The NSW Government has announced a framework for regulating the collaborative economy, also known as the peer-to-peer or sharing economy.

The Insurance Council of Australia (ICA) has welcomed NSW’s move towards a regulatory framework for the sharing economy.

The Government’s position paper, released by Innovation and Better Regulation Minister Victor Dominello, estimates the sharing economy contributed $504 million to the state’s economy last year.

“The reality is the collaborative economy is here to stay,” he said.

“We are living in the information age, and it is vital that government policies embrace new technologies and enable businesses to operate with certainty.”

The paper includes five guiding principles for the Government’s sharing economy policy: supporting a culture of innovation; ensuring fit-for-purpose regulation in the digital age; maintaining consumer protection and safety; promoting competition; and an agile approach to government procurement.

Noting an earlier decision by NSW to legalise ride-sharing services, ICA says the position paper gives insurers hope for greater clarity on the regulation of other businesses in the collaborative economy.

CEO Rob Whelan particularly welcomes the guiding principle that focuses on consumer protection, in which insurers have a vital role.

“Insurers agree that sharing-economy companies and those who operate them must have appropriate insurance policies to cover customer and third-party risk,” Mr Whelan said.

“ICA’s member companies are already responding to market demands by creating products to protect the thousands of new micro-business owners and operators and their many customers.”

Mr Whelan says ICA remains committed to the principal of competitive neutrality, whereby comparable businesses are subject to the same rules and regulations.

“The position paper states the importance of achieving the right balance of regulation so innovation is not stifled.

“ICA believes traditional business models are entitled to a level playing field, so they’re not subject to regulations and compliance costs that digital start-ups can skirt.”

The position paper is available here.