Productivity Commission claims wide-spread regtech adoption will lift compliance

An information paper by the Productivity Commission has highlighted how there is scope for Australia to adopt regulatory technology (regtech) beyond the financial sector, with the belief it can improve regulatory outcomes and reduce the costs of administration and compliance.

In its regulatory technology information paper [PDF], the Productivity Commission noted how Australia is “well-placed” to develop regtech solutions given its “relatively stable and sophisticated” regulatory systems, but currently, extensive use of regtech remains relatively low.

“Low awareness can dampen both demand and supply responses — business need to see value in changing their software so that developers see value in investing in applications, which in turn deliver the value businesses need to see,” the paper stated.

It went on to suggest that Australia could extend its existing use of “low-tech” solutions, including digitised data, forms, registers, and transactions to streamline business and individual transactions with government, as well as reduce compliance costs, improve the efficiency of regulatory practices, and generate flow-on benefits to the community.

Some of the specific areas that the Productivity Commission believes regtech solutions could benefit from include where regulatory environments are particularly complex to navigate and monitor, explaining that there is scope to improve risk-based regulatory approaches; technology could enable better monitoring; and technology could safely unlock more uses of data for regulatory compliance.

While regtech could improve regulatory outcome, it should not be used as a substitute for regulatory reform, the Productivity Commission warned.

The paper also examined the costs, risks, and hurdles associated with the wider adoption of regtech. It pointed out that while regtech has the potential to deliver benefits, the wide-spread implementation of it could take some years, particularly when it comes to the adoption of “advanced” regtech, which requires specialised resources and longer development times.

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‘Patients the losers’ despite $17m lift for ‘white elephant’ medical costs website

Australian Medical Association president Omar Khorshid said he did not expect many doctors would publish their fees on the website, which was “a complete failure” and “should be abandoned”.

“Until the website can actually give an individual patient confidence about what gap they might be facing compared with other practitioners, then it’s not going to be useful at all,” Dr Khorshid said.

Macquarie University Centre for the Health Economy director Henry Cutler said the fact participation was voluntary meant it would be “impossible for patients to determine value for money” by searching the website.

The latest official data from the Australian Institute of Health and Welfare shows Australians spent $30 billion on out-of-pocket medical costs in 2017-18.

Grattan Institute health economist Stephen Duckett said the budget provided “no real enhancement to ensure usable comparative information on all doctors will be available to the public”.

Health Minister Greg Hunt announced plans to build a medical fee transparency website detailing individual specialist fees in March 2019, to address “egregious” sums charged by some doctors, which was highlighted by patients resorting to crowdfunding websites to raise tens of thousands of dollars to pay for surgical procedures.

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Official data shows the website, which went live in December, was accessed by fewer than 10,000 Australians in the first six months.

Australian Society of Anaesthetists president Suzi Nou said Medicare and health insurer rebates had failed to keep up with rising costs, and the government should address this “rather than spending millions of dollars for a website to document just how out of touch they are”.

Dr Khorshid said private health insurance needed to be “simplified” to make it possible to easily work out what gap patients would face if they saw a particular doctor, because the fact both insurers and surgeons had multiple fees

ADP Jobs Numbers Lift Stocks

Markets were risk-on on Wednesday after a jobs report confirmed the U.S. economic recovery is still on a fast-track.

The S&P 500 rose 0.5%, with the tech-heavy Nasdaq down up just 0.3%, signifying it was non-tech stocks and a broad rally doing the legwork for the major indices. The 10-Year Treasury yield rose  to 0.67% fro 0.65%. Inflation expectations have been marginally improving.

Aiding sentiment in cyclicals was the ADP jobs report that showed 749,000 jobs added in September against economists estimates of 600,000. Even with questions lingering over whether the House’s proposed $2.2 trillion stimulus bill will be passed, consumer confidence was strong in September and businesses were adding employees, keeping the V-shaped economic and earnings recovery alive. Banks and oil stocks were up 1.4% and 0.5%, respectively.

“The pace of economic recovery is certainly key to future growth, and with private sector employment coming in better than expected this morning—the largest gain in 3 months—this could point to signs of strength in the labor market,” wrote Mike Loewengart, managing director of investment strategy at E*Trade in emailed remarks to reporters.

Semiconductors were down, with the iShares PHLX Semiconductor ETF  (SOXX) – Get Report down 0.28%. Micron  (MU) – Get Report, down 5% to $48 a share, beat revenue and earnings estimates handily Tuesday after the closing bell, but its $5.2 billion revenue guide and 47 cent earnings per share guide for the current quarter missed expectations. Huawei, about 10% of revenue, is not currently a customer. 

Still, the weak enterprise spend the near-term management noted is holding back semiconductor stocks. Wednesday was also a risk-off day for growth stocks, which many semiconductor stocks are. 

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