.

It is an issue many families can relate to — a sense that you are working harder than ever but it is still not enough to meet the cost of living.

Xero evolves to fit a changing marketplace

A new tagline is the beginning of Xero’s evolution from a pure accounting software supplier to a more holistic small business platform, a move, it says, is vital in a changing market.

This week Xero announced a global brand update, introducing a new tagline ‘Beautiful business’, which was tested both internally and externally before launch.

Westpac changes SME lending following royal commission

Following numerous revelations at the recent banking royal commission, Westpac has announced that it will stop accepting consumer home loans for predominantly business purposes.

Under Westpac Group’s updated consumer credit policy, consumer mortgages (including loan top-ups) will not be accepted if more than 50 per cent of the new loan is expected to be used for business purposes.

The update comes into effect on 18 June, and changes will be made to the ApplyOnline platform to prevent business purpose loans from being submitted from 19 June.

Prospa IPO farce scuttles founders’ payday

Colour us shocked, but it turns out the very week a Royal Commission looks into small business lending while ASICAustralian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator. asic.gov.au conducts a review of the sector isn’t the best time to float a fintech offering unsecured loans with sky-high interest rates to small business customers.

Prospa’s hasty IPO postponement last week , conducted a staggering 15 minutes before shares were due to start trading, followed an ASICAustralian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator. asic.gov.au query coupled with a growing wave of discomfort over its business model and valuation. The last-minute decision will by now have properly sunk in for its founders and VC backers, and we bet it’s sombre days at Prospa HQ, where the company’s high-level staff had been in line to split a free 300,000 IPO share bounty on 30 June 2019.

Blockchain startup Civic Ledger is Australia’s new Emerging FinTech Organisation of the Year

Civic Ledger, a blockchain startup, has been named Australia’s Emerging FinTech Organisation of the Year at the 2018 Finnies, the annual fintech industry awards.

Katrina Donaghy, co-CEO and co-founder of Civic Ledger, who accepted the award Wednesday night, says the company is focused on using blockchain to improve people’s interactions with government.

Fintechs tell Labor a credit report delay will entrench bank power

Labor’s push to delay a law requiring the major banks to put more customer data into credit reports will entrench the big four’s market dominance and keep the cost of personal loans unnecessarily high, five of the nation’s leading marketplace lenders have said.

In a letter to shadow treasurer Chris Bowen, the CEOs of SocietyOne, RateSetter, MoneyPlace, Harmoney and WISR said a further delay to mandating big bank participation in the ‘comprehensive credit reporting’ (CCR) regime will “continue to entrench a fundamental competitive imbalance between the big four and other lenders”.

Senate hears ‘dictatorial ATO’ should be split in two

Ken Phillips, a small business owner and executive director of Self-Employed Australia, told the Senate’s Legal and Constitutional Affairs Legislation Committee in Sydney today that the ATO Australian Taxation Office’s current breadth of powers are akin to a dictatorship.

“The tax commissioner has the power of a dictator, and if you have dictatorial power, it will be abused,” Mr Phillips said.

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