Funding strengthens regulator's hand
The Turnbull government has announced $127.2 million in new funding for the Australian Securities and Investments Commission (ASIC) in a move that would be welcomed by anyone who harbours concerns about the behaviour of certain major banks in recent times.
The budget uplift is the government's response to the findings of the ASIC Capability Review, commissioned in July 2015.
Earlier this year, CHOICE reported that the scheduled ASIC cuts of $120 million over four years introduced under the Abbott government had led to 751 fewer surveillance activities as of February.
The budget squeeze also meant a 43% decrease in high-intensity surveillance activities, in which ASIC auditors pry open and scrutinise the operations of investment banks, superannuation funds and other ASIC licensees to make sure they're following the rules.
ASIC applauds turnaround
The financial regulator, which has copped its fair share of criticism for failing to prevent a run of corporate shenanigans, welcomed the change of heart in Canberra.
"This will enable further surveillance and enforcement in areas such as financial planning, responsible lending, life insurance, and misconduct and breach reporting. It will also allow us to build our technological capacity to identify and assess risks and market misconduct," said Chairman Greg Medcraft.
Other stakeholders were equally pleased. CEO of the Australian Institute of Superannuation Trustees Tom Garcia said, "It's been abundantly clear for some time that additional funding is needed for ASIC to be a strong and effective regulator and, importantly, meet community expectations in regards to protecting consumers and dealing with the problems of misconduct in the financial sector."
The government has also committed $5.2 million in additional funding to the Superannuation Complains Tribunal.
Who's going to pay?
Along with the funding injection, the government announced that ASIC's costs will be recovered from all industry sectors that it regulates from 2017-18.
"Industry funding ensures that the costs of regulation are borne by those entities that have created the need for it, rather than the Australian public," Treasurer Scott Morrison said in a statement.