First, I think we need to do a recap of the last decade of the Australian economy.

To begin with, we went through a mining boom that is often referred to as “once in a generation”, housing prices have increased rapidly, and productivity growth has been relatively stagnant and lower than the productivity growth rates achieved in the late 90’s and early 2000’s. However, over the last five to six years, the mining boom has started to peter out and our standard of living is declining at an increasing rate. In addition to this, the steady increase of housing prices has led to a redirection of capital. Banks are handing out increasingly high amounts of capital in the form of mortgage.

Unfortunately for the Australian economy, housing isn’t a very productive asset. By placing large amounts of capital into the Australian housing market, it has increased rates and decreased the available funds for the most productive use of capital, Business.

So what does this mean?

It means our government has to think of a plan to “pick-up” the Australian economy or at least break the fall; there is no doubt that our standard of living is going to decrease, but the Government is gearing up for damage control.
Enter Turnbull. The government and the coalition understand the situation they are in, they’ve been rather slow addressing the issue for the last few years and have been heavily relying on the strength of our exports. However, as the election clock ticks, the Government is growing increasingly weary of the gloomy future of the Australian economy.
Turnbull proposes to implement several changes within the Australian business landscape to ignite this “ideas age” or a re-focus towards business and innovation over minerals. This proposal includes relatively straightforward but relevant policy changes, like a shift from the original three-year bankruptcy period to a one-year bankruptcy period. It also includes investment into research, approximately $150 million per year, something that was lacking throughout the Abbott government.
Turnbull also looks to decrease the heavy cost and risk of start-ups by offering a tax off-set for angel investors, and developing an entrepreneur visa to attract qualified professionals to Australia.
The most relevant policy change for Marketlend is the establishment of new laws that enable crowd-sourced equity funding with a turnover and gross assets of less than A$5 million. Albeit Marketlend is not an equity funder, it does offer trade credit in a similar debt crowdfunding or peer to peer lending methodology.  Investments will be limited to a maximum amount of $10,000 per company, per year. This is a direct acknowledgement of the growing efficiency and opportunities that crowd-sourced financial technology can establish.

Marketlend sees the advent of more businesses being able to obtain equity, a positive incentive to growth of the trade credit market, because these businesses will  need working capital or debtor finance solutions. As Marketlend’s platform offers both working capital, and debtor finance solutions. Particularly, the Marketlend platform is able to offer debtor finance for the buyers of startup businesses if the buyer is approved by Marketlend’s insurer. A growth in this market means a growth in Marketlend if it can obtain a share those opportunities.

Overall, the changes that the Government is proposing are a step in the right direction. However, many more steps are needed to pick-up Australia’s productivity and to establish an economy that can sustain its competitiveness in the future.