New research finds regulatory uncertainty is holding back investment in Australian technology

68% of tech leaders and investors recently surveyed say regulatory uncertainty is blocking investment as PEXA warns an ill-conceived pricing recommendation by a NSW Government regulator will further damage confidence.

New research commissioned by PEXA has found regulatory uncertainty is reducing confidence in Australia’s technology sector, with investors and business leaders warning that unpredictable regulation could make Australia a less attractive place to invest in digital businesses.

A survey of 275 Australian and international investors and senior leaders in technology companies found that 68 per cent believe regulatory uncertainty is at least a moderate, major or complete barrier to investment in technology and digital businesses.

The research by tech-sector insights consultancy 3arc, found that more than half of respondents (54 per cent) said they believed regulators do not fully understand and consider the ongoing investment requirements of maintaining and improving digital platforms.

Almost one in three respondents also ranked greater regulatory certainty among the top three actions state governments should undertake to encourage investment.

The findings reflect PEXA’s concerns following NSW regulatory body IPART’s use of a pricing methodology typically applied to physical infrastructure like ports, pipes and water as the basis to cut PEXA’s revenue by 20%.

PEXA commissioned the research in the wake of the IPART recommendation, to better understand how regulatory misjudgement and a lack of appreciation for digital platform economics could impact Australia’s reputation as a technology investment destination.

As Australia’s dominant digital conveyancing platform, PEXA is subject to pricing regulation, a framework in place since 2014.

PEXA Chief Executive Officer and Group Managing Director Russell Cohen said the research showed confidence in Australia’s regulatory environment for technology businesses was under significant strain.

“This research sends a clear message to Australian regulators – don’t keep moving the goal posts if you want to foster growth and innovation.

“If IPART’s draft recommendation is adopted, there is a real risk this decision could weaken confidence in PEXA’s world-first platform and create uncertainty across the broader technology ecosystem. It should be revisited urgently,” Mr Cohen said.

Mr Cohen said digital platforms have different investment and operating models from traditional utilities, and in that sense the IPART methodology was entirely inappropriate.

“PEXA is a digital platform that, not long ago, was a high-risk venture investment. Investors backed an Australian world-first when success was far from guaranteed.

“If we want Australia to create the next generation of globally significant technology companies, investors need confidence that innovation and long-term investment will be recognised and supported. Investors have a choice about where they invest their money,” Mr Cohen said.

ENDS

More information:

James Aanensen
Senior Corporate Affairs Manager
0410 518 590
james.aanensen@pexa.com.au

Ange Lewis
Public Relations Manager
0410 276 909
angeline.lewis@pexa.com.au

About PEXA Group

PEXA Group is a world-leading ASX-listed property insights solutions business, comprising PEXA Exchange, PEXA Tracker, PEXA Key, PEXA Projects, PEXA Planner and PEXA Clear. PEXA Group is a licenced operator of Australia’s largest Electronic Lodgement Network, PEXA Exchange. Since 2013, PEXA Exchange has facilitated more than 20 million property settlements in Australia. In 2022, PEXA launched in the UK. PEXA operates under a comprehensive regulatory framework. PEXA Clear will comply with all regulatory obligations and is unrelated to the PEXA Exchange.