NSW government is fine-tuning the framework to grow its sharing economy. This sector contributed more than $500 million to state coffers last year.
The NSW Government is refining the framework to regulate its sharing or collaborative economy, while building the capability to tackle “digital disruption” impacting traditional models.
This sharing roadmap was unveiled by the Minister for Innovation and Better Regulation, Victor Dominello. It reinforces support for the fast-growing collaborative or peer-to-peer sector. This model contributed more than $500 million to the state’s economy last year.
A sharing economy offers a significant boost for local start-ups or entrepreneurs, Minister Dominello said. This trend is supported by international trends where tech-savvy governments are embracing a collaborative economy. They are also taking a more sensible approach to regulating a dynamic and fast-paced sector.
“Digital innovation is transforming the way people do business in every city and every country around the world,” Minister Dominello said. “The reality is the collaborative economy is here to stay.”
In consultation with the industry, the NSW administration is canvassing principles that underpin its overall policy and offer safeguards for consumers and businesses.
The administration’s take on a sharing economy is led by five guiding principles. These include supporting a culture of innovation and designing more adaptable “fit for purpose” regulation.
The goal is to offer customer protection and safety, while promoting competition, and laying the groundwork for “agile government procurement.”
A Deloitte Access Economics report estimates that more than 50 per cent of NSW consumers have used a digitally-enabled shared product or service. These services encompass transport, accommodation, education, employment and finance. Last year, nearly 45,000 people earned income from the shared economy.
Globally, this sector is expected to grow from US$15 billion to $335 billion by 2025.
The shared model typically brings together a platform, suppliers and customers. Developments in technology and digital platforms now connect market participants in new and unexpected ways. This collaboration is supported by innovative business models, often from left field.
Collaborative economy business models offer greater access, choice, convenience and flexibility for consumers. Competitive prices in an open market help build the base of consumers.
An earlier Deloitte survey shows that more than 60 per cent of respondents are aware of collaborative economy services. Over 50 per cent have participated in some form of shared services.
More recent growth is influenced by markets that embrace what is on offer. The challenge for government is ensuring that participants more readily enjoy the benefits of sharing models, while opening competition to emerging players.
Over-regulation a risk
On the upside, effective regulation leads to a better-performing economy, encourages competition and offers better access to services. However, over-regulation risks stifling innovation and entrepreneurship.
Locally, the sharing economy is impacted by consumer laws. These are jointly administered by the Australian Competition and Consumer Commission and state- based agencies including NSW Fair Trading.
The NSW administration says it is working with relevant authorities and industry to address issues involving consumer protection, including a closer look at industry and consumer protection laws.
Information about NSW’s collaborative economy outline future directions and strategies.