ASIC has published its regulatory costs for FY 2017–18, with levies payable by industry to recover these costs totalling $236.6 million, as part of the government’s industry funding arrangements that became law in 2017.
ASIC will begin issuing invoices in early 2019, and will also issue invoices to those that did not meet their legal obligations to register and submit details via the ASIC regulatory portal.
Registered liquidators saw the final actual cost for the subsector drop by $3.3 million to $6.87 million, bringing levy costs to a minimum levy of $2,500 plus $77 per appointment and notifiable event.
Registered company auditors will see a flat fee of $209, down from $222, with auditors of disclosing entities required to pay $120 per $10,000 of revenue.
“We are very surprised to see that the IFM for liquidators is so far down from the forecast $125 metric to only $77 per metric,” Australian Restructuring Insolvency & Turnaround Association chief executive John Winter told Accountants Daily.
“It’s a very, very tough market out there for liquidators right now and many will be breathing a massive sigh of relief that the cost burden on their firms is so much less than expected. Indeed, we’d say this will save jobs within the profession and probably prevent a few insolvency firms themselves becoming insolvent.
“We know that around 10 per cent of liquidators quit the profession in the last year, many in no small part due to the expected costs of this IFM.”
According to ASIC, the decrease in actual costs was primarily attributable to the change from the historical Companies Auditors and Liquidators Disciplinary Board (CALDB) and Court Actions to the new Disciplinary Committee forum introduced under the Insolvency Reform legislation; and a change in regulatory focus driven by a record high number of Assetless Administration Fund applications submitted throughout FY 2017–18 which resulted in a higher proportion of effort being allocated to corporate subsectors.
While welcoming the final costs, Mr Winter believes there need to be a better system to ensure the sector is given certainty over costs earlier into the year.
“It is crazy that liquidators can’t be given certainty about the metric level and instead need to play this game of Russian roulette waiting for the IFM final number to come out nearly 18 months after the first costs were incurred,” said Mr Winter.
“This post-recovery model gives zero certainty and we need a better system.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.