Australia’s two main political parties have unveiled duelling proposals to unlock equity funding for start-ups and small-to-medium businesses.

The Government has backed a recommendation in David Murray’s financial system inquiry to address regulations that impede the potential of crowdfunding in Australia.

In his 2014 report, Murray raised issues with Australia’s financial rules that he saw as stalling the development of crowdfunding and peer-to-peer funding models – or, more broadly, “financing via the internet”.

Citing the lead of other major worldwide jurisdictions, Murray said Australia was “lagging” and recommended regulatory changes “to facilitate securities-based crowdfunding … and internet-based financing”.

“A well-developed crowdfunding system can aid broader innovation and competition in the financial system,” Murray said.

In an official response to the inquiry’s report, the Government laid out plans to make crowdfunding more viable.

“The Government has held extensive consultations in order to be able to deliver capital to small businesses and also to start-ups and crowdsourcing equity funding is one of the ways that this can be delivered,” Assistant Treasurer and Minister for Small Business Kelly O’Dwyer said.

“We're announcing that we will have legislation to be before the Parliament, before the end of the year.

“We will continue to consult around crowdsourced debt funding in addition to bringing into legislation crowdsourced equity funding.”

In a statement, the Government said it would “soon begin consultations” on how best to facilitate crowdsourced debt funding via legislation.

However, at least one crowdsourcing platform executive believed the Government should just get a scheme going immediately “and deal with any unintended consequences as they arise” – rather than delay the scheme launch until after proposed legislation is passed.

The Coalition’s announcement was also criticised by Labor MPs as it had been previously put forward with a slightly quicker timeline.

Great: Govt just RE-announced it'll introduce equity crowdfunding laws by end of the yr. How many times do you reheat that meal? #startupaus

— Ed Husic (@edhusicMP) October 19, 2015

Labor, meanwhile, is focusing on convincing superannuation funds to invest in venture capitalists that fund technology start-ups.

Citing the text of a letter from Opposition Leader Bill Shorten, The Australian Financial Review reported that the idea is to be discussed at a meeting next month.

"Building the linkages between VCs and super funds will provide an added longer-term benefit for startups – sharpening up their commercial and business acumen through the process of seeking funding support," Shorten is quoted as writing.

The paper reported that the proposal had the backing of several industry groups and that some super funds were receptive to the idea, although it was noted that any investment would be subject to the usual risk-and-reward criteria.